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Writing the Essential Business Plan

It's tempting to jump in with both feet when starting a business. There's so much to do, from choosing a company name to finding employees. Before adding too many items to your to-do list, though, take a deep breath, sit down at your computer and write out a business plan. A business plan serves two main purposes.
  1. It is a resource for leaders within your company to follow throughout the life of the business.
  2. It is a resource for others such as investors and creditors to learn about your company.
Each business plan is unique to the company that creates it. Length and content may vary based on the audience that will view the plan. If you are writing for investors, focus on the financials. If you are writing for creditors, include information that explains how they will be repaid. Because your company is a growing and changing business, your business plan will also change, but by including key information about your company you will always have a jumping off point for making key decisions. Some common elements of a business plan include the following:
  • The Executive Summary--The executive summary is a short overview of your business plan that entices readers to read the entire plan. It describes your business concept including a description of your product or service, the market you will serve, your unique business attributes and financial highlights.
  • Business Profile--In this section of the business plan, provide detailed information about your company’s history, ownership structure, company locations and your start-up costs. Start-up costs could include costs to develop your product, license fees, insurance costs, rental fees, and marketing costs. You can also include capital you have available when you launch the business.
  • Products or Services--Tell readers what you sell and why it would be a benefit for them to purchase your product or service. If you have developed a product or service to meet a market need, mention that here. Explain what features of your product or service make it different from the competition and why those differences are important to consumers.
  • Market Analysis--Define the market characteristics where you will be offering your product or service. List industry trends, past growth rates, current sales and industry size and growth forecasts for the future. Also include any regulatory restrictions on your industry and costs involved with abiding by those restrictions. Also include information about your target market. The target market is specific segments or niches of the market you will sell to. Don’t forget to include a list of your competitors.
  • Financials--It is important to have a good grasp on the financial health of your company even if you are in the early stages of your business launch. Investors, potential partners, creditors, even future employees want to know what capital you have available and what you will need to operate. In this section include balance sheets, income statements, and cash flow statements for a 12-month period. If you’re business is just getting off the ground, supply realistic forecasted financial information. An accountant can help prepare these documents if you don't feel comfortable doing so.
Keep your business plan concise by only including relevant information--no filler. Bullet points, headings and short paragraphs make for easier reading.




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