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Guide to Writing a Business Plan

1. Name of Firm. State the legal name of the business.

2. Owner or Owner-To-Be. State owner(s) name(s), as well as the form and percent of ownership.

3. Information on the Business

  • a. Type of Business and Product or Service.
    • State the general and specific nature of the business (i.e.,general -energy-, specific – oil, solar, wind: or general – food; specific restaurant, catering, farming, ice cream parlor, bakery).
    • State the type of business(manufacturing, service, construction, wholesale, retail,other).
    • State the company’s goals and electives.
    • Describe your products and/or services.
    • State who buys the product/service and who the final users are (briefly here, because youwill be discussing your customers very thoroughly under Market Analysis
    • Describe how the product/service is sold to customers (walk-in stores,sales representatives, mail order catalogs, telephone orders, etc.).
    • Describe how and where buyers get the product/service (walk-in stores, mail, delivery, etc.).
    • Comment on Quality of product/service.
    • Estimate average price of produce/service.
  • b. History.
    • If new, say so.  If existing, discuss age of business, prior owners, how acquired and length of time operated by you, image or reputation, number of employees, last year’s sales volume and profit and any significant events that have affected the company’s development
  • c. Offices/Plant
    • Give addresses and description of area and to writing a business plan
    • State whether rented, leased or owned.  If rented or leased, state from whom and under what conditions.
    • Describe access to building (major roads/freeways, walking, parking,etc.).  Is the location convenient for customers?
    • State business hours.  State size of facility (square footage).
  • d. Personnel
    • For the present and future: State the number of employees, type of labor needed (skilled, unskilled, etc.), source of labor (especially minorities, handicapped, veterans or other socially or economicallydisadvantaged groups), timing of hiring (or layoffs).
    • Comment on the quality of the staff and their job descriptions.
  • e. Economic/Accounting
    • Describe how the business will make money.
    • State how prices are or will be determined and by whom.
    • State what financial records will be kept and by whom.
  • f. Inventory
    • Describe what inventory, raw materials and/or supplies the business uses.
    • List your suppliers – name, address, type and percent of supplies furnished, length of time you have been buying from each, reliability andfrequency of purchase.
    • How easy or difficult is it to get necessary supplies?
    • If it is difficult, how will you deal with potential or actual shortages?
    • Are the prices of your supplies steady or fluctuating? If fluctuating, how do you feel deal with changing costs?
  • g. Legal
    • State form of business (sole proprietorship, partnership, corporation) and status (already formed or in process of formation).
    • State licensing requirements (type and licensing source) and status (notyet applied, applied and pending, obtained).
    • State zoning requirements and status (verified, OK, rezoning).  State insurance requirements (type, source) and status.
    • Have building codes been complied with?
    • State any health code requirements.
    • Describe any other laws and regulations that affect the business.
    • Describe lease, if any.  Trademarks, patents, licenses and copyrights should be checked for legality.
  • h. Future Plans
    • What are your plans for the future (maintain, expand, diversify, sell,etc.)?

4. Market Analysis

  • a. Customers (Market)
    • What is your market, or, who are your customers (wholesalers, retailers,consumers, government, etc.)?
    • Why does this market need your product/service?  Is your product/servicea fad or continuing need; being phased out or created by new technology?
    • List the characteristics of your average customers: age, location (market area), average income/sales, sex, lifestyle (family or single), working, and other important information.  The more you understand about your market, the better you can sell to it.
    • What do customers like and dislike about your product/service or business?
    • Estimate the size of the market (in terms of the number of customers).
    • Estimate how much the total market will spend on these or similar products/services in the next year
  • b. Environment
    • Describe any environment factors (economic, legal, social or technological) that affect your market or product/service.  Environment factors are those that have significant effects on your operation, but over which you have no control, i.e., county growth, rising energy prices, etc.
  • c. Competition
    • Discuss your competition: number of competitors (direct and indirect), type of company (i.e., product or service), location, age, reputation, size (sales or customers), market share.
    • Estimate how much of your product/service the competition will provide in the next year.
    • List competitors (names and addresses) and discuss their product/service features, price, location/distribution, reputation/image, market share, size, age, product/service, quality, and marketing strategy.
  • d. Competitive Advantages and Disadvantages
    • Discuss how your product/service meets market needs and how you compare with the competition in terms of product/service features, location/distribution, price, other.
    • Compare your estimates of the market’s demand and the competition’s supply.  The relationship of supply and demand will affect your marketing and sales strategy, i.e., high demand with low supply usually means less competition and less advertising.  Conversely, low demand and high supply indicates a very competitive situation and a need for extensive marketing.
  • e. Projections
    • Give your projections in terms of the number of customers or items sold or contracts obtained, etc.

5. Market Strategy

  • a. Sales Strategy
    • Present your marketing strategy.  Tell how you will get the edge on your competition and get customers.  This is your action plan to get business.
    • Your product/service will sell because one or more of the following is attractive: features, pricing (high, medium or low), distribution system (limited, widespread, etc.), and promotion.
  • b. Promotion Strategy
    • Describe how you plan to promote your product/service.  State how you will promote: advertising, direct mail, personal contacts, sponsoring events or other (word-of-mouth, trade associations).
    • If you plan to advertise, state what media you will use: radio, television, newspaper, magazines, telephone book yellow pages, and/or other (billboard, etc.).
    • State why you consider the media you have chosen to be the most effective.
    • State the content of your promotion or advertising: what your product/service is, why it is attractive, business location, business hours, business phone number, and other.  When you are designing your advertising, remember you are selling to satisfy someone’s need.
    • Refer back to your Market Analysis on need.

6. Management

  • Why have you chosen this type of business?  For key management personnel, include the following: resumes, personal financial statements, tax returns for the last three years, and personal family budget.
  • Describe prior experience that qualifies management to run this type of business.
  • State why you feel you can run this business.  State how much time management will devote to running this business.  Discuss local contacts who may assist you in your business.

7. Financial

  • a. Sources and Uses
    • Describe the project to be financed.
    • State where the money to pay for the project will come from (sources) and show in detail how it will be used (uses).  The most common uses are equipment, leasehold improvements, inventory and working capital.
  • b. Statements – Historical and Projected
    • If business is an existing one, include business tax returns and financial statements for the last 3 years.
    • Financial statements should include:
      • Balance Sheet
      • Income Statement
      • Accounts Receivable and Aging
      • Accounts payable and Aging
      • Debt Schedule
      • Reconciliation of Net Worth
    • For both existing and new business, project the following financial statements for the next three years (monthly for first year, annual for second and third):
      • Operating (or Income) Statement with explanation (sales, expenses, profit)
      • Balance Sheet
      • Reconciliation of Net Worth
      • Cash Flow with explanation
      • Break even Analysis


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