How To Do A Business Plan

For your reference, here is a set of guidelines for establishing a business plan:

THE BUSINESS PLAN

THE NARRATIVE SECTION

I. PURPOSE OF THE PLAN
1. Operating guide
2. Financing proposal

II. CONTENTS OF THE BUSINESS PLAN
1. Executive summary
2. Description of business
3. The market
4. The competition
5. Location of the business
6. Management qualifications
7. Personnel requirements
8. Financial summary
9. Appendix

III. EXECUTIVE SUMMARY
1. General information
A. Purpose of plan
B. What is to be done
C. Why it will be successful
2. Financial information
A. Why the money is required
B. How much is needed
C. How will this benefit the business
D. How will the money be paid back

IV. DESCRIPTION OF THE BUSINESS
1. Business form (legal)
2. Retailing, merchandising, manufacturing, service
3. Product or service to be furnished
4. New, takeover, expansion
A. Takeover background, e.g. founded, why being sold, why this price, sales trends, etc.
B. Expansion-Existing company background
5. Why you will be profitable
6. Business hours
7. What you learned from outside sources, e.g., trade suppliers, bankers, trade publications, etc.
8. Licenses required by business or personnel

V. THE MARKET
1. Define the market, customer characteristics
2. Size: present and future; your share
3. How you will satisfy and hold your share
4. Your price and the competition

VI. THE COMPETITION
1. Who are the five nearest you?
2. How are their businesses similar or dissimilar to yours?
3. Their strengths and weaknesses
4. How will yours be better?
5. What have you learned from them?

VII. LOCATION OF BUSINESS
1. Location needs
2. Building requirements
3. Why selected area and buildings are desirable
4. Physical features of building including renovations required
5. Lease or ownership terms
6. Neighborhood information, e.g., demographics, businesses
7. Zoning restrictions
8. How this location effects operating costs

THE FINANCIAL SECTION

I. USE OF CAPITAL
1. How is the loan or investment to be spent?
2. What will be purchased? Be specific.
3. Supplier and price
4. How will the loan or investment make the business more profitable?

II. OPERATING COSTS
1. Fixed Costs
2. Variable Costs
3. Pricing

A. Cover costs and make a profit
B. How are you going to price your product or service
C. Is the price competitive
D. If higher price, justify
E. Will you offer credit? Why? Can you afford this action, including bad debts that might result?

III. BREAK-EVEN ANALYSIS

IV. BOOKKEEPING AND RECORDS

I. CAPITAL EQUIPMENT LIST
1. All major equipment, e.g., care, heavy equipment, etc.
2. Office equipment

II. BALANCE SHEET

III. INCOME STATEMENTS
1. First year - monthly
2. Second and third years - quarterly
3. Three year summary

IV. CASH FLOW STATEMENTS
1. First year - monthly
2. Second and third year - quarterly
3. Three year summary

THE APPENDIX

I. SUPPORTING DOCUMENTS
1. Job descriptions
2. Resume and financial statement of owner
3. Credit reports
4. Letters of reference
5. Letters of intent from customers and suppliers
6. Copies of legal documents, e.g., leases, contracts, etc.

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