A business plan It defines your business precisely, identifies your goals, and serves as a company résumé. The basic components include a current and proforma statement of accounts (model), an income statement, and a cash flow analysis.
The business plan helps you allocate resources appropriately, handle unforeseen complications, and make good business decisions. A good business plan is a crucial element of any loan application, because it provides organized and specific information about your company and how you will repay the money you are loaned. In addition, it informs sales personnel, suppliers and others about its operations and goals.
Plan your work
A comprehensive and well-developed business plan is of extraordinary importance. Much depends on it: external financing, supplier credit, managing your operations and finances, promoting and marketing your business, and achieving your goals and objectives.
Despite the critical importance of a business plan, many entrepreneurs find it difficult to prepare a written document. They argue that the market changes so quickly that a business plan is not useful to them, or that they do not have enough time. But, in the same way that a builder doesn’t start building without a blueprint, entrepreneurs shouldn’t rush into starting a business without a business plan.
Before you start writing your business plan, consider the following important questions:
- What product or service does your business provide and what needs does it meet?
- Who are the potential customers for your product or service and why would they buy it from you?
- How would you reach your potential customers?
- Where will you get the financial resources to start your business?
- What elements make up a business plan?
The content can be divided into four sections:
- Business Description
An executive summary, supporting documents, and financial projections should be added.
Although there is no specific formula for developing a business plan, they all have some common elements: They are summarized in the following outline.
Elements of a Business Plan
- Cover (Cover)
- Business purpose
- The business
- Business Description
- Operational procedures
- Business insurance
- Financial information
- Loan applications
- List of main equipment and supplies
- Statement of accounts
- Breakeven analysis
- Income projection models (profit and loss statement)
- Three year summary
- Monthly details of the first year
- Quarterly details of the second and third years
- Assumptions on which the projections are based
- Cash flow model
- Support documents
Homeowners’ tax return for the previous three years. Personal financial statements (all banks have these forms).
For franchises, a copy of the franchise agreement and all supporting documents provided by the company granting the franchise license:
- Copy of the lease proposal or property purchase agreement
- Copy of licenses and other legal documents
- Copy of the CVs (resumes) of the owners
- Copy of letters of intent from all providers, etc.
The Business Plan is a tool with three basic purposes:
Communication, Administration and Planning.
What communication tool, is used to attract capital, obtain loans, convince workers to agree to be hired, and help attract strategic partners for the business. Developing a comprehensive business plan demonstrates whether or not the business has the potential for profit. Its development requires a realistic look at all phases of the business, and allows you to show that you have solved all the problems and decided on all the potential alternatives before launching your business.
What administrative tool, the business plan helps you track, monitor and evaluate your progress. The business plan is a dynamic document that you can modify as you gain knowledge and experience. Use your business plan to establish times and stages, you can evaluate your progress and compare your projections to current achievements.
Like a planning tool, the business plan guides you through the different stages of your business. A well thought out business plan will help you identify obstacles so that you can avoid them and look for alternatives.
Many business owners share their business plan with their employees to promote a better understanding of where the business is going.
Examples of Business Plan: