Business Plans
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A business plan is a crucial part of the success of a business it provides structure, identifies your goals, sets up a plan, and is used to encourage bankers and investors to provide financing for the growth of your business. A business plan furnishes you the chance to examine management strategies, marketing techniques, and your financial issues in an undistorted way. A business plan gives predictions of your company’s financial needs. A business plan is essentially the business guide and the tool that is used by lenders to determine if they will provide financing. According to the Small business Administration a business plan should include:
Executive Summary: an executive summery is your entire business plan summed up, it tells what your plan contains.
Company History/Organization/ Management Describes the company’s history and includes the legal formation of your organization, important changes, Associates percentage of ownership, and the primary roles they played in the firms creation. It includes a description of your management team and your company’s method of making decision. Also an organizational chart should be included and a description of important personnel and their responsibilities.
Product or Service Describes the product or service you make available, including their value in the market (with sales projections, if possible), how they rate with their competition (use, quality, and performance), competitive advantage, and demand for your service or product.
Market Analysis and Strategy A prediction of your customer base and their location to you, and your customer’s demographics. Clarifies the reason your product or service is marketable, and your company’s efforts at marketing and selling your product. (Include your policy on pricing) Projects what your share of the market will be using your results of an industry analysis.
Industry Analysis (Competition) Gives the names and locations of your major competitors, lists the product or services they offer. Points out the product or services they provide. Tells what they do well or not so well in comparison to you, and how lucrative or successful they are. Also gives specific details about the industry itself, includes major characteristics of the industry, outlook of the industry, principal markets, the size of the industry, and major characteristics of the industry. Describes the results of any important events that effected society, the economy, technology, or legal matters. Operating Plan Details how the company will execute output or distributing of their services in terms of location, suppliers, and skills required for their present and future work force, and a breakdown of cost for supplies, labor, and overhead.
Funds Statement a statement detailing the use of the loan funds, it should include supporting data. Such as, estimates, price sheets, insurance cost, and whatever documentation showing the cost of what you intend to buy with the funds.
Cash Flow Statement (Budget)
Documents that show cash inflow and outflow over a period of time. These documents show your business worth and if your business is a risk or not.
Three-Year Income Projection
prediction of the businesses financial status for the next two to three years.
Breakeven Analysis
A study of the time where a companys cost matches exactly with its sales or service volume, and the company breaks even where as it doesn’t make a profit but it doesn’t