Business Plans
The term business plan means the development of a written document that spells out, in considerable detail, where a business is and, more importantly where it is headed. A business plan precisely defines the business, identifies the goals, and serves as the company’s resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps in allocating resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals.
There are three purposes for a business plan. First, it serves as a guide for your business. It helps keep the business on the right track. Second, it is a requirement if you are seeking a loan. It provides lenders with information on all aspects of the company’s past, current operations and future projections. Third, the plan details how the desired investment or loan will further the company’s goals.
Before you begin writing your business plan, consider four basic questions.
- What service or product does your business provide and what needs does it fill?
- Who are the potential customers for your product or service and why will they purchase it from you?
- How will you reach your potential customers?
- Where will you get the financial resources to start your business?
The following are key components of a business plan:
1. Business Summary
Provides a brief overview of your business. Includes:
- Name and type of business
- Description of product/service
- Business history and development
- Location
- Market
- Competition
- Management
- Financial information
- Business strengths and weaknesses
- Business growth
2. Table of Contents
Illustrates the selection and arrangement of information.
3. Business History and Outlook
Examines the conception and development of your business within an industry specific context. Includes:
- Start-up information
- Owner/key personnel experience
- Location
- Development problems and solutions
- Investment/funding information
- Future plans and goals
- Market trends and statistics
- Major competitors
- Products/service advantages
- National, regional, and local economic impact
4. Products/services
Defines, and details the products/ services of your business. Includes:
- Unique features
- Niche served
- Market comparison
- Stage of product/service development
- Production
- Facilities, equipment, and labor
- Financial requirements
- Product/service life cycle
- Future growth
5. Market Examination
Assessment of product/service in relation to consumer buying. Includes:
- Target market and market share
- Consumer buying habits
- Consumer reactions
- Market factors and trends
- Cost
- Sales volume and goals
6. Competition
Analysis of competitors. Includes:
- Competitor information
- Product/service comparison
- Market niche
- Product/service strengths and weaknesses
- Future product/service development
7. Marketing
Identifies promotion/sales strategies for your product/service. Includes:
- Sales appeal
- Special and unique features
- Identification of customers/customer services
- Sales and marketing staff
- Sales cycles
- Type of advertising/promotion
- Pricing
8. Administration and Management
Statement of management philosophy with in-depth focus on process and procedures. Includes:
- Structure of organization
- Employee training and compensation
- Work environment
- Management policies and procedures
9. Key Personnel
Background of principle employees. Includes:
- Owner(s) employee education and experience
- Positions and roles
- Duties and responsibilities
- Benefits and salaries
10. Potential Problems and Solutions
Problem solving strategies. Includes:
- Risks
- Litigation
- Future competition
- Problem solving skills
11. Financial information
Worksheets and projections detailing financial plans, method of repayment, and future growth opportunities. Includes:
- Financial statements
- Bank loans
- Methods of repayment
- Tax returns
- Start-up costs
- Projected income (3 years)
- Projected cash flow (3 years)
- Projected balance statement (3 years)
12. Appendices
Supporting documents used to enhance your business proposal. Includes:
- Photographs of product, equipment, facilities, etc.
- Copyright/trademark documents
- Legal agreements and financial documents
- Marketing materials
- Research and/or studies
- Operation schedules
- Organizational charts
- Job descriptions
- Resumes
Finding Articles
To find articles about business plans and related topics, use the Business databases available from the Library homepage. The following databases will provide the most information.
- Business Source Elite
- Provides full text for over 1,100 business publications, some back to 1985.
- General Business File ASAP
- Indexes publications on business trends, finance, acquisitions and mergers, international trade, money management, investments, and banking.
You will retrieve the most articles in databases on the topic Business Plans by using the following terms:
- Business plans
- Business planning
- Entrepreneurship
- Entrepreneurs
- New business enterprises
- Startups
- Venture capital
Web Resources
- BizPlanIt BizPlanIt
- This site offers a unique and free online resource that mirrors the major sections of a business plan and provides insight into the fundamentals of writing an effective business plan for your company. Each section includes biz basics, mistakes to avoid, and section-specific tips.
- BizPlus BizPlus
- Free information about seeking trademarks; templates for creating business plans; web addresses for the Small Business Administration, IRS, and Better Business Bureau; and more .
- Bplans.com Palo Alto Software, Inc.
- This site provides sample business plans, marketing plans, online business plan books, and access to expert advice. You will find sample business plans from sectors such as manufacturing, health, international marketing, and computers.
- Business Owner's Toolkit Wolter's Kluwer Company
- CCH Tax and Accounting, a leading provider of business, legal, and tax information and software to the business community in the U.S. and abroad bring the CCH Business Owner's Toolkit to you since 1913.
- Center for Business Planning Business Resource Software
- This site offers links to general business planning resources and sample business plans.
- Inc.com Mansueto Ventures LLC
- Delivers advice, tools, and services, to help business owners and CEOs start, run, and grow their businesses more successfully. This site includes information and advice covering virtually every business and management task, including marketing, sales, finding capital, managing people, and much more.
- moreBusiness.com Khera Communications
- Includes business plans, templates, software, and more.
- SBDCNET National Information Clearinghouse SBDCNET
- Contains links of interest to the budding entrepreneur, the established small business owner, and the business researcher. Publications such as business plans, industry information, associations, Spanish language business documents and publications can be found at this site.
- Small Business Notes Small Business Notes
- Provides information and other resources for the small business owner.
- United States Small Business Administration (SBA) United States Small Business Administration
- The fundamental purposes of the Small Business Administration are to aid, counsel, assist, and protect the interests of small business.
- Wall Street Journal - Small Business Dow Jones and Company
- This site, developed by the Wall Street Journal, provides a database of businesses for sale, franchise opportunities, resources for developing business plans, and information on how to finance and run a business.
U.S. Small Business Administration Offices
Wisconsin District Office
740 Regent Street, Suite 100
Madison, WI 53715
(608) 441-5263 Fax (608) 441-5541
310 West Wisconsin Ave. Room 400
Milwaukee, WI 53203
(414) 297-3941 Fax (414) 297-1377
Minneapolis, MN District Office
100 North Sixth Street
Suite 210-C Butler Square
Minneapolis, Minnesota 55403
Ph:(612)370-2324
Fax:(612)370-2303
Illinois District Office
500 W. Madison Street, Suite 1250
Chicago, Illinois 60661-2511
(312) 353-4528 Fax (312) 886-5688
3330 Ginger Creek Road, Suite B
Springfield, IL 62711
(217) 793-5020 Fax (217) 793-5025