Business Plan Outline
Creating a good business plan is one of the most important tasks when starting a small business. A business plan that defines and identifies your goals not only will help you stay focused, but also will provide direction and focus for your employees. In addition, when seeking financing for your business, potential investors and lenders will want to see your business plan. For these reasons, it's important to write your business plan before you actually start your business. This article provides an outline of a typical business plan to help you get started.
The introduction to your business plan is where you define your business and your goals. In the introduction you should:
- Give a detailed description of the business and its goals.
- Discuss the ownership of the business and the legal structure.
- List the skills and experience you bring to the business.
- Discuss the advantages you and your business have over your competitors.
While marketing is an important aspect of any business, it's especially important for a new business. For this reason you business plan should include a marketing section in which you:
- Discuss the products/services offered.
- Identify the customer demand for your product/service.
- Identify your market, its size, and locations.
- Explain how your product/service will be advertised and marketed.
- Explain the pricing strategy.
Providing information about your business finances is not only important for your business in general, but also a key to gain (or keep) investors and/or lenders. In the financial management section of your business plan you should:
- Explain your source and the amount of initial equity capital.
- Develop a monthly operating budget for the first year.
- Develop an expected return on investment and monthly cash flow for the first year.
- Provide projected income statements and balance sheets for a two-year period.
- Discuss your break-even point.
- Explain your personal balance sheet and method of compensation.
- Discuss who will maintain your accounting records and how they will be kept.
- Provide "what if" statements that address alternative approaches to any problem that may develop.
As the owner of a small business, you most likely will not have the funds to delegate the operation of your business to others. Including a section on business operations in your business plan will keep you organized and can help you train any future employees. In your operations section, you should:
- Explain how the business will be managed on a day-to-day basis.
- Discuss hiring and personnel procedures.
- Discuss insurance, lease or rent agreements, and issues pertinent to your business.
- Account for the equipment necessary to produce your products or services.
- Account for production and delivery of products and services.
The concluding statement is meant to wrap things up for your business plan. In your conclusion, you should summarize your business goals and objectives, and express your commitment to the success of your business.
Once you have completed your business plan, it's helpful to review it with a friend, family member, business associate, Service Corps of Retired Executives (SCORE) mentor, or Small Business Development Center (SBDC) counselor. Also, please remember that a business plan is flexible document that should change as your business grows.
Get Legal Help
If you have questions about creating a good business plan, or would like help with other aspects of starting a business, you may want to contact a business organizations attorney near you.
For more information and resources related to this topic, you can visit FindLaw's Creating a Business Plan section.