Over the years I’ve read many a business plan. Some really good ones and one that looked as if the person “borrowed” someone else’s and typed in their business name where applicable. We all know that if you’re a start-up business that its important to have a business. However, even if you’ve been in business for years its important now more than ever to blow the dust off that business plan.
Simply stated a business plan is a formal statement of business goals. Your reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. One piece of advice I’d give is to make sure your goals are flexible. Markets change, customer attitudes change, economic forces change, so your plan has to account for some amount of this.
Business plans typically focus on financial goals. A great business plan represents all aspects of business planning process. Things such as the business’ vision and strategy. It will also cover marketing, finance, operations, human resources as well as a legal plan if required.
From a banking standpoint, when it comes to financial projections, a few things to consider would be the following…..
1. Five Year Financial Projections – This would include Sales Forecasts, Balance Sheet Forecasts, and Profit and Loss Statements. For the first two years you may need to break down the numbers on a month to month basis.
2. Document You Data – When it comes to your forecasts make sure you document where you’ve received your data. Did it come from an industry group, a franchise provided financing statement, previous ownership, or any other source? It wouldn’t hurt to put the information you’ve gathered in your business plan as an indexed or attached item.
3. Resume – Place a copy of your resume in the business plan. From a banker’s perspective they want to see if you have the management capabilities to run said business. Do you have the experience in the field you are looking to get into?
There is ample assistance out in the marketplace for ones who are looking for help with a business plan; organizations like SCORE and the SBA provide great assistance. Additionally, some accounting firms have the ability to write and development a business plan with a prospective business owner.
A business plan can help to make a good business idea more credible, understandable, and attractive to a financier. Ultimately it will help the business owner find his way in business. A business plan can’t guarantee success, but it can go a long way toward reducing the odds of failure.