Writing A Business Plan

Nonetheless, many new entrepreneurs avoid crunching their numbers, often due to fear that their estimates will be off-base and yield useless results. This is a poor reason to avoid forecasting your finances. If you do your best to make realistic predictions of expenses and revenues and accept that your approximations will not be absolutely correct, you can learn a great deal about what the financial side of your business is likely to look like in its early months and even years of operation. Even a somewhat inaccurate picture of your business’s likely finances will be much more helpful than having no picture at all.

Standard Business Plan Format

The form of every good business plan, although not set in stone, tends to run along the same basic lines, containing the following key sections:

Cover page—The cover page should be professional and informative and should contain an appropriate confidentiality legend.

Executive summary—The executive summary is the introduction to your business plan and the most vital section. Although it comes first, you generally write it last, because it summarizes the entire plan. Effective summaries generally cover:

• The company’s origin.
• The product or service and its uniqueness or competitive advantage.
• The company’s goals.
• The market potential for the product or service.
• A 3- to 5-year summary of key financial forecasts, especially sales and profit/loss. For new businesses, do some market research and make realistic assumptions about how your business can compete.
• The management team and its track record.
• The financing required to grow the business.
• The exit strategy.

The company description—This should convey a sense of history of the company, as well as its goals.

Management—The management section of the plan identifies key members of the management team, describes their responsibilities and establishes their relevant experience and accomplishments. It is here that you may want to include a resume that stresses accomplishments and relevant track records in an appendix.

The product—If the company is selling a product, this section describes what the product is or will be and shows why it can penetrate the existing or developing market. Investors generally are not interested in a one-product company. Therefore, you should discuss logical extensions of the company’s product line and future enhancements in the product section.