YES, I NEED A BUSINESS PLAN

Over the last 2-3 weeks, I have spoken to a few people that think they need a business plan. Some individuals are just starting a business, and others want to turn a hobby into a business. I thought it would be good to outline what is contained in a business plan.

Before I get started, I think it is important that even though it is important to have a plan, not all plans are created equal. I will briefly outline a business plan that you may take to a lender to secure funds for your business.

Part 1 – Executive summary 
This is your time to pitch your business. It should be brief and answer a problem. It may include a table of contents, company background, market opportunity, competitive advantages, and financial highlights. This should be two to four paragraphs tops. Don’t oversell but state the facts and how you have the answer to the problem. While you are gathering your thoughts on what to write, you may consider asking yourself some of these questions. What do you want the outcome to be with your product or service? Who do you want to serve? How will you serve them?

Part 2 – Business description and structure 
This is where you explain why you’re in business or want to start a business and what you’re selling. If you sell products, describe your manufacturing process, availability of materials, how you handle inventory and fulfillment, and other operational details. If you provide services, describe them and their value proposition to customers. Include other details such as who you know, intellectual property or proprietary ideas you may own, and your company’s legal structure. Side note: Please ensure you speak with someone that can speak with you about business structure (i.e., financial accountant, CPA, or advisor). Something to add, it is okay to grow with your business. Do not think you need to start with a C-corporation when you have not made a profit. This is why using someone like a CPA can walk you through the steps to becoming the company you envision.

Part 3 – Market research and strategies 
Identify who your customer is. Your market analysis and research should help you get very narrow. Describe how you are going to connect with your customers. What is your marketing strategy? It would be important to include sales forecasts, deadlines and milestones, advertising, public relations, and how you stack up against your competition. If you can’t produce a lot of data analysis, you can provide testimonials from existing customers. Side note: If you are having difficulty getting data to prove your idea or concept, you may think about hiring someone with experience. This is an important part of the process. If you are trying to appeal to a bank or an investor, it is super important to know if your product or service will provide a solution to the audience you are suggesting. 

Part 4 – Management and personnel 
Provide biographies of your key team players. Explain how their expertise will help you meet business goals. Investors evaluate risk, and much of their evaluation centers on your team’s experience and ability to execute. This is your time to shine. Do not hold back on this part. You need to gloat and tell all the great things you all have done. 

Part 5 – Financial documents 
This is where you provide the numbers that back up everything you described. Include conservative projections of your profit and loss statements, balance sheet, and cash flow statements for the next three years. Also, provide projections for 6, 12, and 18 months. As just mentioned, ensure they are conservative in nature. If you are going to a bank or an investor, your numbers must be correct. They have a lot of experience, and they will call you out if you are trying to lie in your numbers. Side note: If you have never made a financial statement before, please find a financial accountant or someone with experience. It will save you a ton of headaches.

I hope this helps. Give me a shout below if you need some help. I have written my fair share of business plans.