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Part 1
The Introduction Component
Start with the cover page. Provide the business name, street address, telephone number, Web address (if any), name(s) of owners of the business, and the date the plan was issued.
Next, provide background information on the company and include the general nature of the business: retailing, manufacturing, or service; what your product or service is; what is unique about it; and why you believe that your business will be successful.
Then include a summary statement of the business’s financial needs, if any. You probably will need to revise your financial needs summary after you complete a detailed financial plan in
Part 6
.
Finally, include a statement of confidentiality to keep important information away from potential competitors.
The Benefits-to-the-Community Component
Describe the number of skilled and nonskilled jobs the business will create, and indicate how purchases of supplies and other materials can help local businesses.
Next, describe how providing needed goods or services will improve the community and its standard of living.
Finally, state how your business can develop new technical, management, or leadership skills; offer attractive wages; and provide other types of individual growth.
Part 2
The Company and Industry Component
What is the legal form of your business? Is your business a sole proprietorship, a partnership, or a corporation?
What licenses or permits will you need, if any?
Is your business a new independent business, a takeover, an expansion, or a franchise?
If you are dealing with an existing business, how did you company get to the point where it is today?
What does your business do, and how does it satisfy customers’ needs?
Part 3
The Management Team Component
How is your team balanced in technical, conceptual, interpersonal, and other special skills needed in your business?
What will be your style of leadership?
How will your company be structured? Include a statement of the philosophy of management and company culture.
What are the key management positions, compensation, and key policies?
Include a job description for each management position and specify who will fill that position. Note: prepare an organization chart and provide the resume of each key manager for the appendix.
What other professionals, such as a lawyer, an insurance agent, a banker, and a certified public accountant, will you need for assistance?
The Manufacturing and Operations Plan Component
If you are in a manufacturing business, describe your manufacturing and operations plan.
Part 4
The Human Resources Component
How many employees will you require, and what qualifications should they have – including skills, experience, and knowledge? How many jobs will be full-time? Part-time?
Will you have written job descriptions for each position?
Have you prepared a job-application form? Do you know what can legally be included?
What criteria will you use in selecting employees?
Have you made plans for the orientation process?
Who will do the training?
What can you afford to pay in wages and salaries? Is this in line with the going rate in your region and industry?
Who will evaluate your employees?
Will you delegate any authority to employees?
Have you developed a set of disciplinary rules?
Do you plan to interview employees when they resign?
Part 5
The Marketing Plan Component
What are your target markets, and what common identifiable need(s) can you satisfy?
What are the competitive, legal, political, economic, technological, and sociocultural factors affecting your marketing efforts?
What are the current needs of each target market? Describe the market in terms of demographic, geographic, psychographic, and product-usage characteristics. What changes in the target market are anticipated?
What advantages and disadvantages do you have in meeting the target market’s needs?
How will your production distribution, promotion, and price satisfy customer needs?
Part 6
The Information and Accounting Component
How will you gather information about competitors, their products, and the prices they charge for their products and services?
Explain how you will develop a management information system to collect, store, update, process data, and present information.
Will your business have an e-business component? If so, explain how you will sell your products and services online.
Who will create and maintain the accounting system that you will use to record routine business transactions for your business?
Will you hire an accountant to prepare financial statements for your firm?
The Financial Plan Component
What is the actual amount of money you need to open your business (start-up budget) and the amount needed to keep it open (operating budget)? Prepare a realistic budget.
How much money do you have, and how much money will you need to start your business and stay in business?
Prepare a projected income statement by month for the first year of operation and by quarter for the second and third years.
Prepare projected balance sheets for each of the first three years of operation.
Prepare a breakeven analysis. How many units of your product or service will have to be sold to cover your costs?
Reinforce your final projections by comparing them with industry averages for your chosen industry.
The Exit Strategy Component
How do you intend to get yourself (and your money) out of the business?
Will your children take over the business, or do you intend to sell later?
Do you intend to grow the business to the point of an IPO?
How will investors get their money back?
The Critical Risks and Assumptions Component
What will you do if your market does not develop as quickly as you predicted? What if your market develops too quickly?
What will you do if your competitors underprice or make your product obsolete?
What will you do if there is an unfavorable industry-wide trend?
What will happen if trained workers are not available as predicted?
What will you do if there is an erratic supply of products or raw materials?
Building a Business Plan:
Part 1
The Introduction Component
Start with the cover page. Provide the business name, street address, telephone number, Web address (if any), name(s) of owners of the business, and the date the plan was issued.
Next, provide background information on the company and include the general nature of the business: retailing, manufacturing, or service; what your product or service is; what is unique about it; and why you believe that your business will be successful.
Then include a summary statement of the business’s financial needs, if any. You probably will need to revise your financial needs summary after you complete a detailed financial plan in Part 6.
Finally, include a statement of confidentiality to keep important information away from potential competitors.
The Benefits-to-the-Community Component
Describe the number of skilled and nonskilled jobs the business will create, and indicate how purchases of supplies and other materials can help local businesses.
Next, describe how providing needed goods or services will improve the community and its standard of living.
Finally, state how your business can develop new technical, management, or leadership skills; offer attractive wages; and provide other types of individual growth.
Part 2
The Company and Industry Component
What is the legal form of your business? Is your business a sole proprietorship, a partnership, or a corporation?
What licenses or permits will you need, if any?
Is your business a new independent business, a takeover, an expansion, or a franchise?
If you are dealing with an existing business, how did you company get to the point where it is today?
What does your business do, and how does it satisfy customers’ needs?
Part 3
The Management Team Component
How is your team balanced in technical, conceptual, interpersonal, and other special skills needed in your business?
What will be your style of leadership?
How will your company be structured? Include a statement of the philosophy of management and company culture.
What are the key management positions, compensation, and key policies?
Include a job description for each management position and specify who will fill that position. Note: prepare an organization chart and provide the resume of each key manager for the appendix.
What other professionals, such as a lawyer, an insurance agent, a banker, and a certified public accountant, will you need for assistance?
The Manufacturing and Operations Plan Component
If you are in a manufacturing business, describe your manufacturing and operations plan.
Part 4
The Human Resources Component
How many employees will you require, and what qualifications should they have – including skills, experience, and knowledge? How many jobs will be full-time? Part-time?
Will you have written job descriptions for each position?
Have you prepared a job-application form? Do you know what can legally be included?
What criteria will you use in selecting employees?
Have you made plans for the orientation process?
Who will do the training?
What can you afford to pay in wages and salaries? Is this in line with the going rate in your region and industry?
Who will evaluate your employees?
Will you delegate any authority to employees?
Have you developed a set of disciplinary rules?
Do you plan to interview employees when they resign?
Part 5
The Marketing Plan Component
What are your target markets, and what common identifiable need(s) can you satisfy?
What are the competitive, legal, political, economic, technological, and sociocultural factors affecting your marketing efforts?
What are the current needs of each target market? Describe the market in terms of demographic, geographic, psychographic, and product-usage characteristics. What changes in the target market are anticipated?
What advantages and disadvantages do you have in meeting the target market’s needs?
How will your production distribution, promotion, and price satisfy customer needs?
Part 6
The Information and Accounting Component
How will you gather information about competitors, their products, and the prices they charge for their products and services?
Explain how you will develop a management information system to collect, store, update, process data, and present information.
Will your business have an e-business component? If so, explain how you will sell your products and services online.
Who will create and maintain the accounting system that you will use to record routine business transactions for your business?
Will you hire an accountant to prepare financial statements for your firm?
The Financial Plan Component
What is the actual amount of money you need to open your business (start-up budget) and the amount needed to keep it open (operating budget)? Prepare a realistic budget.
How much money do you have, and how much money will you need to start your business and stay in business?
Prepare a projected income statement by month for the first year of operation and by quarter for the second and third years.
Prepare projected balance sheets for each of the first three years of operation.
Prepare a breakeven analysis. How many units of your product or service will have to be sold to cover your costs?
Reinforce your final projections by comparing them with industry averages for your chosen industry.
The Exit Strategy Component
How do you intend to get yourself (and your money) out of the business?
Will your children take over the business, or do you intend to sell later?
Do you intend to grow the business to the point of an IPO?
How will investors get their money back?
The Critical Risks and Assumptions Component
What will you do if your market does not develop as quickly as you predicted? What if your market develops too quickly?
What will you do if your competitors underprice or make your product obsolete?
What will you do if there is an unfavorable industry-wide trend?
What will happen if trained workers are not available as predicted?
What will you do if there is an erratic supply of products or raw materials?
