writing a business plan

A business plan is a one that helps to allocate resources, achieve goals, look at all important aspects of business, focus on key areas, make decisions, focus on future problems and opportunities, set responsibilities and deadlines. The business plan should be simple, specific practical and complete. The business plan usually includes mission, keys to success, company description, management team, financial plan, product or service description, market analysis, strategy and implementation, forecasts, break even analysis and summary. Business plan is essential for starting a business, applying business loans, and running a business. The choice of the plan mostly depends on the business objective and type of business. Business plan serves as a guide to run a business. The average length of a business plan is 30 to 40 pages. However there is no specific length for a business plan.

DIFFERENT SECTIONS OF A BUSINESS PLAN:

1) COVER SHEET: The cover sheet forms the front page of the business plan. The cover sheet must include the name of the organization, address of the organization, Logo, Name and address of owners, Date in which the plan is issued.

2) MISSION: the mission statement is also referred as the statement of purpose. The mission statement must be very clear and concise. The mission statement should give a clear insight about the name of the business, nature of the business, legal structure, internal goals, customer satisfaction goals, purpose of loan request and requested loan amount, usage of funds etc. it is good to write the mission statement after completing the entire business plan as all the required information will be readily available to frame the statement

3) BUSINESS DESCRIPTION: This section should elaborately explain the business history, current status, future projection, current assets, turnover rate, marketability, key elements of the business, company description and the specialty of product or service.

4) PRODUCTS OR SERVICES: This section should explain everything from raw material used to finished products. This should explain about the different types of raw materials used, cost of raw materials, suppliers, service, and how and why the service is provided, uniqueness of the product or service. The copyrights, patents, trademarks and other rights can be included in this section.

5) MANAGEMENT DESCRIPTION: This should include information about experience, background, qualification and skill set of the proprietors of the organization.

Personnel: This section must explain about employee benefits, recruitment procedure, eligibility criteria, roles and responsibilities of employees.

6) MARKETING DETAILS: This section must explain the different marketing strategies used, the target customers, demographics of target market, future projections, marketing results, competitors, products or services offered by competitors, competitor?s current market share, strategies to overcome competition, distribution plan , pros and cons of various methods of distribution, response time, advertisement analysis, pricing structure, packaging and product design, location details such as occupancy history of the location, terms of lease, services provided by landlord and reasons for choosing the site.

7) FINANCIAL DOCUMENTS : This section covers all the major documents to be included in the business plan. The following are the documents to be included in this section

a) Financial needs

The types of capital that are used to meet the various financial needs are

Working capital: This is used to meet the fluctuating needs and has to be repaid during the next operating cycle.

Growth capital: This is to be repaid with profits over a period of time

Equity capital: This is used to meet the permanent needs

All of the above should be kept in mind to prepare summary of financial needs.

tify; mso-layout-grid-align: none">b) Loan funds application: this includes information regarding dispersal of loan funds. This section further includes supporting data that will back up the statement.

c) Budget statement: This shows the cash inflow and outflow over a period of time. The profit will depend on the balance between the cash inflow and outflow.

d) Projection statement: The projection statement includes the future projections of the business. The projection can be determined based on past financial statements, anticipated fluctuations in cost, market, efficiency of operation and several other factors.

e) Break-even analysis: break-even point is a one in which the business will incur neither profit nor loss. The expenses match the sales volume at this point.

f) Actual performance: The actual performance statement includes the following

Balance sheet

Profit and loss statement

Financial history

g) Supporting document: This section must include all the relevant documents that support the statements and decisions in the business plan

h) Legal document: This section includes legal documents such as patents, copyrights, trademark registrations, partnership agreement, property title, insurance policies etc

EFFECTIVE PRESENTATION OF THE BUSINESS PLAN:

1) Presentation: The business plan should be very presentable. The business plan should be neatly bound by spiral binding. Blue, black or brown covers can be used. Charts, tables, pictures can be used to enhance the presentation. Also important points can be high lighted and various colors can be used to improve the presentation.

2) Length: The business plan should be very concise. The business plan should not be more than 30 to 40 pages. A good business plan should clearly explain all the required information without ambiguity. All relevant information should be explained in a brief and clear statement.

3) Table of contents: A good business plan includes a detailed table of contents. The table of contents should also list the supporting documents. The business plan should be broken into various sections having clear titles. It is good to include an executive summary as well.

4) Review: The business plan should be updated on a regular basis based on market changes, industry changes, technological changes and changes within the organization. It is advisable to seek professional help if required. It is also good to get a second or third opinion before finalizing the draft of the plan.

A business plan is never complete without market information, growth and financial projections. The business plan should be very realistic. The plan should state only information that is realistic. The draft should be spell checked and proof read before it is finalized.