Creating Your Business Plan

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Welcome to How to Write a Business Plan

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A business plan is also a road map that provides directions so a

business can plan its future and helps it avoid bumps in the road.

The time you spend making your business plan thorough and accurate, and keeping it up-to-date, is an investment that pays big

dividends in the long term.

What is a Business Plan?


Reasons People

• Inadequate Starting Capital•Lack of Sufficient Knowledge of Marketplace•Underestimated Competition•Poor Management•Inadequate Management - 98% of Failures•Poor Quality Product or Service•Unrealistic Pricing


Why Do You Need a Business Plan


Getting Started


•Write to Sell Yourself on

the Business

•May Save You Grief and

Expense

•May Show You Another

Alternative

•First Plan Is the Toughest

Plan Benefits


1Assessing the Idea

•What Would a Lender or Investor Want to

Know About - Owner, Business,

Community?

•When Circles Converge There Is Synergy

for a Good Business Idea

•Planning Process Starts

with Goals Both Business

& Personal

Phase


2Initial Research

•Libraries•Chambers of Commerce•Government Agencies•Other Businesses• Trade Associations & SBC• Internet•Demographics of Marketplace•Occupancy Statistics for Area, Industry•Industry Trends•Start Up Expenses, Projections & Location• License, Tax Certificate, Zoning,

Insurance• Competition

Phase


3Decisions

•Legal Structure•Management Team•Collateral and Equity•Source of Funds•Operation•Schedule•Theme•Services Being Offered

Phase


4Writing the Plan

•Statement of Purpose / Executive Summary•Description of the Business / History•Market Information and Strategy•Competition•Management and Personnel

Phase


Other Pointers•Anticipate Questions

•Limit Access to Your Plan

•Get Feedback from Others

•Share Plan with Employees and Others

•Make Sure That It Is Dynamic / Updated Often

•A Business Plan is a road map for the business,

a road map for success. It says where you are,

where you want to go, and how you’re going to

get there.


Executive Summary •Company profile•Nature of product/service offered•Size and growth trend of market•Make-up and background of management team•Financing requirements•Key projections (sales, gross profit, net • income)•Proposed use of funds•Proposed exit strategy and ROI


Business Description•Mission Statement•History behind idea or current business•Company’s current or proposed legal form•Proposed entry strategy and time line of events•Description of initial product/ service•Competitive advantages•Product research and development


Market Analysis Objective to convince reader of explosive market opportunity:•Description of industry•Targeted markets•Marketing research•Competition•Barrier (or ease) of entry


Management Team The strength of management is key to decision to fund or invest. Entrepreneur and team can make the venture successful:

•Background and primary responsibilities of team members•Organizational structure•Board of directors/ advisors•Ownership


Operations Strategy for implementing the business plan. Use assumptions developed here in the financial sections:

•Marketing Strategy•Production Plan•Personnel•Customer Support•Future research and development plans•Plan to stay technically current


Critical Risks Potential problems that could have a significant affect on the new company:

•External risks•Internal risks•Insurance provisions•Contingency plans


Financial ProjectionsDoes the venture make sense from a financial prospective? Should Address:

•Procurement•Allocation•Return on investment•Cash management•Should include actual performance data if available.


Additionl FinancesFinancial Data• Projected income statement

• 1st year by month• 2nd and 3rd year by quarter

• Balance Sheet• At opening• Projected for end of 1st, 2nd and 3rd years

• Cash Flow• 1st year by month• 2nd and 3rd year by quarter

• Break-even Points


Appendix •Provide supporting documents•Provides more detailed information•Details explaining tax advantages •Copies of patents, trademarks or copyrights•Reviews by independent firms, publications or outside agencies•Letters expressing interest to buy the product or service•Questionnaires used to collect data•Detailed results of marketing studies that support assumptions•Non-compete agreements signed by the management team and key contributors•Resumes of key management team & key technical advisors•Price list of competitors•Promotional brochures or advertisements


Strategic Plan •Honest, objective and critical appraisal of your business as it exists today•Where it is heading in the future•Competitive strengths and weaknesses•Risks and hurdles•Industry Trends•Assessment of the market•Profitability and cash flow requirements•Resource planning and HR issues


Resources •Public Libraries have excellent resources and more importantly people to help you find and gather the information that you need•Small Business Assistance organizations:• GTCC SBC 336.334.5211• SBTDC 336.334.7005• SCORE 336.333.5399• SBA www.SBA.gov• NOLO www.nolo.com


GTCC Small Business Center1451 S. Elm Eugene Street Greensboro, NC 27406

To Request Counseling (free counseling)www.ncsbc.net/center.aspx?center=75230

Mark Hagenbuch – 336.334.4822 x 62003

DarLinda Finch 336.334.4822 x 62001


Share your Show Up & Show Out! Moment of

the Night!Chisa D. Pennix-Brown, MBA

[email protected] Fin me online @LadyBizness