What is a business plan and why do I need one? A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. Its basic components include a current and pro form a balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make the right decisions. As it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan package.

This section will give you a general guideline on business plan writing that will prove useful for anyone undertaking the task of business plan writing.

The benefits to preparing a business plan:

• Outlines your business idea
• Assists you in obtaining financing for your business
• Provides you with a measure for evaluating results
• Helps you uncover potential weaknesses
• Commits your plans to writing
• Helps you identify overlooked opportunities
• Helps you anticipate and adapt to change
• Tests the commitment of you and your partners

The contents of a business plan include:

• Cover sheet - simply list the name and address of the company, a telephone number and who wrote the business plan
• Executive summary
• The Business
  • Business Description - explain in general terms the following points
    • What type of business you will be involved in?
    • What form of business you will be organized under?
    • How you will operate the business?
    • Why you will be successful?
  • Product or Service Description - discuss in details your product or service area
    • What product or service are you selling?
    • What are the specific features and benefits of your product or service?
    • Is there anything unique or different about your product or service that will give you a competitive edge in the market?
    • Why will people buy your product?
  • Market Analysis
    • Industry Information - discuss the particular industry that your product or service falls in. Include information such as industry size and a brief history of the industry. Describe the specific characteristics and trends of the industry and what is expected to happen in the future. Discuss the major customer groups and how similar companies in other areas are operating their businesses.
    • Target Market(s) - D escribe what your markets are in general. Are you a wholesaler or retailer? What are the specific characteristics of your customer group(s)/ What is the market size? WShat is your anticipated share of the market? How will you determine pricing? Are there any secondary target markets?
    • Location - Describe where the business is located. What are the physical features of the building and what type of location are you in? Why was this location chosen over others as it relates to your target market and your product or service? If available, provide statistical information such as traffic patterns for the area.
    • Competition - Seek out and evaluate your major competitors and study how each operates their business. What are the strengths and weaknesses of each competitor and how will you deal with these in your business?
    • Marketing strategies - Determine what your share of the market can be and what strategies you will use to attain that share. Develop promotional and sales strategies that will help you reach the goals you set.
  • Management and Personnal - Describe the experience and skills of the principals and key managers of the business. Discuss how these will help in the successful operation of the business. Discuss the other personnel that will be utilized in the business. Briefly include job descriptions of all employees. Explain such things as whether they will be full-time or part-time, how they will be paid and other benefits that will be offered.
  • Capital Sources and Uses - Detail the total amount needed and how it will be used. Include a description of how much of the total you as the owner will be financing and how much you are seeking from a lender or investor.
• Financial Data
  • Project Cash Flow Statement (3 years)
  • Financial Statements
  • Tax Returns
• Appendix - Include items that offer support to above information, such as resumes, important articles, brochures, market surveys, legal information, leases and letters of support.