Business Plan Info-Guide

The Business Plan is a written summary of what you hope to accomplish by being in business and how you intend to organize your resources to meet your goals.  It is the road map for operating your business and measuring progress along the way.

1. Why Prepare A Plan?

A business plan will provide information of your proposed venture to lenders, investors, and suppliers to demonstrate how you plan to use their money, and to establish a basis for credibility of your project.

• It encourages realism.
• It helps you to identify your customers, your market area, your pricing strategy and the competitive conditions under which you must operate to succeed.
• This process often leads to the discovery of a competitive advantage or new opportunity as well as deficiencies in your plan.
• By committing your plans to paper, your overall ability to manage the business will improve.
• You will be able to concentrate your efforts on the deviations from plan before conditions become critical.
• You will also have time to look ahead and avoid problems before they arise.
• The Business Plan identifies the amount of financing or outside investment required and when it is needed.
• First impressions are important.
• A well-organized plan makes it much easier for the lender or investor to assess your financing proposal and to assess you as a business manager.
• Three or four hours spent each month updating your plan will save you time and money in the long run and may even save your business.
• Resolve now to make planning a part of your management style.

2. Recommended Format

Introduction

The format should start with a capsule (executive) summary of the highlights of the business plan. Even though your entire business is well described later on, a crisp, one or two page introduction helps to capture the immediate attention of the potential investor or lender.

The introductory summary should include the following:

• Company name
• Contact person
• Paragraph about company
• Securities offered to investors
• Business loans sought
• Highlights of Business Plan (sell your idea!)

Part 1 - Business Concept

Part one identifies your market potential within your industry and outlines your action plan for the coming year. Make sure your stated business goals are compatible with your personal goals, your own management ability and family considerations.

The heart of the Business Concept is your monthly sales forecast for the coming year. It is your statement of confidence in your marketing strategy and forms the basis for your cash flow forecast and projected income statement.

Part one contains an assessment of business risks and a contingency plan. We urge you to take the offensive and be your own devil's advocate.  Being honest about your business risks and how you plan to deal with them is evidence of sound management.

Part one should include the following sections:

• Description of the industry
• Description of the business venture
• Business goals
• Marketing plan
• Production plan (manufacturing)
• Production plan (retail or service)
• Corporate structure
• Risk assessment
• Action plan

Part 2 - Financial Plan

Part two outlines the level of present financing and identifies the financing sought.  This section should be kept concise with supporting material supplied only when requested.

The Financial Plan contains pro-forma financial forecasts. In carrying out your action plan for the coming year, these operating forecasts are your guide to business survival and profitability. Resolve now to refer to them often and, if circumstances dictate, re-work them as necessary.

Before presenting your Business Plan to a lender or investor, review your financial statements with your accountant. This familiarity will increase your credibility and at the same time provide you with a good understanding of what the financial statements reveal about the viability of your business.

Part two should contain the following:

• Financial statements (2-3 years if applicable)
• Financial Forecasts
• Financing and Capitalization
• Operating Loans
• Present Financing (if applicable)
• References (Bank, Lawyer, Accountant)

3. Finally

Preparing a Business Plan will generate a lot of thought and a lot of paper! Keep in mind, however, that the final document is a summary of your planning process. You can always refer to your working papers later on to substantiate a particular point.

Have your key employees and two or three impartial outsiders review the finished plan in detail. There may be something you overlooked or under emphasized. Also a critical review will be good preparation for your presentation to potential investors and lenders.

The following Web sites may help you develop your own business plan:

• Interactive Business Planner - http://www.cbsc.org/ibp
• Business Plan for Retailers 
• Business Plan for Small Service Firms 
• Business Plan for Small Construction Firms 
• Business Plan for Small Manufacturers 
• Business Plans - http://www.royalbank.com/business/tools/bigidea.html
• TD Business Planner - http://www.tdcanadatrust.com/smallbusiness/windocs.jsp
• ScotiaOne Business Plan Writer - http://www.scotiabank.com/cda/content/0,1608,CID400_LIDen,00.html
• BizPlanIt's Virtual Business Plan - http://www.bizplanit.com/vplan.html
• Venture Planning System Pro (VPSpro) - http://www.vpspro.com/vpspro_start.html
• BPlan.com - http://www.bplans.com

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

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