How to Write a Business Plan

Report
How to Write a Business
Plan
Ron Nelson
Island County EDC
(360) 678-6889
[email protected]
Why Planning is
Important
• Suppose you lived in New Hampshire and wanted to
drive to Texas, would you use a map or GPS?
• K-12 education is a pre-defined plan
• Baking / cooking requires a plan - recipes
• Planning will help shape your destination and
provide the best road to get you there
• Plans communicate to investors, suppliers,
employees and others interested in your business
Snapshot of a Business
Plan
• Typical Business Plan Components
– Table of Contents
– Executive Summary
– Business Description
– Definition of the Market
– Description of Products and Services
– Organization and Management
– Marketing and Sales Strategy
– Financial Management
– Appendices
Table of Contents
Components of the Business Plan
• Lists key sections of the business plan
• Used to quickly locate specific sections
• Brings organization and structure to the plan
Executive Summary
Components of the Business Plan
• Purpose
– Interest someone to read rest of plan
• Most important section of the plan
• Write last
• Provides an enthusiastic snapshot of your company
• Less than one page
Business Description
Components of the Business Plan
• The Company Vision:
– Outlines what a company wants to be
– Futuristic: memorable and engaging expression
of hope and inspiration
– Staying status quo is moving backwards
Business Description
Components of the Business Plan
• The Mission Statement:
– Brief statement about who the company is and
what it stands for
– Example: Google’s mission statement is:
Organize the world’s information and make it
universally accessible and useful.
Definition of the Market
Components of the Business Plan
• Describe your business industry and outlook
• Define specific needs you will satisfy
• Identify targeted customers
• Develop customer profile
• Determine market size
– Demographics
Research
• North American Industry Classification System
– Find the NAICS
– http://naics.com/search.htm
• WA St Dept of Revenue
– Determine local statistics
– http://www.dor.wa.gov
• Google searches
Research – Sno-Isle
• Sno-Isle Libraries Business Resources
www.sno-isle.org > Research > Business and Business: Small
Business Start-Up
• Small Business Resource Center: Sample business plans,
how-to tutorials, business publications
• A-Z: Market research and trend analysis
• Business Plans eBookshelf: Business plan templates
• Learning Express (in eLearning): Microsoft Excel tutorials
• Legal Forms (in Legal Info): WA State legal form templates
• Free wi-fi and meeting rooms at your local library
• Information professionals available in person, on the
telephone, and online to help with your business research
Description of Products
Components of the Business Plan
• Identify and explain product pricing
• Describe your products and services how they are
competitive
• Reference applicable graphics and brochures
Organization and
Management
Components of the Business Plan
• Descriptions of how the company is organized
• Legal form of ownership
• Explanation of how things get done
• Required licenses and permits
– Washington State Department of Licensing (Universal Business
Identification Number)
– Internal Revenue Service (Employer Identification Number)
• Biographies of key managers / leaders
Marketing and Sales
Strategy
Components of the Business Plan
• Marketing is the process of creating customers
• Research is the foundation of marketing
– Who are my customers and potential customers?
– Where do they live?
– Am I offering the kinds of goods or services they
want at the best place, at the best time and in the
right amounts?
– Are my prices consistent with what buyers view
as the product’s value?
Marketing and Sales
Strategy
Components of the Business Plan
• Creating a marketing strategy
– Identify customer groups you can best serve
– Understand customers needs
– Always consider change
Financial Management
Components of the Business Plan
• Key Financial Statements
– Cash Flow Statement
– Balance Sheet
– Income Statement
Financial Management
Components of the Business
Plan
• Cash Flow Statement
– Monthly statement of
cash on hand, incoming
cash and expenses
– Used to determine
projected working
capital availability and
shortages
Financial Management
Components of the Business Plan
• For a New Business
– Estimate of start-up costs
– Projected cash flow statement (12 months
forward)
Financial Management
Components of the Business Plan
• For an Existing Business
– Balance sheets (last 3 years)
– Income statements (last 3 years)
– Cash flow statement (12 months)
Financial Management
Components of the Business Plan
• If Applying for a Loan
– Current personal financial statement on each
principal
– Federal tax return for prior year
Appendices
Components of the Business Plan
• Company brochures
• Resume of key employees
• List of business equipment
• Copies of press articles and advertisements (if
available)
• Pictures of your business location and products
• Information and/or data supporting the growth of
your industry and/or products
• Key business agreements such as lease, contracts,
etc.
Next Steps
• Put what you’ve learning into action
– Prepare a draft business plan
• Include 12 month cash flow projection
– Plenty of Excel templates available
– Discuss your draft plan and any questions you
have with a business mentor, coach, or other
seasoned business advisor
– Use the information you’ve received to prepare a
more finished product
Financing
• http://www.kauffman.org/about-thefoundation/kauffman-sketchbook.aspx
Free Services
• The EDC
– Demographics / business data
• SCORE (Service Corps Of Retired Executives)
– Confidential small business counseling
• Bring business plan and 12 month cash flow
projection
– http://www.scorechapter591.org/
• Small Business Administration
– http://imedia.sba.gov/vd/media1/training/YoungEntrepreneurs/player.html
How to Write a
Business Plan
Questions?

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