Start Up 101 – Constructing a Small Business Plan

By on May 30, 2013

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If you want to set up business up for success and raise capital, it is essential to have a business plan. A small business plan, no matter how extensive or brief, will help you clarify a business niche, set goals, get a clear view of your financial situation and design a plan for success. Remember, if you can’t make the numbers work on paper, how can you expect them to work in the real world?

The Small Business Plan

A small business plan will focus on the essentials – address organizational structures, offer product/service descriptions and niche market position, marketing and sales strategies, and financial analysis. Exactly how and when are going to accomplish what is written in your plan is critical to it’s reception and future success.
Your Small Business Plan will include:

Executive Summary
General Company Description
Products and Services
Marketing Plans
Operational Plans
Management and Organizations
Personal Financial Statement
Startup Expenses, Capitalization and Financial Plans
Appendices

Here are a few tips to help you design an effective business plan:

Set Goals

Every business has a purpose and every owner has a set of benchmarks to achieve which measures success. Before you write your plan, pick some realistic goals – a certain number of units sold, a target profit margin or a storefront.

Keep it Simple

This is the introduction to the Executive Summary – keep it simple yet captivating. What does your small business offer the market – a unique product or niche service? It should take no more than 2 sentences to sell what your business does and why it is necessary.

Describe Your Business

Now it’s time to get into the details of your business. In the next few paragraphs, clearly disclose how your business’ unique product or niche service will serve the market and the organization of management, duties and production. Consider the following:

  • Which markets, communities, audiences will your business target?
  • How will it reach those markets – manufacturing, online services, shipping, storefront, marketing, etc.?
  • Why is your business’ product or service superior to your competitors?
  • Who is the owner(s)?
  • Do you need employees or third-party contractors?
  • What are the responsibilities of owners, managers, employees?

Run the Numbers

Investors want to see that you understand your profit forecasts. Create a opening day balance sheet projection, break even-analysis, profit-and-loss forecast, cash flow projection and competitive pricing plan.

This will give you a firm grasp of the financial position of your business. Will you be able to pay employees, lenders, and still turn a profit? The better (and yet realistic) your profit forecasts, the more enticing your plan will be to investors.

Appendices

At the end of your business plan narrative and financial analysis, include an appendix with details used in the write up: advertising materials, copies of contracts and leases, lists of operational materials, market research and assets.

Review Your Plan Annually

Now that you’ve written up a plan, be sure to review it frequently. Are you still aiming at the same goals? What do the financials look like over time? Returning to your goals and analysis of number will help you to make adjustments for continued success.

Get Help From Professionals

Write up your own small business plan or get assistance from a business marketing, administrative or financial professional. Even if you write your own plan, you may want to consider reviewing your financial forecasts with a trusted adviser.

The real value of writing a small business plan is not the finished product but the process of researching and thinking about your business in a systematic way. Thoroughly planning, studying and analyzing your business ideas and finances helps you to think critically and realistically. It may be a tedious process, however, you may avoid costly, mistakes later.

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About Terri A. Kamoto

Senior writer for FSN - Terri is a former financial analyst dedicated to making personal finances, budgeting, investment and insurance advice accessible, up to date and easy to understand. It is hard to find professional advice written in a language someone without a financial background can understand. Terri helps companies synthesize industry lingo and expertise into clear and informative content which builds smarter, financially successful individuals. You can find Terri on !

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