When we begin working with you, whether you are just starting out or have been operational for years, we will consider your business plan. The business plan encourages thinking through pivotal elements of a business that will guide and support success. Whether we are working with you to build or complete a new plan or audit an existing plan in operation, we will provide entrepreneurial insight and strategy to every element of your business. Unfortunately, most business owners can not answer some of the most basic questions they should be able to answer. There is a long held saying with regard to writing. "Writing is re-writing." The same holds true with a business plan. A business plan should be looked at and evolved throughout the life of the company. Let it act as a living, breathing road map!
Below are the major parts of a business plan. Upon successful completion, you should be able to answer at least 80 questions/points of evaluation from a properly constructed plan. We will work through each, one at a time, guiding and encouraging you along the way. When you are finished, you will have a more detailed and competent plan than the majority of entrepreneurs and businesses out there which will increase your chances of success and investment, should you need an investment. With that, you will be confident that you have a solid foundation from which to work and succeed! And, if you used to say, "Business Plans are not necessary," we absolutely guarantee you will end up stating, "Business plans may not be necessary; but any prepared and thorough entrepreneur understands they are of immense value and purpose." The reason for this is that you absolutely will encounter all the elements from a business plan. So why not write a business plan so you have those elements better organized and in writing to view and keep track of and amend?
EXECUTIVE SUMMARY
This is the part where you tie everything together from the opportunity of the product or service you are offering to your management team and a snapshot of your financial plan and needs. Our suggestion is to write a very brief Executive Summary to begin with merely as a placeholder. After you have worked through your business plan with detail, you will find that you will be more capable to write a great Executive Summary with the proper precision and needed elements.
BUSINESS CONCEPT
This is the part where you define your product or service and discuss the perceived demand and to whom you will be targeting...your target market. Strategy with competition is also evaluated in this section as well some financial metrics.
MARKETING
This is the part of your business plan where all things marketing and advertising exist. This is where you do your research and then you do more research because you better know what you are offering and how it fits into the overall market of your sector of the economy. Too many entrepreneurs know their product/service, but do not know the details of their competition. And guess what?! Too many established companies and corporations lose sight of this which is one reason they often lose revenue.
OPERATIONS
This is the part of your business plan where you discuss who your founders are, your management team, and how the organization will be structured. Have you limited your liability? Are you going to be an LLC, an S-Corp or C-Corp? One of the most important steps an entrepreneur can make is establishing a professional entity that limits liability. Here, you will also discuss your needed resources as well as your future plan for the company.
Income statement
Sales Forecast and Cost of Goods Sold
Here, you will discuss your sales forecast and projected revenue. Your cost of goods sold will be evaluated here as well as your profit margin. Ever think about how much 50 cents saved on the cost of a good impacts your business when you are selling tens of thousands or millions? You will after working through this section! This section will also force you to evaluate whether your marketing spend will support your revenue generation goals. This part of the business plan will be compiled into an excel spreadsheet formula.
Income statement
Expenses
Ever consider the expense of monthly parking or having an IT service on call for emergencies, the amount of office supplies you use in a month? What about your payroll taxes or the cost of phones? You will know after you work through all your major and minor expenses in this section. This part of the business plan will be compiled into an excel spreadsheet formula.
Cash flow statement
Receipts and Disbursements
While these are merely projections for the startup that has not yet begun generating revenue, they are planning projections to allow you to see a big picture idea of how your business must perform to reach profitability.
Some will argue one can not project revenues so they just ignore the process. Our argument against that logic is: wouldn't you like to know how much you have to make to be profitable? How can one evaluate this if one does not project revenues, and then from revenues consider how much marketing one needs to achieve that revenue? And then from the marketing evaluation how much will marketing cost...? The list goes on, and a great business plan has all the sections interwoven, again as a LIVING BREATHING DOCUMENT that represents your business.
balance sheet
Assets, Liabilities, Equity
Ever consider how much cash your company will have on hand? What about your payment policy or your accounts receivable? Are you going to pay in capital? What does your common stock look like? All of this is covered in this section.
FINANCIAL FOOTNOTES
This section is very important for the entrepreneur as it explains your reasoning behind your financial needs and expectancies. For investors this is absolutely pivotal. If you are asking an investor for $100k and have $5k for office equipment, you need to explain what that is being spent on. Consider that investors like you to treat money like it is theirs, but respect it like it is yours! So if you feel the need to spend $1k on two office chairs, you may lose your investor on frugality points. At the same time, this is a section where you can shine and show the investor you respect his/her every dollar. Maybe you spent $5k for office furniture, but you explain in your footnotes you purchased an entire suite from a business that was moving. Now, you just showed the investor you are utilizing his/her money to build a company not fund a fancy office!