How to Write a Business Plan Ron Nelson Island County EDC (360)

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: Googles mission statement is: Organize the worlds 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 – WA St Dept of Revenue –Determine local statistics – Google searches

Research – Sno-Isle Sno-Isle Libraries Business Resources > Research > Business and Business: Small Business Start-UpBusiness Resources 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 librarylocal library Information professionals available in person, on the telephone, and online to help with your business researchInformation professionals

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 products 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 youve 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 youve received to prepare a more finished product

Financing foundation/kauffman-sketchbook.aspxhttp:// foundation/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 – Small Business Administration –

How to Write a Business Plan Questions?