BUSINESS PLANS

WHAT IS A BUSINESS PLAN Set of documents prepared by a firm's management to summarize its operational and financial objectives for the near future (usually one to three years) and to show how they will be achieved. Read more: http://www.businessdictionary.com/definition/business-plan.html

PURPOSE OF A BUSINESS PLAN It serves as a blueprint to guide the firm's policies and strategies, and is continually modified as conditions change and new opportunities and/or threats emerge.

BENEFITS OF PREPARING A BUSINESS PLAN Aids in obtaining financing Motivates Sets a sense of direction Serves as a measure of performance Can be used to plan Thorough knowledge of industry and market

KEY ELEMENTS OF A BUSINESS PLAN

EXECUTIVE SUMMARY An executive summary of a business plan is an overview. Its purpose is to summarize the key points of a document for its readers, saving them time and preparing them for the upcoming content. Please note the following: It is the most important part of your business plan It must be clear, concise and compelling so that people will read further It should be written after you have completed the other sections of your business plan Try to keep this section to around one page

BUSINESS DESCRIPTION The name and location of the business The nature of the business and product Legal structure of the business Objectives and mission statement The product or service Regulations affecting the production/supply of good or service

MANAGEMENT Do you have the right people for your business? Indicate who is on your team, their qualifications and responsibilities (ie production, marketing, accounting etc). If you do not have people in these positions right know because of the size of your business, provide a time frame to put your team together. How will you overcome any labor shortages?

MARKETING Business Environment Analysis (Target market & customer needs) Industry Background (Size of industry, demand patterns, industry standards, potential for growth & environmental factors) Competitor Analyisis Market Analysis (Customer needs, where are they and how to reach them) Price Place Promotion

OPERATIONS What facilities and equipment do you have and what do you need? How will you run the business? How will you keep track of inventory? How will you keep costs down to remain competitive? What is your plan for growth? How does this business mesh with your existing business? It is important that you keep separate records for each different business you have. This way you will know what is making you money and what is not.

FINANCIALS You should include the following financial forms with projections for three to five years: Income statement Cash-flow projections Balance sheet Explain any assumptions including sources of funds If you are looking for financial assistance, lenders will want to know where you will get financing for your business and how you will spend the money. They will also want to see historical records for the past three to five years. You are to show your breakeven point Financial Ratios

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