1. Business Plans

2. Why Is It Important?
A business plan is a written document that describes all the steps necessary for opening and operating a successful business
Describe what your business will produce, how you will produce it, and who will buy it
Explain who will run your business and who will supply it
State how your business will win over customers from competitors and how you will keep them
Provide detailed financial info that shows how your business will earn a profit successfully

3. What Will You Produce
To convince investors that your business idea is solid, you will need a completely new product or service or one that is better or less expensive than ones that already exist.
You will need to identify your target customer and show how you will obtain new customers and keep them.

4. Objectives or Goals
A business plan helps you set goals and how you plan on achieving them.
Goals
Short Term: the first year
Medium Term: years 2-5
Long Term: 5 years and beyond
Describes products and services to be introduced in the next five years
Possible expansions to the business

5. Experience
A business plan describes the background and experience of the people running the business
This aids in the bank/investors decision based on how well they think a company can meet objectives

6. 5 Basic Elements 1. Introduction 2. Marketing 3. Financial Management
4. Operations
5. Concluding Statement

7. Introduction A detailed description of the business and goals
The ownership of the business and legal structure
Partnership, Proprietorship, Corporation
The skills and experience you bring to business
The advantages you and your business have over competitors
Performance, Quality, Reliability, Distribution, Price, Promotion, Public Image

8. Marketing Describe your product Identify the market
Good or Service
Identify the market
To whom and where will you be selling your product.
What is the industry?
External factors such as competition and lack of suppliers
Growth potential of industry
Economic trends of industry
Technology trends t
Where will you be located?
Location, Location, Location
Can be critical to your success so therefore it is critical to investors and lenders.

9. Financial Management
This forces you to look at potential risks and costs and expenses of your business
Identification of Risks
Investors will want to know potential risks and how you will face them. Do not be afraid to list potential problems. Every business faces risks.
Ex: Competitors cutting prices, costs exceeding projections, demand declining
Financial Statements
All business plans must include projected financial statements
Pro forma financial statement: a financial statement based on projected revenues and expenses
Funding Request and Return on Investment (ROI)
How much you need to borrow and how you plan to use the $

10. Operations
In this section one should explain how the business will be managed on a day-to-day basis and discuss hiring and personnel procedures.
Describe the equipment that will be necessary for production
How products will be delivered should also be mentioned

11. Concluding Statement
Summarize the goals and objectives you have for your business
Emphasize your commitment to the success of the business

12. Completing the Business Plan
A business plan should include a cover letter: a letter that introduces and explains an accompanying document or set of documents
It should also include a Statement of Purpose: a brief explanation of why you are asking for a loan and what you plan to do w/ the money.
No more than two paragraphs
An executive summary: is a short restatement of the report. It should capture the interest and make them want to read more.

13. Executive Summary Your summary should include
A description of your business concept and communication about what is unique about your idea
Projections for sales, costs, and profits
Your needs (inventory, land, building, equipment)
Amount you are intending to borrow