Different Parts in a Business Plan

Dear M & M:

What are the different parts in a business plan?

– Sue

Dear Sue:

Below are the elements of the business plan suggested by the Small Business Administration (SBA). A business plan should tell who, what, when, where, how and why. It should be clearly written to define specific goals and objectives to guide the organization. Most importantly it is a living document and should be updated regularly.  A business plan should include the following;

Title Page: name, address, logo, tag line, web site, phone number.

Executive Summary: 2 pages or lesssummary of the business plan;  brief history Industry and growth, what problem are you solving, who is your target market, who are your competitors, if requesting a loan have your collateral commitment and amount of loan request included.

Mission Statement and Vision: mission and vision statement with abrief history of the industry and some background on your company with specific goals or objectives of the business.

Define Market: identify geographic area, primary and secondary markets, profile targeted customer, research needs you are fulfilling, SWOT analysis, PEST analysis, demographics, number of potential customers, market share, and a competitive analysis.

Products and Services: proposition value, pictures, prices, pricing strategies, cost of goods, competitive analysis, and a list of potential suppliers.

Organizational Chart: legal entity, partnership agreements, professional assistance (Lawyer, CPA, Web Designer, Insurance, etc.), licenses, permits, insurance, flow of operations who is responsible for what, resumes of key employees.

Marketing: 4P’s (Pricing, Promotion, Products, Place), channels of distribution, market penetration strategy, identify collaborators, have a budget in place with tools to measure and monitor desired outcomes.

Timeline:  with key milestones and targeted dates for important objectives to mitigate known risks.

Financials: current financial statements of owners, list of debt owed, 3ys. Balance sheet, income statements and cash flow statements; forecasted 36 months cash flow statement, 36 monthly projected income statements, end of year balance sheets with historical records to include charts and graphs to show comparisons of ratio and trend analysis.

Appendices: lease agreements, building permits, equipment lists, supplier’s lists, patents, trademarks, architectural drawings, press releases. Use the appendix to hold anything important to your operations that does not fit in any of the above specific categories.  There is no specific length a business plan should be. Surveys that have been done on business plans show that the number of pages can range from 25 to 100 pages. A business plan must show that you understand the market, have a product or service people want to buy, with a team that can execute a specific strategy to make a profit. Do not confuse a business plan with a loan request (a shortened version of a business plan can be written to support how you will service new debt). Remember in the executive summary make sure you explain why your business idea will be successful.  Source:  SBA Business Plan Template.

-M&M

To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email schmittm@cochise.edu or contact the Sierra Vista Economic Development Foundation(EDF) at 520-458-6948 or email  hollism@svedf.org

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