Write a Business Plan
Here's what to include in your business plan to attract investors and keep your business on track.
1. Problem statement.
Successful businesses share a common attribute: They do something useful for their customers. One way to determine what is useful for your customers is to identify and describe the problem that your business will solve. For example, a window washing service solves the customer's twin problems of wanting clean windows, but lacking the time or physical ability to clean windows him or herself.
2. Business description.
Your business description should explain exactly what you will provide for the customer, as well as what you'll exclude. Each of the choices you make in your business description will affect the amount of money you'll need to start or expand, and how much sales revenue you can expect.
3. Résumé of business accomplishments.
If you are looking for money from investors or lenders, they will want to be certain you have the experience, education, and desire necessary to make your business a success. This shouldn't take the form of a traditional resume, but rather it should be a statement of everything you have accomplished that has a direct bearing on your business objectives.
4. Marketing plan.
Your marketing plan should cover areas ranging all the way from determining how your business fits into the national and local economies to deciding what color your logo should be. Your marketing plan should describe your target customer, decide how to reach customers, analyze competing businesses, include a marketing budget, and discuss how you will differentiate your business from the competition. A good resource on how to market effectively is Marketing Without Advertising: Inspire Customers to Rave About Your Business to Create Lasting Success, by Michael Phillips and Salli Rasberry (Nolo).
5. Financial projections.
You need to make sure your business has the potential to be profitable, whether or not you are seeking investors. You will need to make several calculations, including a break-even analysis, a profit-and-loss forecast, a cash-flow projection, and a start-up cost estimate. An accurate projection of your company's financial prospects should also include an analysis of future trends and the possible risks facing your business. For a more detailed description of each calculation, see Nolo's Business Plan Basics.
6. Personnel plan.
Chances are that you'll need some help to run your business. Your personnel plan should state whether you will hire temporary help through an agency, independent contractors, or employees. Include descriptions of the positions that you will need to fill and a staffing schedule. If you've never employed anyone before, see Nolo's Hiring Your First Employee:13 Things You Must Do.
7. Specific business goals.
The purpose of listing your business goals is to determine what you want your business to accomplish for you. Do you want freedom from 9 to 5? More time with your children? It's your wish list, so be specific and enjoy writing it.
8. Statement of personal finances.
If you are seeking investors, a personal financial statement is a must. The statement should list your personal assets, liabilities, income, and expenses. Don't be discouraged if your financial condition is weak. Your backers understand that you need money, and they want to know about you, the good and the bad.
9. Plan summary.
The plan summary introduces and emphasizes the high points of your plan. Its job is to tell readers who you are, what you want to do, how much money you need, and how much money you expect to make, all on one page. For a comprehensive guide to creating a plan summary (and the rest of your business plan), get How to Write a Business Plan, by Mike McKeever (Nolo).