GUIDE FOR OPENING
The Business Plan will serve as both your "roadmap" and
your "laundry list" as you launch your new business. Your
schedule will be packed with activity once you secure funding. But
you have to spend many hours planning and developing procedures
for opening the business. The "roadmap" will remind you
where you are going and keep you "on track." The "laundry
list" will help you take care of the hundreds of details that
are part of preparing for the grand opening.
Your investors or lenders know that it usually takes several years
for a new business to make an acceptable net profit. Thus, they
require the would-be entrepreneur to plan for the operation of the
business during its first three years. Projections are required
for monthly operation during the first year and for quarterly operation
for the second and third years. Such detailed planning leads the
entrepreneur to consider the need for managing every phase of the
business. Although adjustments will be necessary as time goes on
the Business Plan serves as a management tool for the entrepreneur
while the business is young.
HOW IS THE PLAN ORGANIZED?
The information included in a Business Plan is lengthy and detailed.
If your plan is to receive the attention you hope for, it must be
well-organized and easy to read. The Business Plan Outline and Sample
Business Plan found in this unit will serve as guides for developing
you Plan. At the outset, you should realize that the Plan has four
I. Description of the Business
II. Marketing Plan
III. Organization Plan
IV. Financial Plan
These four major sections are supplemented by the following --
•Statement of Purpose
Each of these parts of the Plan is explained next.
Statement of Purpose
This brief statement on the first page identifies the business,
its owner (s), its address, the amount of financing, the purpose
of financing, and a statement about profit potential.
Section I. Description of the business. Section
I introduces the reader to the business by describing the type of
business, the product of service it will sell, and why it promises
to be successful.
1. Sources and application of financing
2. Capital equipment list
3. Beginning balance sheet
4. Break-even analysis
5. Three-year annual and monthly projected income statements
6. Monthly and quarterly cash flow projections
WHAT ARE THE MECHANICS FOR DEVELOPING A PLAN?
The business Plan will be more positively received if the mechanics
of it make it easy to read. Here are some suggestions to improve
Organizing and Analyzing the Data
You should use a loose-leaf notebook with dividers as you are collecting
the information and making decisions about your future business.
When you are ready to develop the Business Plan, you will need to
study the materials you have collected in each section. You may
find it helpful to number your notebook pages and classify each
section. You may find it helpful to number your notebook pages and
classify each section into subtopics.
List the subtopic headings on note cards, reference the page numbers,
and clip similar subtopics together. Then hold the cards for each
section together with rubber bands. You will be able to arrange
the collection of cards into the same topics as the Business Plan
Outline, which you will follow to write you Plan.
Organizing the Business Plan
You will want to refer to the Business Plan Outline and to the
Sample Business Plan as guides. The Outline is the blueprint for
your finished Plan. The Outline should lead the reader through a
logical discussion of the topics, from introduction to ending. The
Sample Plan will help you with organizing the Plan.
BUSINESS PLAN OUTLINE
Name of business
Name of owner(s)
Address and telephone number of business or where owner(s) can
Statement of purpose
Name of business and address
Amount of financing needed
Purpose of financing
Statement of profit potential
Section I: Description of business
A. Describe the business and the product or service you will
B. Discuss the history of the business. if any.
C. Discuss your work experiences.
D. Discuss the growth possibilities for the business and your
reasons for believing the business will be successful.
Section II: Marketing plan
A. Describe your potential customers and how you plan to attract
and hold them.
B. Describe your competition, how their businesses are currently
faring, and how your business will be superior to each competitor.
C. Describe your sales promotion plan, your selling methods, your
purchasing plan, your best suppliers and what they offer.
D. Describe your location, its features, what factors influenced
you to choose it, your floor layout, and how all location factors
influence marketing. Tell what equipment you need.
Section III: Organization plan
A. Describe your management personnel, what each manager will
do, their qualifications for the job, and their salaries for the
first three years.
B. Discuss any consultant or specialist services you will use
and the assistance each will provide.