New Small Business Plan

A new small business plan is the written description and financial projections that give your business idea a blueprint for success.  It is in the preparation of the business plan that you explain every detail of the business, including what functions it will perform, how it will operate, which market it will serve and how you will promote it.  It is also during this preparation that you will attempt to project how the business will perform financially.  This will determine how successful your small business is at establishing business credit. The  small business plan is the means by which you convey your business ideas to others, including lenders, investors and/or potential partners; therefore, it is critical that you devote careful consideration and time to the process of writing this plan. 

  Below is a checklist to guide you in the development of your new small business plan. 

Business Overview:  The Industry, The Company and Its Products

The purpose of this section is to summarize your business in both broad and specific terms, to present the small business that you are in, the products/services that you will offer and the nature of your industry.  This offers you an opportunity to capture the reader’s interest in a short 1-2 page synopsis of your plans and ideas.

Market Research and Analysis

This section of the plan is one of the most challenging to prepare and also one of the most important.  The purpose is to present the reader with facts and statistics which demonstrate the market potential of your product and or services.  The market research that you conduct should clearly indicate the demand for you product and or services and be supported by statistical and demographic information as well as an in-depth analysis of the market and your competitors.

The Marketing Plan

Now that you have written an overview of your small business and have conducted an in-depth market analysis, it is time to devise a marketing plan to help your business promote and sell your product and or services.  Try to give the reader a sense of what groups of consumers you plan to market your product and or services to as well as a general view of how your product and or service fit into the marketplace.

The Operating Plan

This section of your small business plan describes the day-to-day operation of the business and also helps the reader to visualize how the business actually functions.  Also included in this section is the organizational structure of the company, and the overall strategy and plans for the business.  This information helps to give the reader an idea of the scope and direction of the company.

Management

Good management is essential.  Funding sources desire to see that you understand your market and have the skills to succeed. This section is where the reader will learn about the backgrounds of the person or persons who will operate this business. It is very important to demonstrate that you and or other key personnel have the ability to manage the business successfully.

Future Plans

The purpose of this section of the plan is to share your vision of your company’s future.  If you plan a major expansion, such as multiple locations or franchising, for example, please explain in detail your estimated time-line.

Financial Projections

After preparation of the written portion of the small business plan, it is time to prepare financial projections for your business. Although preparing these projections is a tedious task, any lender or private investor will expect to see three to five years of monthly projections prior to making a credit decision.  These projections are your best estimate of future operations and will also serve as part of the operating plan for the management of the business.

The Income Statement is a measure of how well a small business buys and sells its inventory and or services to make a profit.  The Statement of Cash Flow is a measure of how well a business manages cash, the lifeblood of the company.

Using the financial information contained in the written portion of the plan, such as number of employees, hours worked, wages per hour, project your sales, cost of sales and expenses for the first year.  From there you might just anticipate a percentage sales growth per year for years two and three. For help with questions about a new small business plan, please contact us.