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Creating and starting a good business plan

Updated on March 5, 2011

Business Plan

A business plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture. It is sometimes called the road map of a business that answers the following questions:

  • Where am I now?
  • Where am I going?
  • How will I get there?

Skilled required in writing a business plan?

  • Accounting/taxes.
  • Planning.
  • Forecasting.
  • Marketing research.
  • Sales.
  • People management.
  • Product design.
  • Legal issues.
  • Organizing.

Importance of a business plan

  • It helps determine the viability of the venture in a designated market.
  • It provides guidance to the entrepreneur in organizing his or her planning activities.
  • It serves as an important tool in helping to obtain financing.

Writing the business plan

1. Introductory Stage

  • Name and Address of business
  • Name and Address of principal
  • Nature of business
  • Statement of financing needed
  • Statement of confidentiality of report

2. Executive Summary

3. Industry Analysis

  • Future out look and trends
  • Analysis of competitors
  • Market segmentation
  • Industry and market forecasts
  • SWOT Analysis

Internal Factors:

S = Strengths

W = Weaknesses

External Factors:

O = Opportunity

T = Threats

4. Description of venture

  • Products/Services
  • Size of business
  • Office equipment and personnel
  • Background of entrepreneurs

5. Production plan

  • Manufacturing process
  • Physical plant
  • Machinery and equipment
  • Names of suppliers of raw materials

6. Operational Plan

  • Description of company‚Äôs operation
  • Flow of orders for goods/services
  • Technology utilization

7. Marketing plan

The marketing plan establishes how the entrepreneur will effectively compete and operate in the market place.

  • Pricing
  • Distribution
  • Promotion
  • Product forecasts
  • controls

8. Organizational plan

  • Form of ownership
  • Identification of partners
  • Management team background
  • Roles and responsibilities of members of organization

9. Assessment of Risk

  • Evaluate weakness of business
  • New technologies
  • Contingency plan

10. Financial plan

  • Pro forma income statement
  • Cash flow projections
  • Pro Forma balance sheet
  • Break-even analysis
  • Sources and application of funds

11. Appendix

  • Market research data
  • Leases or contracts
  • Price list from suppliers

Why some business plans fall?

  • Goals set by the entrepreneur are unreasonable
  • Goals are not measurable
  • Lack of total commitment to the business
  • Lack of experience in the planned business
  • Having no sense of potential threats or weakness to the business
  • Customer need was ignored

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    • 2besure profile image

      Pamela Lipscomb 6 years ago from Charlotte, North Carolina

      Creating a good business plan is the first step to getting a business loan. Great hub. Voted up

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