While
business plans serve somewhat as a guide, more importantly
they serve as an understanding of what
running the
business will be like. In other words, business
plans tell you what is the most important thing to
watch and spend time on. -- Chris Gibbons, Littleton, CO
Business
plans have two basic functions:
1. They are essential
for obtaining a loan from a bank or an investment.
2. Business plans are
also your first dry run at starting up a business before you
put substantial money into it.
Elements of
a Business Plan
1. Cover
sheet
2. Statement of purpose 3. Table of contents
I.
The Business A.
Description of business
B.
Marketing
C.
Competition
D.
Operating procedures
E.
Personnel
F.
Business insurance
II.
Financial Data A.
Loan applications
B.
Capital equipment and supply list
C.
Balance sheet
D.
Breakeven analysis
E.
Pro-forma income projections (profit & loss
statements)
1. Three-year summary
2. Detail by month, first
year
3.
Detail by quarters, second and third years
4.
Assumptions upon which projections were based
5.
Pro-forma cash flow
III.
Supporting Documents A.
Tax returns of principals for last three years Personal
financial
statement (all
banks have these forms)
B.
For franchised businesses, a copy of franchise
contract and all
supporting
documents provided by the franchisor
C.
Copy of proposed lease or purchase agreement for
building space
D.
Copy of licenses and other legal documents
E.
Copy of resumes of all principals
F.
Copies of letters of intent from suppliers, etc.
