APPENDIX B: HOW TO WRITE A BUSINESS PLAN (Pt 1)

The following pages provide a suggested outline of the material that should be included in your business plan. Your final plan may vary according to your needs or because of the individual requirements of your lender.

What Are the Benefits?

Every business can benefit from the preparation of a carefully written plan. There are two main purposes for writing that plan:

1. To serve as a guide during the lifetime of the business. It is the blueprint of your business and will provide you with the tools for analysis and change.
2. A business plan is a requirement if you are planning to seek a loan. It will provide potential lenders with detailed information on all aspects of your company's past and current operations and provide future projections.

Business Plan Outline

I. Cover sheet

Serves as the title page of your business plan. It should contain the following:

• Name of the company
• Company address
• Company phone number (include area code)
• Logo (if you have one)
• Names titles addresses phone numbers (include area code) of owners
• Month and year your plan was issued
• Name of preparer

II. Statement of purpose

(Same as executive summary.) This is the thesis statement and includes business plan objectives. Use the key words (who, what, where, when, why, how, and how much) to briefly tell about the following:

• What your company is (also who what where and when).
• What your objectives are.
• If you need a loan why you need it.
• How much you need.
• Why you will be successful.
• How and when you plan to repay your loan.

III. Table of contents

A page listing the major topics and references.

IV. The business

Covers the details of your business. Include information about your industry in general, and your business in particular. Address the following:

• Legal structure -- Tell what legal structure you have chosen and state reasons for your choice.
• Description of the business -- Detail your business. Tell about your history present status and future projections. Outline your product or service in terms of marketability. Project a sense of what you expect to accomplish in the next few years.
• Products or services -- Give a detailed description of your products from raw materials to finished items. Tell about your manufacturing process. If you provide a service tell what it is how it is provided and why it is unique. List future products or services you plan to provide.
• Location -- Describe site and why it was chosen. (If location is important to your marketing plan focus on this in the marketing section below.)
• Management -- Describe who is behind the business. For each owner tell about responsibilities and abilities. Support with resumes.
• Personnel -- Who will be doing the work why are they qualified what is their wage what are their responsibilities?
• Methods of record keeping -- What accounting system will you use? Who will do your record keeping? Do you have a plan to help you use your records in analyzing your business?
• Insurance -- What kinds of insurance will you need? What will these cost and who will you use for a carrier?
• Security -- Address security in terms of inventory control and theft of information.

V. Marketing

Covers the details of your marketing plan. Include information about the total market with emphasis on your target market. Identify your customers and tell about the means to make your product or service available to them.

• Target market -- Identify characteristics of your customers. Tell how you arrived at your results. Back up information with demographics questionnaires and surveys. Project size of your market.
• Competition -- Evaluate indirect and direct competition. Show how you can compete. Evaluate competition in terms of location market and business history.
• Methods of distribution -- Tell about the manner in which products and services will be made available to the customer. Back up decisions with statistical reports rate sheets etc.
• Advertising -- How will your advertising be tailored to your target market? Include rate sheets promotional material and time lines for your advertising campaign.
• Pricing -- Pricing will be determined as a result of market research and costing your product or service. Tell how you arrived at your pricing structure and back it up with materials from your research.
• Product design -- Answer key questions regarding product design and packaging. Include graphics and proprietary rights information.
• Timing of market entry -- Tell when you plan to enter the market and how you arrived at your decision.
• Location -- If your choice of location is related to target market cover it in this section of your business plan. (See location in the business section of this outline.)
• Industry trends -- Give current trends project how the market may change and what you plan to do to keep up.