Business Plan Tips
Two versions of a business plan are not uncommon – one for internal purposes as a management tool and the other more detailed for outside funding purposes. You must be aware of the intended reader so that you can focus on the aspects of the plan that are most important to them.
- Be realistic with financial projections
- Use layman’s terms when describing product or service – the reader must understand what you are saying
- Always provide supporting documentation
- Your plan will probably change as your business grows – update each quarter if necessary
The Executive Summary is meant to be a persuasive synopsis. It is proof to the reader that you are taking your business idea seriously. Be sure to include:
· Company history
· Company objectives
· Product/service offerings
· The market
· What is your competitive advantage?
· Projected growth for the company
Financial Data
Have an accountant establish your accounting system before the start of business. Be sure to include:
· Balance Sheet - indicates what the cash position of the business is and what the owner's equity is at any given point
· Break-Even Analysis - Shows the volume of revenue from sales that are needed to balance the fixed and variable expenses. All businesses should perform this analysis, which is based on the income statement and cash flow.
· Income Statement ( profit and loss statement) - Indicates how well the company is managing its cash, equal to receipts minus disbursements.
