The Consulting and Independent
Contracting Corner

Starting a Business 101 -- Writing Your Business Plan

by Elaine Garnet, CIC-SIG Manager

Dear Entrepreneurial Spirit:

You have a good business idea; you've identified your target market; you know what your competition is doing; and you have a reasonable expectation of success. There are some important items remaining before you can launch your business. You have to prepare a financial forecast and write a business plan. If you are planning to approach a financial institution for a business operating line of credit, they will want to see your business plan and the appended financial forecast. Because financial forecasting can be a difficult and time-consuming process, I have asked a professional to consider writing to you on this subject. For now, I will guide you through the basic steps of writing the business plan, and you can work on the forecast early next year. Normally, you would prepare the forecast first.

Why write a business plan?

A business plan is a written document that reflects all your careful business research! It describes your business, the marketplace opportunities, the services you will offer, your business structure, and potential revenue. You should write a business plan to demonstrate the feasibility of your business and to provide you with a framework for making future decisions. A business plan is a flexible document that can be revised as you encounter the occasional detour in your progress. Revise your plan as often as necessary. Use it to keep you on track.

Your business plan should look professional (both in content and format)

You are a writer so I don't need to tell you that the plan should be easy to read and follow. Correct? Also, be prepared to support any statements by citing your research. Finally, make sure to print and bind the plan on letter-sized paper. The library is full of books with suggestions on how your business plan should look. Choose your own format or follow my guidelines:

1. Title Page: Include the business name, address, phone number, fax, email address, your name, the years covered by the plan.
2. Table of Contents: Make sure all the pages are numbered. This is a no-brainer.
3. Executive Summary: Provide a brief description of the business, your services, why you are going into business, your potential customers, the financial highlights, and why you expect to succeed.
4. Objectives: Describe your business objectives in terms of both short and long-term goals. Make sure they are realistic, measurable and have a specified time frame.
5. Management and Business Organization: For most of us, the type of company will be a sole proprietorship.

Specify the skills you have that will help the business to succeed. Specify to whom you will turn for the skills you are lacking. For example, you might decide to use a bookkeeper or accountant, printer, etc. Also, be sure to specify if a business license or insurance is required, and when you plan to obtain these items.

6. Marketing and Operational Plan:
• Highlight your market research and make sure that it is accentuated with charts, graphs, etc.
• Describe your service or service mix completely. Assume that the reader is totally unfamiliar with your type of service.
• Describe how you achieved your pricing structure by outlining your costs.
• Describe any pricing strategies, such as discounts to lure new customers.
• Tell the reader where your business will be located and the advantages of this location.
• Describe how you will promote your business -- where, when and at what cost. A chart will be useful.
• Describe your competition. For each competitor, outline their strengths and weaknesses, as well as where there are opportunities for you and any threats (SWOT). Here again, a chart will be useful. Identify your suppliers. This can be as simple as the local computer or stationery stores. Try to identify more than one supplier for each product.
• Describe the technologies you will be using. In our case, this will be computer hardware, software, etc.
7. Financial Statements: These items should be included in your plan and we will discuss these early next year:
• Cash flow forecast
• Income statements
• Balance sheet
• Break even analysis
8. Appendices: Include items such as your résumé, sample contracts, sample business cards and supportive items from your portfolio.

This is by no means an exhaustive treatment of the business plan. Your local Business Enterprise Center often presents seminars on all of the above sections. I would encourage you to attend these seminars as well as those offered by your local public library.

Our next letter will be in February. Until then, may I wish you a very Merry Christmas on behalf of the CIC-SIG.

Sincerely,

Elaine Garnet (CIC-SIG Manager)

P.S. Intercom (November 2003) has an interesting article by Elizabeth G. Frick on "Independents' Success Depends on Business Skills." Check it out on page 35.