In this “post-pandemic”economy, many people are looking to start their own business. 2021 saw a 23% YOYincrease in new businesses registered. Any successful business must start witha business plan.
A business plan must contain aset of business goals:
o The reasons they are believed to be obtainable, and the plan for reaching those goals.
A professional business plan consists of 8 parts:
1. Executive summary – most important b/c it gives the current summary of the current stateof your business, where you want to take it and how you will achieve success.
2. Company description – gives a high-level review of the different aspects of yourbusiness, including (if applicable) how it will stand out and what new need it will address.
3. Market analysis – goes into detail about your industry and your company’s marketpotential, detailing strategies for market penetration, such as low prices orhigh quality.
4. Organization and management – sets forth your company’s organizational structure, type ofbusiness structure of incorporation, the ownership, the management team, and the qualifications of everyone holding these positions.
5. Service or product line – describes your service or good which you are selling.
6. Marketing and sales – describes your marketing/advertising plan, projected sales and howyou came to that number.
7. Funding request – includes cost of supplies, building space, transportation, overheadand promotion of your business. Be sure to keep and maintain accurate recordsexactly reflecting the quoted figures so you do not commit Bank Fraud.
8. Financial projections – include historical financial data (bank statements, balancesheets and possible collateral for your loan). The prospective financial partof your business plan should show your potential growth in your industry,projecting out for at least the next 5 years. Include a ratio and trendsanalysis in all your financial statements. For your first year of operation, domonthly, quarterly and annual statements.
Appendix – Do not attach to your Business Plan. Keep and provide only if necessary/required.Would include your credit history (personal and business), resumes of keymanagers, product pictures, letters of reference, details of market studies,relevant magazine articles or book references, licenses, permits, patents,legal documents, copies of leases, contracts and list of business consultants,including attorney and CPA. Be sure to include “Private Placement Memorandum”as a legend on your Appendix.
Business Attorney Andy Lannon is a Board-Certified Attorney with over 19 years of experiencehelping business owners with their legal needs. Learn more about setting up abusiness plan and corporate structure by schedule a free consultation.