Entrepreneurs often spend hundreds, if not thousands, of hours thinking about and planning for a new business. If they are wise, they also go through the formal exercise of developing a business plan, which can produce several important benefits:
1. A business plan will be an essential part of any request for financing. A well-prepared plan improves your chances of getting the funds you need.
2. The plan can guide your policies and actions over a number of years as you establish your new business.
3. The process of preparing the plan will enable you to focus on issues that are essential for the future success of your business.
What the plan should include
A formal business plan should be quite detailed. Here’s a suggested outline for what it should include:
- Business identification
History and milestones
- Description of the business
Company’s products and services
- Market analysis
Competitive analysis, including competitors
Facilities and offices
Leases or real estate owned
- Financial information
Income statements, historical and projected
Balance sheets, historical and projected
Cash flow analysis
As you develop your business plan, remember that statements should be supported with data whenever possible in order to add credibility. Using charts and graphs to present the data is also recommended.
Well worth the effort
The preparation of a full-blown and high-quality formal business plan can be an arduous task. However, the process of preparing the plan will put you in a better position to make daily decisions once your enterprise is under way. The document will be useful when you are seeking financing, when you need to explain the business to potential key employees, and someday when you go to sell the business you worked so hard to create.
This news is provided as a service to you by Marlin Business Services Corp., a nationwide leader in commercial lending solutions for the U.S. small business sector. Marlin’s equipment financing and loan programs are available directly and through third-party vendor programs, including manufacturers, distributors, independent dealers and brokers, to deliver financing and working capital that help build your success.