Ideally a business plan describes a business setup, speck out ones business goals and the continuation of the business. A standard business plan must contain the basic components of business management. These include current and pro forma balance sheet, an income statement and a cash flow analysis. These help an entrepreneur to properly locate resources and make good decisions.
A good business plan serves as a best requirement for loan application simply because it shows the direction of the business especially the cash flow. A business plan can help an entrepreneur seeking external funding, credit from suppliers, promotion and marketing of your business, monitor your day-to-day operations and business goals and management of finances
2 Business Plan Outline:
The outline below serves as a guideline to writing business plan. It advised to break down the components into several subtopics. This helps drafting a manageable and easy task.
1. Give a detailed explanation of the business and its goals.
2. Discuss the ownership of the business and the legal structure.
3. List the skills and experience you bring to the business.
4. Discuss the advantages you and your business have over your competitors.
1. Describe the products/services offered.
2. Identify the customer demand for your product/service.
3. Identify your market, its size and locations.
4. Explain how your product/service will be advertised and marketed.
5. Explain the pricing strategy.
2.3 Financial Management
1. Explain your source and the amount of initial equity capital.
2. Develop a monthly operating budget for the first year.
3. Develop an expected return on investment and monthly cash flow for the first year.
4. Provide projected income statements and balance sheets for a two-year period.
5. Talk about your break-even point.
6. Explain your personal balance sheet and method of compensation.
7. Discuss who will maintain your accounting records and how they will be kept.
8. Provide "what if" statements that address alternative approaches to any problem that may arise.
2.4 Business Operations
1. Explain how the business will be managed on a day-to-day basis.
2. Discuss hiring and personnel procedures.
3. Discuss insurance, lease or rent agreements, and issues related to your business.
4. Account for the equipment used in the production of your products or services.
5. Account for production and delivery of products and services.
Give a brief summary of your business goals and objectives and show your business ambitions. Note that a business plan is not static at all, it keeps changing as your business grows.