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The All Important Business Plan

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credit: Joe Raedle/Getty Images

credit: Joe Raedle/Getty Images

I Love It When A Plan Comes Together.

 

Here’s a memorable quote just for you from one of the great minds of the ‘80’s – John “Hannibal” Smith. You remember, of the “A-Team”. Hannibal always knew what he was talking about when it came to the importance of good planning.

Seriously, planning can make or break ya! In the real world if that mercenary thing didn’t work out for Hannibal, he could have been a cutting-edge business consultant – specializing in drafting and executing business plans.

Let me provide you with a little analogy. You want an itinerary when you go on a trip, correct? The itinerary indicates all the particulars of the trip such as:

  • Times
  • Arrivals
  • Departures
  • Accommodations

Step back a bit and let it roll around in your head. Don’t you think you need an “itinerary” for your business? In the famous words of Yogi Berra, “You’ve got to be very careful if you don’t know where you’re going because you might not get there.” Really all you’re doing to create a business plan is moving ideas from your head to paper, in an organized, clear, convincing manner.

Some business plan basics to keep in mind:

Your business plan should be 20 to 25 pages in length. If a section ends mid-page, do not start your next section on that page, start a new page. This will make the plan flow smoothly and read more easily. Remember on the whole you will need a well-written business plan to acquire a loan. Perform your due-diligence – research your competition and the market, also determine your customer-base. These are major factors to a well-rounded business plan.

KEY COMPONENTS

Break your business plan down into sections like this:

  • Executive Summary – consider this the overview (1 to 2 pages)
  • Table of Contents – indicates what is on each page
  • Business Description – indicates owners, type of business, goals etc.
  • Managers & Employees – provides organizational chart, # of employees etc.
  • Operations & Location – How will business operate, suppliers location etc.
  • Marketing Plan – promotion, price, product and distribution etc.
  • Section if Buying a Business or Franchise
  • Loan Request – how much? How will $ be used, what terms etc.

FINANCIAL STATEMENTS

  • General Information – overall financial picture
  • Personal Finances – statements from each “partner”
  • Balance Sheet – assets, liabilities and net worth
  • Income Statement – sales, expenses and profit
  • Statement of Cash Flow – shows trends of liquidity & solvency
  • Ratios – lender’s compare your ratios to competitors’ ratios
  • Formulas – ex: break-even point
  • Appendix – ex:  manager’s job description

A business plan is a living, breathing document. Therefore, once the plan is written don’t just stick it away somewhere. Bring it out and let it see the light of day – maybe once a quarter, twice a year, or annually. Make changes if need be. Remember the business plan is there to help keep your business on track and achieve your goals.

If you would like assistance drafting and writing your business plan, or you have an existing business plan and you need assistance revising the plan – find a reputable expert to lend a hand.

Steve Whitaker

Steve’s Light Bulb Moments LLC

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