Writing the Business Plan

What goes in a business plan? This is an outline of everything we have discussed in the Business Planning series of articles.   Again, as you are reading through this, keep in mind the scale, or order of magnitude of your business.  Some of the sections may not apply to you, or may apply to you in a much different way due to your size.  For example, item B in section ii, "Capital equipment and supply list."  This clearly does not apply to me at this time.  However, if I were to resume dropshipping, this could have some relevance.  No matter how small you are, pay attention to the items listed here, because they will help you understand how to think about and take action with respect to your business.

The body of the plan can be divided into four distinct sections:

1) Description of the business
2) Marketing
3) Finances
4) Management

Agenda should include an executive summary, supporting documents, and financial projections. Although there is no single formula for developing a business plan, some elements are common to all business plans. They are summarized in the following outline:

Elements of a Business Plan

1. Cover sheet
2. Statement of purpose
3. Table of contents

                I. The Business
               A. Description of business
               B. Marketing
               C. Competition
               D. Operating procedures
               E. Personnel
               F. Business insurance

               II. Financial Data
               A. Loan applications
               B. Capital equipment and supply list
               C. Balance sheet
               D. Breakeven analysis
               E. Pro-forma income projections (profit & loss statements)
               F. Three-year summary
               G. Detail by month, first year
               H. Detail by quarters, second and third years
                I.  Assumptions upon which projections were based
               J. Pro-forma cash flow

               III. Supporting Documents
               A. Tax returns of principals for last three years Personal financial
                   statement (all banks have these forms)
               B. For franchised businesses, a copy of franchise contract and all
                   supporting documents provided by the franchisor
               C. Copy of proposed lease or purchase agreement for building space              
               D. Copy of licenses and other legal documents
               E. Copy of resumes of all principals
               F. Copies of letters of intent from suppliers, etc.