The Business Plan

Planning is vital to successfully starting and growing a business or a web based business and preparing a business plan is a critical step for securing financing. For that reason, many business owners hire consultants to help them research, organize, and present all the relevant business plan information to potential investors.

Key questions to ask when comparing consultants are:

What kind of experience – how many business plans have they written in total?

What is their success rate – what percent of the plans they've written have been funded?

What is the cost – paying a per-project fee may be more economical than an hourly fee.

Get free help from government agencies, the U.S. government wants small businesses to thrive, and they have several agencies and partnerships established for that exact purpose.

Call your local centers for free or low cost business plan preparation help.

Small Business Development Center

Women's Business Center

Minority Business Development Center

Search for consultants specializing in your type of business.

Guru.com

Examine work samples Bplans.com

Consult the Directory on Business.com.

Besides cost, one of the ways to separate firms is through their work. Ask to see samples of completed plans to get a sense of the firm's style and capabilities. Check out their staff ,who will be responsible for helping you prepare your plan – an experienced entrepreneur with an MBA, or a junior consultant just getting started?

Some firms allow you to view samples of their work online:

The Business Plan Store

MasterPlanz

Check out the About section of most Web sites it will give you a glimpse of the talent pool you'll be working with at firms like:

GrowthThink

Cayenne Consulting

Windhaus Associates

If you've already pulled together background information and have thought through how you intend to run the company, a business plan software package may be all you need to at least create a draft.

Software packages are great tools for structuring the different pieces of your plan, but they can't do the thinking for you. However, if all you need is formatting help, take a look at Planmagic, Business Plan Pro, PlanWrite, or free shareware.

Helpful advice

If someone else is writing your plan:

be sure you stay involved in the process, to answer detailed questions from potential investors.

work you can do up front to gather statistics, organize your background materials, or create a first draft can reduce the amount of time a consultant has to spend on the project, and potentially your final bill.

working with someone locally can be convenient, don't limit yourself solely to consultants within a five-mile radius; the best one for you may be 300 miles away.

ask for recommendations from other business owners, investors, bankers, and accountants to be sure you select a reputable firm.

Review and update your plan to manage growth.

What goes into a business plan? Here is the layout, the body can be divided into four distinct sections:

1) Description of the business

2) Marketing

3) Finances

4) Management

The business plan 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 financials 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.