Writing a Business Plan
Stephen A. Fuqua 2003
This short article was written as an overview presentation while I was a business counselor at BiGAUSTIN, a micro-enterprise development corporation in Austin, TX.
A business plan serves many objectives: It…
- helps you determine the feasibility of your business idea;
- serves as a roadmap for you as your business progresses; and
- is a tool for communicating with potential lenders and investors.
A good business plan must be well written, well organized, and thorough—providing all of the details necessary for someone unfamiliar with you and your business concept to make informed decisions. Further, it will help you stay on target and self-evaluate—have you been meeting your financial goals? have you done everything you set out to do?
There is no set format for your business plan. The content will depend on the nature of your business, and no one will be able to tell you off hand if it is right or wrong. Nevertheless, some plans are better than others. The exact format and content of your business plan are up to you. At a minimum, you’ll need to describe the following topics:
- The business concept;
- How you will market your product or service; and
- How you will manage the business.
In addition, you will need to include some financial data, such as:
- Start-up budget;
- Break even point;
- Cash flow projections; and
- Pro-forma balance sheet.
The Business Concept
Write a basic overview of your business concept. The reader should be able to put the plan down and tell someone else what your business is just from reading this section. She will not be able to relate the details on pricing, competition, or your hiring practices, for instance, but she will know what you are setting out to accomplish, why, and what your product or service is or will be.
Markets and Marketing
Here you will describe such elements as how you set your pricing and how and where you will do your selling (door to door, in a retail shop, over the Internet, etc.). You will also tell all about your target market—whom you intend to sell to, where they are located, and how large is that population. Moreover, you’ll want to inform the reader of who is competing with you for this market, and what will help you to succeed in the face of such competition.
Who will be running the day-to-day operations? Will you be hiring anyone? What kinds of insurance or licenses are needed for your line of business? How will you do your accounting? What will the legal structure be? These questions and more will need to be addressed.
The descriptions we’ve provided above are really just a simplification of what a good business plan usually consists of. You should view our more comprehensive checklist before finalizing your business plan. Of course, having a format or checklist is only a starting point: you still have to provide the answers and fill in the blanks.