The Business Plan....
An entrepreneur begins planning by understanding their objectives in starting a business. A plan is always a good idea.
People write business plans for all kinds of reasons: To remind themselves what the heck they're doing; to show to their employees, who might wonder what the heck they're doing; to send to their mother to show her that they're actually doing something; and to show to prospective investors, including, perhaps, their mothers
What should my business plan include?
You'll need to include at least five critical pieces of information in your business plan.
  1. Cash flow projections: this will indicate how much money - before taxes, interest payments and expenses - you can reasonably anticipate generating from your business in a specific period, such as a month or a year. If you can chart two years of cash flow projections on a month-to-month basis, it would be beneficial.
  2. Information that your plan's readers want to know. Your investor needs information to convince them that your business will provide them with a reasonable expectation of profit on their investment. In other words, provide the details that investors need rather than the information you want them to hear.
  3. How you plan to get from A to B, let alone to Z. If you plan says you will generate revenues of $1 million in your first year, you have to show your reader how you expect to do this.
  4. Your plan has to show "determination, commitment, and competence."
  5. Your plan, like a real estate ad, is just a piece of paper. You have to know what to do with it once you've written it.

What not to include in your business plan:
  1. Don't be too detailed. A dozen pages is sufficient.
  2. Be written in plain English, without jargon and without reference to vague or unidentified sources of income, support, or financing.
Your plan should resemble this:
  1. Executive summary
    • the business concept and the business
    • the opportunity and strategy
    • the target market and projections
    • the competitive advantage
    • the economics, profitability, and harvest potential
    • the team
    • the offering
  2. The industry, the company, and its products or services
    • the industry
    • the company and concept
    • the products or services
    • entry and growth strategy
  3. Market research and analysis
    • customers
    • market size and trends
    • competition and competitive edges
    • estimated market share and sales
    • ongoing market evaluation
  4. The economics of the business
    • gross and operating margins
    • profit potential and durability
    • fixed, variable, and semi variable costs
    • months to break-even point
    • months to reach positive cash flow
  5. Marketing plan
    • overall marketing strategy
    • pricing
    • sales tactics
    • service and warranty policies
    • advertising and promotion
    • distribution
  6. Design and development plans
    • development status and tasks
    • difficulties and risks
    • product improvement and new products
    • costs
    • proprietary issues
  7. Manufacturing and operations plan
    • operating cycle
    • geographic location
    • facilities and improvements
    • strategy and plans
    • regulatory and legal issues
  8. Management team
    • organization
    • key management personnel
    • management compensation and ownership
    • other investors
    • employment and other agreements, including stock option and bonus plans
    • board of directors
    • other shareholder, rights and restrictions
    • supporting professional advisers and services
  9. Overall schedule
  10. Critical risks, problems, and assumptions
  11. The financial plan
    • actual income statements and balance sheets
    • pro forma income statements
    • pro forma balance sheets
    • pro forma cash flow analysis
    • break-even chart and calculation
    • cost control
    • highlights
  12. Proposed company offering
    • desired financing
    • offering
    • capitalization
    • use of funds
    • investor's return
  13. Appendices
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