BUSINESS PLAN FORMAT
Whether you plan to apply for a business loan or not, you need to have a roadmap or plan to get you from where you are to the successful operation of your business. The pages that follow demonstrate the content of a simple business plan which has been found to be successful in obtaining startup funds from banks. You are encouraged to use all or whatever portions of this fit your business.
Please DO NOT write page after page of drivel or copy from someone else’s plan or one of those templates you can find on the
Internet. In most cases this will not “sound’ like you, nor will it be short and to the point. Those who read these things are busy people and will not be inclined to spend time reading non-relevant paperwork.
Throughout this sample, there are italicized comments which are
meant to guide you in preparation. If you follow this format it is reasonable to expect a finished document with 15-20 pages plus the supporting documents in the last section.
If you have good quality pictures of your space, products or other items, you might include them as another way to convey just what you plan to do. A map of your location, diagram of floor space, or other illustration is also sometimes helpful. On the other hand, do not add materials simply to “bulk-up” the report.
While content is critical, it is also important to make this presentation look as good as possible. Print the pages in black ink on a high quality tinted letterhead paper. Color is not necessary but would add some interest in headlines, etc. Bind the document in a presentation folder or with a spiral binding. Don’t simply punch a staple in the upper left corner.
Once you have a draft of the document it will be helpful to meet with your SCORE counselor for a review and critique.
NOTE: Before you begin your inspection of the simple plan outline which follows, take a moment to review the Business Plan Checklist on the next page.
BUSINESS PLAN CHECKLIST
By way of review, here is a concise list of the basic requirements
for a Business Plan, as recommended by the MIT Enterprise Forum:
? Appropriate Arrangement- prepare an executive summary, a table of
contents and chapters in the right order.
? Right Length- make it not too long and not too short, not too fancy
and not too plain.
? Expectations- give a sense of what founder(s) and the company expect
to accomplish three to seven years in the future.
? Benefits- explain in quantitative and qualitative terms the benefit to
the consumer of the products and services.
? Marketability- present hard evidence of the marketability of products
? Revenue Basis- justify the means chosen to sell the products and
? Development Status- provide level of product development that has
been achieved and describe process and associated costs.
? Management Team- Portray founder/partners as a team of
experienced managers with complementary skills.
? Rating- suggest an overall rating of product development and team
? Financial Projections- provide believable financial projections with key
data explained and documented.
? Investment Return- show how investors can cash out in three to seven
years with appropriate capital appreciation.
? Financier Interviews- present to the most potentially receptive
financiers to avoid wasting time as resources dwindle.
? Oral Presentation- create an easy and concisely explainable well
orchestrated oral presentation
(This is the Cover Page)
Street City, State, ZIP
Website email Address
City, State, ZIP
This is the first page if you are asking for funding.
This can be in the form of a letter, dated and addressed to the
individual from whom you are requesting the funds. It can also be just a
simple statement in paragraph form (no more than half a page).
In this letter or statement, include this information:
? This is a request for funds in order to do what?
? Name the business and whether it’s a proprietorship,
partnership or corporation.
? Who are the principles?
? How much are you requesting, on what terms, and when do
you need it?
? How much are you putting into the project?
? What will the money be used for?
? How do you expect to pay it back?
While not absolutely necessary, you can refer to different portions of
the Plan when answering the questions above.
Sign this sheet.
TABLE OF CONTENTS
Number all the pages in the Plan and key them on this page.
Section 1 - Description of the Business
Owners and Credentials
Products and Services
Section 2 - Business Operations
Equipment and Processes
Section 3 - Marketing
Section 4 - Financial Data
Start Up Expense
Profit and Loss (3 years)
Section 5 - Supporting Documents
Personal Financial Statement
Federal Tax Returns (3 yrs)
Credit Report and Score
While not absolutely necessary, tabs or divider pages would be a nice
DESCRIPTION OF THE BUSINESS
This entire section can be accomplished in not more than 3 pages. Keep your paragraphs short and use the sub-heads as shown to make the material easier to read.
This is the general introduction to all that will follow. Name the owners and the type and name of the business. Where is it located? What products or services will be offered? You need not go into detail; this is just a general statement of what is to come.
OWNERS AND CREDENTIALS
What form of organization is used? Who are the principles? Give a detailed description of each owner, complete as to marital status, education and business experience. Remember that your lender will be impressed by your credentials so don’t skimp on this description. Modesty
here will win no points.
PURPOSE OR MISSION
Describe why you are doing this. Who will it benefit and what are your overall aims or objectives?
Give your specific location if you have one. If not, describe the ideal location or what you are looking for and how you are going about it. Describe your lease in respect to cost, terms, etc. Describe the area, traffic count and other favorable factors. What about parking, visibility, lighting, etc? Refer the reader to an accompanying map. If layout is important, add a drawing of the floor plan, including dimensions, fixtures, equipment, etc.
PRODUCTS AND SERVICES
It will be very important for the lender to understand what you intend to sell. Describe the products or services in some detail, but avoid very technical talk, buzzwords and other “speak” that can confuse the reader. You may find it helpful to group products or services into categories
BUSINESS ADVISORS AND SUPPORT NETWORK
A lender will be encouraged by knowing that you are not attempting to do this without assistance from other “experts”. List here (names, companies and addresses and telephone numbers) those whom you are using as advisors, including your Accountant, Attorney, Insurance Broker, Banker, SCORE Advisor, etc. If you have joined the Chamber of Commerce, a Trade Association, or another business group, list them also.
Here you are going to describe how the business operates, perhaps in no
more than two pages. This will be particularly important if you will be
manufacturing something. If you are in the selling game, describe your
basic sales technique (not to be confused with advertising which comes
Be specific in order to show that you have already planned even the
smallest of details. Do you operate by appointment or by walk-ins. If you
are working out of your home, can people visit you there? How will you
monitor customer traffic?
EQUIPMENT AND PROCESSES
You probably will need certain fixtures and equipment. Do you already
have this or must it be purchased? Will it be new or used? Is it state-of-
the-art? If you are manufacturing something, provide a brief, non-technical
summation of the process.
SUPPLIERS AND SUB-CONTRACTORS
Provide a listing (names and addresses) of your principal suppliers. This
shows that you have planned ahead and already know how you will
obtain those supplies you need to run the business.
In 2-3 pages, you can describe what might be the most critical section of
your Plan because it will indicate how you intend to go about getting
customers. The lender will be very interested in how specific you are, and
how well you have thought this through.
This is the introductory part of this Section and can be somewhat general.
Describe your principal and secondary markets in terms of where they are,
who they are and how you will reach them. This might be an excellent
place to list the specific reasons why you will have a market advantage
(don’t overestimate the value of “customer service”).
Name your competitors and show their location on a map if this is useful.
How have you researched them? What advantages might you have over
them? Indicate your plan to deal with this competition.
What will be your overall pricing strategy – low ball, average, high? How
will you decide on the prices for your products or services? Are the prices
competitive? If you can name a few key items (each should account for at
least 10% of Sales) list them and show the prices you plan to offer.
You should be able to describe, in great detail, the first 3 months of
advertising you will do, including an estimate of the costs involved, and
the media used:
Mailings Website Tradeshows
Yellow Pages Events Newspaper
Personal Calls Magazines etc.
How will you know which media is most effective for you? If you can
include sample advertisements, do so.
A lender will be VERY interested in how you portray your income and
expense, how long it will take to break even, and how you expect to be
able to pay back the loan. This Section will be heavy on the numbers, but
if they are not QUICKLY understood by a reader, you will lose him or
her … and probably not get a loan. Remember: the lender wants a
reasonable amount of assurance that he/she will get back the loan
amount with interest, and if there is a lack of understanding of your Plan,
or an obvious flaw in it, you will be DOA!
Every financial plan is based on certain assumptions and it will be helpful if you list some of the obvious ones. This also shows the lender that you
are a knowledgeable player and one who has thought through all the
important elements of your project. The following items are usually the
basic assumptions for a new business and the funding necessary to start
? The start date.
? The date funds will be available, the amount, debt service and payback commencement date.
? The equipment and supplies needed will be in place on
? The percentage increases in Sales, Cost of Sales and
Expenses from year to year.
? Add other important assumptions you have made, or will
START UP EXPENSE
Here you will be listing just about everything you will need in order to start
the business. In each category, list the item and how much you expect to
spend on it. Again, doing this shows the lender that you are VERY
organized and know exactly what you need in order to be successful.
INVENTORY AND SUPPLIES:
These are the items you will stock for resale. Unless you are making them
yourself, you will purchase them from a supplier. If not it might be well to
describe how you will be able to respond to a customer on the very first