You know you’ve got a winning business idea, and with your entrepreneurial spirit, you’re probably ready to open up shop tomorrow. However, there are a few key elements that can help create a solid foundation for your business, so when you do finally open your doors, you’ll be heading down the path to success.
One of these key elements is a business plan. A business plan is a comprehensive document. It can be organized in many different ways, but here are 10 typical items, courtesy of Citibank’s Small Business Resource Center, that a business plan includes:
1. Cover Sheet or Title Page
Keep your introduction to a single page, and include the: Name of the company, Company address, Company phone number, Logo (if you have one), Owners’ names, titles, addresses and phone numbers, Website address, Month and year in which the plan is issued and the Name of the person who prepared the business plan.
2. Executive Summary or Mission Statement
Prepare a one to two page overview of the plan. This should include the name and purpose of the business, as well as its legal structure, financial requirements, and your debt repayment plans.
3. Business Description
Develop one to two pages with the following information about the business: Overview of the business/Mission Statement, Name of the company, or services including any original products or services that are patented or copyrighted, Legal structure, Location and Management
4. Business Model
Provide an overview of how your company will do business, make money, and operate within an industry, including: Value proposition, Target market, Value chain, Cost structure and target margins and Competitive advantage
5. Financial Plan
Provide a clear roadmap to your company’s financial future, including: Income (Profit and Loss) Statement, Cash Flow Statement (budget), Balance Sheet, Three-year income projection, Break-even analysis, Actual performance statements, if available, Summary of financial performance, Summary of financial needs, Assumptions and business ratios as well as, Sources and uses of funds statement
6. Market Analysis and Marketing Plan
Include specific details about:
Market Analysis: Industry trends overview, Target market, plus additional markets, Competition and the Target customer needs and how your product will satisfy them
Marketing Plan: Pricing, Sales plan, internal sales management, as well as third-party sales representatives or distributors and Advertising and promotion plans
7. Operations Plan
Describe the following depending on the nature of your business: Design and product manufacturing, Billing and collections process, Distribution network, Inventory control program, Warehousing, Shipping, Record-keeping systems, Insurance and Security.
8. Human Resources Plan
Explain the Management structure, Human resources strategy and staffing requirements
9. Future Directions
Include a general description of how you expect the business to grow and what the likely next steps are for its: Expansion and purchase of, or partnership with, another company
10. Supporting Documents
Include: Resumes of key management executives, Personal financial statements, Credit reports, Copies of leases, Copies of other contracts, Legal documents, and Miscellaneous information resources, including research reports, articles, and other documents
Now, keep it going! Remember, as an entrepreneur, you shouldn’t view the act of creating a business plan as a one-time-only event. Just as your business will evolve over time, so too must your vision of its future. That’s why it’s essential to reevaluate your situation and outlook each year—and update your plan accordingly.
For more information, visit the Citibank Small Business Resource Center.
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