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Frequently Asked Questions
Helpful Links
Useful Documents
Frequently Asked Questions
Business
Plan FAQ's
1. Do
I need a business plan?
2. What's
in a business plan?
3. What
makes a successful business plan?
4. How
do you write a business plan?
The best way to show bankers, venture capitalists, and angel investors
that you are worthy of financial support is to show them a great business
plan. Make sure that your plan is clear, focused and realistic. Then show
them that you have the tools, talent and team to make it happen. Your
business plan is like your calling card, it will get you in the door where
you'll have to convince investors and loan officers that you can put your
plan into action.
Once you have raised the money to start or expand your business, your
plan will serve as a road map for your business. It is not a static
document that you write once and put away. You will reference it often,
making sure you stay focused and on track, and meet milestones. It will
change and develop as your business evolves.
1.
Do I need a business plan?
Not everyone who starts and runs a business begins with a business plan,
but it certainly helps to have one. If you are seeking funding from a
venture capitalist, you will certainly need a comprehensive business plan
that is well thought out and contains sound business reasoning.
If you are approaching a banker for a loan for a start-up business,
your loan officer may suggest a
Small
Business Administration (SBA) loan, which will require a business
plan. If you have an existing business and are approaching a bank for
capital to expand the business, they often will not require a business
plan, but they may look more favorably on your application if you have
one.
Reasons for writing a business plan include:
-
Support a loan application
-
Raise equity funding
-
Define and fix objectives and programs to achieve those objectives
-
Create regular business review and course correction
-
Define a new business
-
Define agreements between partners
-
Set a value on a business for sale or legal purposes
-
Evaluate a new product line, promotion, or expansion
2. What's in a business plan?
A business plan should prove that your business will generate enough
revenue to cover your expenses and make a satisfactory return for bankers
or investors.
-
Executive Summary-features the highlights of your plan and
sells your idea in two pages or less.
-
Company Summary-a factual description of your company,
ownership, and history.
-
Products (or Services or both)-describes your products and/or
services and how they stand out from competitive products and
services.
-
Market Analysis-provides a summary of your typical customers,
competitive landscape, market size, and expected market growth.
-
Strategy and Implementation-describes how you will sell your
product, how you will put your plan into action, and establishes
milestones.
-
Management Summary-provides background on the management
team, their experiences, and key accomplishments.
-
Financial Plan-contains key financials including sales, cash
flow, and profits.
3.
What makes a successful business plan?
-
A well thought out idea
-
Clear and concise writing
-
A clear and logical structure
-
Illustrates management's ability to make the business a success
-
Shows profitability
4.
How do you write a business plan?
Sitting down looking at a blank computer screen as you prepare to start
your business plan can be daunting. You may want to look at some
alternatives that will make the process a bit easier.
Hire a Professional
A professional consultant will create the business plan for you, but you
still have to be prepared to think through your business and understand
the underlying concepts in your business idea. You will have to work
closely with the consultant to ensure that he or she develops a good plan
that accurately represents your business or business idea.
