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Business Plan

An effective business plan serves at least four useful purposes:

  • It helps entrepreneurs focus their ideas. It also helps determine whether a business idea is feasible
  • It creates a track for management to follow in the early stages of the business
  • It creates benchmarks against which the entrepreneur and management can measure progress
  • It provides a vehicle for attracting capital to help finance the business

A well-written business plan is an important document for any business seeking financing. However, a thorough business plan is an essential tool for all businesses, regardless of financial needs. Most lenders will not even discuss financing without a business plan. The business plan brings together all the goals, plans, strategies and resources of a business. In addition, if you write a comprehensive business plan prior to the commencement of operations, it may save you from significant financial and professional losses in an unprofitable business. Both the federal and state governments provide assistance in helping you create your business plan and in locating financing opportunities. Refer to the Sources of Assistance and Financing Options chapters of this guide.

Planning Hints

A sound business plan requires an investment of substantial time and resources. You may require the assistance of qualified professionals to complete your plan. Refer to the Choosing Advisors and Sources of Assistance of this guide.

Suggestions on Format and Approach

  • Provide a table of contents and tab each section
  • Type the plan on 8.5″ x 11″ paper
  • Use charts, graphs and other visual aids, as well as color, to add interest and improve comprehension
  • Indicate on the cover and the title page that all information is proprietary and confidential
  • As you complete sections of the plan, ask impartial third parties to review them and give their perspective on the quality, clarity and thoroughness of the plan
  • There are sixteen SBDCs listed in the Sources of Government Assistance that provide free one-on-one consulting in many areas, including business plans
  • Finally, if you attend to use your plan to attract capital, honestly ask yourself whether you would invest in the business based on reading the plan. If you can’t honestly answer yes, then the plan needs more work

There are no hard and fast rules in formatting your business plan. However, it should be written by the owner of the business with outside assistance as necessary.