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Does Your Small Business Need a Business Plan?

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small business components of a business plan

The Business Plan is the blueprint for your business. It is a living document.

 

The Executive Summary – Your Business ID The Executive Summary is both a marketing tool and a document that provides hard data.

It does not provide all the details contained in a Business Plan.  It is a sales tool that should be concise and persuasive. It is meant to create an interest so that the reader will delve further. 

Like most marketing tools it serves as a “teaser” for a specific audience..

The Executive Summary should not be more than a three page documents. It must include appropriate financial information; with details provided in an attached appendix.  To send a forty plus page document as an introduction to your business is not considered a sensible way to get an immediate response. 

Once the party is “hooked”, more details can be provided.

Each Executive Summary must be customized for its audience. The information contained in an Executive Summary prepared for an investor or a lender differs from content provided to a vendor or a prospective employee.

Material can be added or deleted for each reader.

The material presented to a prospective vendor might include additional marketing material. The material provided to a buyer prospect might include sales prices for each service or product offered.

The following Executive Summary outline is provided for a loan application.

Frequently lending institutions have on-line applications that ask you to provide the same information in their format.  You can receive a quick response from the lender if you are able to complete the application.

This outline will assist you in preparing for the on-line application as well as preparing your own Executive Summary.

Capital Request                

Loan Amount & Loan Term:

Source & Use of Funds: Intended Equity Contribution should be noted

 The Entity                          

Name of Legal Entity and DBA

 Business Address (if leased, include term of lease):

 Years in Business:

 Web Site:

Contact Info:  

The Business                     

The Industry/The Services/The Products/The Market:                                                

Current and Long Term Objectives:

Historical P&L summary:3 years (for existing companies):

Revenue Projections      

Gross Revenue and  EBITDA (3 years):

Company Balance Sheet:

Current Asset and Liabilities, Net Worth  Summarized

The SWOT Analysis        

Strengths, Weaknesses Opportunities and Threats:

Personal Financial Info  

Net Worth of all Principals. (PFS statements in Appendix)*

Personal Credit Score:    

A current FICO score (not more than 90 days) For all owners of 20% or more of the borrowing entity. (Equifax, Trans Union or Experian)

Schedule of Exhibits:  

To be made available to interested parties. CVs of all principals, financial history of the company, budget details, cash flow   projections, and personal financial statements.

The plan for your business provides the foundation for the Executive Summary.

When the plan for your business is put into a written format it is called a Business Plan.  However the traditional Business Plan is no longer used as a tool to illicit initial interest in your business.

Next- The Business Plan is the blueprint for your business.

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The Business Plan is the blueprint for your business.

The Business Plan is the blueprint for your business. You need to prepare a rough sketch and make revisions as you grow your business. 

It is a living document. I may never be a completed a finished blueprint ready for production. It is undertaken to provide the owners with goals and strategies, both short and long term.

Principals of the company

The most qualified persons to prepare the business plan are the founders or the principals of the company. 

The owners may hire a professional to finalize the document into a format that is easy to read, and has more graphic appeal, but the facts that support the content should be the work of the executives of the company. Every Business Plan should reflect the goals and the paths intended to achieve the goals.

The Business Plan must take into consideration the corporate structure, the marketing plan, the management team, the real estate needs, the pre-opening expenses and the operating budget. 

In addition cash flow projections with realistic goals must be matched with action plan with time parameters to achieve those goals. This is a living document, changeable with the passage of time and the progress of the business. There are segments of the document that can be used when preparing an executive summary.

In the opinion of the author, as long as your business is operating you do not finalize the Business Plan. 

You keep it updated and meaningful, but it is always in draft format. You should date each version. If you wish to make a written presentation to a meaningful audience your format should be an Executive Summary that will highlight the strengths of the business and serves to induce an interested party to request more information.

The follow up would be the presentation of the most current version of the Business Plan.

Related articles:

Primary Components for a Comprehensive Business Plan

Crafting a Business Plan

Suggested Business Plan Outline


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