Writing a Business Plan

The primary value of your business plan will be to create a written outline that evaluates all aspects of the economic viability of your business venture. Not only does it provide you with a plan to follow, but it introduces your business to prospective lenders, in this case, People Incorporated Financial Services’ Loan Review Committee. It will show us how well your proposed project has been thought out.

What goes into a business plan? The body can be divided into four distinct sections:

1. Description of the business
2. Marketing
3. Finances
4. Management

A business plan should include an executive summary, supporting documents, and financial projections. Although there is no single formula for developing a business plan, some elements are common to all business plans. They are summarized in the following outline:

Elements of a Business Plan

1. Cover sheet
2. Statement of purpose
3. Table of contents
   1. The Business
      • Description of business
      • Marketing
      • Competition
      • Operating procedures
      • Personnel
      • Business insurance
   2. Financial Data
      • Loan applications
      • Capital equipment and supply list
      • Balance sheet
      • Breakeven analysis
      • Pro-forma income projections (profit & loss statements)
      • Three-year summary
      • Detail by month, first year
      • Detail by quarters, second and third years
      • Assumptions upon which projections were based
      • Pro-forma cash flow
   3. Supporting Documents
      • Tax returns of principals for last three years Personal financial statement (all banks have these forms)
      • For franchised businesses, a copy of franchise contract and all supporting documents provided by the franchisor
      • Copy of proposed lease or purchase agreement for building space
      • Copy of licenses and other legal documents
      • Copy of resumes of all principals
      • Copies of letters of intent from suppliers, etc.