NEW VENTURE GUIDE
by the UALR Arkansas Small Business Development Center
Business Plan Guidelines
Every business can benefit from the preparation of a
carefully written business plan. The purpose of the business
plan is to:
1. Help you think through the venture and ensure you have
considered all your options and anticipated any potential
difficulties.
2. Convince lenders and investors that you are in control
of the project and that their money will be safe with you.
3. Serve as an operating guide as you turn your idea into
a viable business.
The following pages provide a suggested outline of the
material that should be included in your business plan. The
final product should be tailored to fit the circumstances and
personality of you and your business. Use the resources in
this guide along with other information that you gather
during your planning to write a detailed plan of action for
your business. By doing plenty of work before you begin, you
will be better prepared to face the challenges ahead.
The UALR Arkansas Small Business Development Center's
Research Center is a great place to research issues related
to your business planning. You may benefit by attending our
seminar on writing a business plan, offered several times
during the year at various locations around the state. Call
us or visit our Internet site for seminar information.
Business Plan Outline
1. Cover: Name, address, and phone number of
business. Give your plan a businesslike appearance by typing
on high quality paper and putting it in a vinyl or cardstock
binder or a three-ring binder.
2. Title Page: Repeat the business name, address
and phone number, and add the name and addresses of the
principal owners. Also show the dates of issue of the plan
and type "copy number ___" so you can number and
control the copies.
3. Executive Summary: A brief (one-page) statement
of the business plan objectives. Address the following
questions and add additional information that will help you
achieve your goals. (You may choose to write this page last.)
A. What is purpose of this plan? Will it be used as:
an operating guide? a financing proposal?
B. What business structure have you chosen (i.e., sole
proprietorship, partnership, corporation, s-corporation)?
C. Who are the principals and what are their
proportions of ownership?
D. Why will the venture be successful?
For a financing proposal:
E. Who is requesting the funds and how much is needed?
F. What will the money be used for?
G. How will the funds be repaid?
H. What collateral will be offered to secure the loan?
I. Why does a loan or an investment make sense?
4. Table of Contents: A single page showing major
topics and page references.
5. Description of the Business: Answer as many of
the following questions as are appropriate:
A. What business are you in?
type of business: primarily merchandising,
manufacturing, or service? what is the nature of the product(s) or
service(s)? what will be special about your business?
B. What market do you intend to serve? What is the
total market, and what is your expected share?
C. How can you serve the market better than your
competition?
D. Present status of the business: start-up, expansion
of a going concern, or take-over of an existing business?
E. If you will be doing any contract work, what are
the terms? Reference any firm contracts and include them
as supporting documents.
F. Do you have any letters of intent from prospective
suppliers?
For existing business:
G. What is the history of the business?
H. Why does the owner wish to sell at this time?
I. If the business is going downhill, why? How can you
turn it around?
J. How will your management make the business
profitable?
K. What is the purchase price formula? Give breakdown
for building, improvements, equipment, inventory and
goodwill.
Note: If yours will be a seasonal business, make sure
seasonality is reflected in your narrative and financial
projections with appropriate footnotes.
6. Business Location:
A. What is your business address and why did you
choose this location?
B. Will the building be leased or owned?
C. What are the terms and length of the lease
contract?
D. What renovations will be needed and at what cost?
E. Describe the neighborhood (e.g., stable, changing,
improving, deteriorating).
F. What other kinds of businesses are in the
neighborhood?
G. How much can your business expand before you will
be forced to move or add on to the present building?
7. Licenses and Permits:
A. Is your business name registered with the secretary
of state?
B. State how you will be affected by local zoning
regulations.
C. What other licenses or permits will you be required
to obtain?
8. Management:
A. What is your business and management experience?
B. What education have you had, including both formal
and informal courses, that contributes to your management
abilities?
C. Are you physically suited to the job?
D. Do you have direct operational and/or management
experience in this type of business?
E. Describe your organizational structure and include
a brief description of who does what. (Include an
organizational chart if necessary.)
F. List proposed salaries and wages.
G. What other management resources will be available
(accountant, lawyer, SBDC)?
9. Personnel: Write a paragraph or two about your
personnel needs.
A. What are your anticipated personnel needs?
B. What skills must your employees have?
C. Can you use part-time help to meet changing
business volume?
D. Will you have to train people and at what cost?
10. Insurance: Describe your potential business
risks and tell what insurance coverage you will purchase to
protect yourself.
11. The Market: Generally explain who needs your
product or service and how you plan to reach them.
A. What is the present size and growth potential of
the market?
B. What percent of the market will you have now and in
the future?
C. Describe age, sex, occupation, life-style, income,
etc. of your various market segments.
D. How will you attract and keep your segment of the
market?
product quality price public relations personal selling
E. What features or services will you offer that will
justify your price?
F. How will you handle credit sales?
12. Competition: Briefly describe your competition
and tell how their operations are similar and dissimilar to
yours. What is your unique selling proposition and how will
you use it to control your market?
13. Financial Data:
A. Source and application of funds statement.
B. Capital equipment list.
C. Current balance sheet and income statement (less
than 90 days old).
D. Break-even analysis.
E. Projected income statement:
detail by month, first year detail by quarter, second year notes of explanation and assumptions
F. Cash flow projections
detail by month, first year detail by quarter, second year notes of explanation and assumptions
G. Projected balance sheet
H. For an existing business
14. Supporting Documents:
A. Personal resumes for all principals.
B. Personal financial statements for al principals.
C. Letters of reference.
D. Letters of intent from prospective suppliers or
customers.
E. Copies of all leases, contracts, or agreements,
deeds, or other legal documents.
F. Any other information that might help your case or
answer potential questions.
|
