Developing a Business PlanDonovan Reed, EVP – Chief Lending Officer
To start a new business or obtain additional capital through an investor or loan, you need to develop a business plan. If you’ve never created a business plan, it may seem like a daunting task. But it is an important step to ensure that you have thought through all the details concerning your business.
Following is an outline containing critical content for your business plan, plus tips for creating each section. While content can be developed in any order, remember to present it in a way that makes the best impression on investors and lenders.
- Executive Summary
This summarizes all of the details presented in your business plan and makes the case for your business. Summarize the problem you are solving for consumers, list your target customers and provide financial highlights. Be brief, but make your case. This is often the first and maybe the only section that will be read by decision-makers. It can be the difference between the trash pile and the “I’d like to learn more” pile, so make it the best you can.
- Company Description
Provide an overview of the company, including the type of company structure, the state in which your company is registered, patent or trademark information and any other basics regarding the formation of the company.
Describe the problem and the solution that you are providing. Present this section from the customer’s point of view. How you are meeting their needs and solving their problems. How is your product/service different than other available options?
- Product Detail
If your business is based on a specific product, then you may want to provide additional details regarding the product itself, such as how your product will be made, who will provide materials and any mechanical specifications.
- Market Analysis
Detail your target audience and how it can be reached. Describe the potential market for your product/service. Outline your strengths and weaknesses versus your competition. Create a SWOT analysis for a clear view of each competitor.
- Operating Plan
Outline the mechanics of your business and how you intend to operate. Include details concerning marketing, sales, management, distribution and any other operational information.
Describe the leadership of your business, your organizational structure and information regarding an advisory board or board of directors, if applicable. It is important to include overviews of key managers’ past work history, including their job functions. This section will help shed light on who is behind the success of the company.
- Financial Plan
Outline your forecasted cash flows, and profit and loss. Since these are forecasted numbers, it is important to clearly state your assumptions, where needed. You also may want to include a balance sheet, sales forecast, business ratios or breakeven analysis. If yours is a startup business, include details concerning startup expenses and capitalization.
If not already included in the market analysis or operating plan, provide details concerning your pricing strategy.
Include an appendix with details and supporting materials for items referenced throughout the plan, which may include copies of patent/trademarks, market studies, tax returns (if an existing business), copies of leases or other contracts and sample marketing materials. If you are applying for a loan, include the credit application from your lender.
Oklahoma State Bank is one of the top SBA loan originators in Oklahoma. If your business needs capital, contact Donavan Reed today at firstname.lastname@example.org for personal guidance through the business loan or SBA loan process.
Other useful resources:
For a business plan booklet from Ernst and Young: http://www.amazon.com/Ernst-Young-Business-Plan-Guide/dp/0470112697
For a business plan of 6-12 pages, see: http://www.rogercohen.com/business_plan_outline.pdf
For sample business plans, see: http://www.bplans.com/sample_business_plans.cfm