What's in a Business Plan?
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- Funding Request – This is the section when you'll be requesting funding for the business. If you are not seeking outside funds right now, you can leave this section out. You might consider using it instead to look at when you might need funding and how much it will take to grow your business in the future, along with the possible sources you could consider for securing your funds. Then, update this section when you actually need outside funding for additional research and development, manufacturing, equipment, facilities, staffing, etc.
- Financial Data – Your balance sheet, a breakeven analysis, an income statement and a statement of cash flows. You will most likely need an accountant to prepare these statements correctly, if they haven't been prepared already. You'll want to include both historical financial statements and forward-looking financial statements.
- Appendix – Contains supporting information, such as resumes, details of market research findings, estimates, and all other documentation required to support what's contained in the body of the business plan.
Can I Write the Business Plan Myself?
The answer to this question depends on two key factors:- Is the business plan for internal use or external use? If you merely want to create a roadmap for yourself you probably don't need to hire a professional to create it for you. If you're trying to secure outside funding, you may want to consider hiring a professional to create the plan for you or, at the very least, to review the plan to make sure your bases are properly covered. Additionally, the document needs to be edited and proofread for grammar and good sentence structure. A well-written plan can increase your chances for success in getting funding.
- How are your writing skills? If you're a good writer you can probably handle the task yourself, at least with some assistance. Software and samples are available to help you prepare your own business plan. Additionally, the SBA is a terrific resource for guiding you through the process. If you haven't already, you'll want to take their online Develop a Business Plan Workshop to get started. You'll find that the outline presented in this course varies from what the SBA now recommends on their website, but the information contained within the plan is the same. You will still benefit from having someone else read through your plan and you may still need outside assistance, such as a CPA to create your financial documents and/or a market research firm to develop statistics about your markets.
The added benefit is that the more accurate information you can provide, the lower the cost of having the business plan prepared professionally.
What Happens Once the Business Plan is Written?
Your business plan is a valuable reference. Therefore, it needs to be a living document.
As you operate and grow your business, it's nearly certain that you will make adjustments to how you do business, make decisions on which additional products or services to offer and/or which to discontinue, change how you market or distribute your products or services, and discover ways to improve how your business is run.
Keeping your business plan current offers some important benefits, such as:
- If you ever need to apply for additional funding through either SBA loan programs or other sources of private funding, up-to-date information will already be available. When it comes time to submit an updated plan, you'll save time and money.
- It forces you to revisit the document, which helps keep you focused on what's important to the success of your business.
How Often Should I Update My Business Plan?
You can either update your business plan on a schedule, such as quarterly or twice annually, or you can update it on a real-time basis – as changes occur.Keeping your business plan updated in real time may seem like a nuisance, but it's really ideal. It allows you to act quickly when you need funding or if you need to sell your business and it makes your business plan more useful as a roadmap because it keeps you on top of things at all times. And that's where you need to be to improve the chances that your home business will succeed and grow. Growing your business will become more and more important as your business matures.
Participate in the Poll
Poll: Do You Have a Formal Business Plan?
- I have a formal business plan that I created
- I have a formal business plan created by others
- I don't have a formal business plan yet, but I'm working on one now
- I don't have a formal business plan yet, but I'll probably prepare one in the future
- I don't have a formal business and I don't plan to create one
Discuss Business Plans in the Forum
For those of you who would like to go into a bit more detail or voice your ideas, suggestions or frustrations, I welcome you to participate in the discussion on this topic in the About Home Business Forum.
