The Younger Law Blog

Business Plan Tips

What is a business plan?

A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals. Source: U.S. Small Business Administration What goes in a business plan? The body of a business can be divided into four distinct sections: 1) Description of the business 2) Marketing 3) Finances 4) Management Addenda should include an executive summary, supporting documents, and financial projections. Parts of a Business Plan

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: 1. Cover sheet 2. Statement of purpose 3. Table of contents

  1. I. The Business

  2. A. Description of business B. Marketing C. Competition D. Operating procedures E. Personnel F. Business insurance

II. Financial Data

  1. A. Loan applications B. Capital equipment and supply list C. Balance sheet D. Breakeven analysis E. Pro-forma income projections (profit & loss statements)

  2. a. Three-year summary b. Detail by month, first year c. Detail by quarters, second and third years d. Assumptions upon which projections were based F. Pro-forma cash flow

III. 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. Source: U.S. Small Business Administration External resources Business Plan Basics | SBA Develop a Dynamic Business Plan | Essential Elements of a Good Business Plan for Growing Companies | SBA