Why You Should Have a Business Plan

Business PlanA business plan helps you know where you want to go and determine how you are going to get to there in the next 3-5 years.  Things to include in your business plan should be:

  1. Mission Statement:  The purpose of why your business exists.
  2. Company Information:  When the business began, names of owners/officers, how many employees, business locations, industry, etc.  What competitive advantage do you have?
  3. Target Audience:  Who is your market?  What are their needs?  Where are they located?
  4. Your products and/or services:  How does what you sell meet the needs of your target market?
  5. Future Plans:  What do you see the business doing in the coming years?  Will you be offering a new product/service or opening a new location?
  6. Industry Outlook:  What is currently happening in your field?  What is the historic rate of growth and what are the current trends in your industry?
  7. Pricing Structure:  How do you charge for your services and what is your profit margin?
  8. Marketing Strategy – How do you make the public aware of your products/services?  How do you get your products to your customers?
  9. Regulatory Restrictions:  What are the restrictions in your industry and what are the costs associated with the compliance?
  10. Board Members Qualifications:  If applicable, give names and qualifications of board members who offer advice to the company.
  11. Financial Projections: Based on the information about your market, your product and profit margin, distribution, etc, what are your expected revenues?  Use historical information as well as projected information to explain your figures.

If using the business plan for the purposed of gaining funding, make sure you include a section that explains your financial needs.  This section should explain your current needs as well as what you foresee over the next 3-5 years.  Explain how you intend to use the funds you receive (purchase equipment, use for working capital, pay off debt, etc).  Include in this section how long the term of the loan would be and your plan for re-paying the debt.
If you need help with creating a business plan, contact your local SCORE office.  This organization offers free mentoring to entrepreneurs on many different topics including writing a business plan.  To find a local office, see http://www.score.org/chapters-map.

Having a formal business plan will put your ideas in writing, give you an established plan for you business, and help guide you on the road to success.