The Executive Summary
Although first on the list and first in the plan, this will be the last section of the business plan that you write. Here you will give a brief overview of the entire operation and the service or product to be sold.
Identify your market, the management structure, and a brief synopsis of planned operations (how you will conduct your business). Summarize your overall financial projection; be clear and concise.
This paragraph will set the tone for your entire project, and it will be the "hook" that entices a lender or investor to continue reading the rest of the plan.
In this part of your plan, you should describe the history of this business as it relates to the general industry. If the business is not yet in operation, discuss how and why you got the idea and why it is a good business in which to be. You should include short-term (no more than a year) and long-term (2 - 5 years or more) goals, as well as your strategies for achieving those goals.
1. What is the history of your business.
2. Describe the type of industry your business will be in.
3. What is the outlook for your business? What projections are you making?
4. Clearly state your goals and your strategies for achieving them.
5. Is this business risky? What makes it so? How will you reduce the risk?
6. How will your business succeed in its particular setting?
Product or Service
Describe your product or service in terms that an "outsider" can understand. Include the uses and unique qualities of your product or service.
1. What, exactly, is your product or service?
2. What market niche will it fill?
3. How does this product or service differ from others currently available?
4. Does your product or service meet patent and/or licensing laws (if applicable), and does it meet state and local regulations (if applicable)?
5. Why will your customers buy your product or service?
If you have a unique product, check out this site:
- From patent to profit
To locate a manufacturer for your product, go here:
- Thomas Register
Describe how you plan to market your product or service. Talk about how you plan to advertise. What will your public relations strategy be? Include information about competitive pricing and your plan for selling your product or service. Provide sales forecasts for at least one year, and up to three years, if possible.
1. Who are your potential customers-include names and locations
2. How will you tap into the current market?
3. Explain your sales strategy-sales force and methods of distribution.
4. How do you plan to advertise? Discuss different media you plan to use and why, how often you plan to advertise with each medium, how each medium will reach your target market, and how much advertising will cost your company. Prepare an advertising schedule for your first year, as well as an advertising budget.
5. Identify the market niche you intend to capture and how you plan to do that, outside of paid advertising.
If you need to know more about marketing and why it is important, go to one of these sites:
- The 4 P's of Marketing
- Help for building your marketing plan
- Dictionary of marketing terms ry/index.html
- Manufacturers' Agents National Association
Market Research & Analysis
In this section of the plan, you will describe the general state of the industry you are entering, any trends in the industry, and what the potential is for the future of the industry. You will also identity and describe your target market and analyze the competition.
1. What geographic market will you serve? Tell why you chose a particular location.
2. Who will you sell your products and services to? Provide a profile of your targeted customer? What do they look like? What do they purchase? Where do they shop? How much money do they make? What is their family structure? What kinds of work do they do? How many of them are there?
3. Who are your competitors? Detail the differences between their products and services and your. What are their strengths and weaknesses? What are yours?
4. What portion of the market share does each competitor hold?
5. Describe your competitive advantage. How will you differentiate your products or services in order to remain competitive? Include a discussion of price, quality, range of products and services, innovativeness, etc.
6. Estimate what portion of the market share you can reasonably obtain.
Here are some links to help you learn about your customers:
Dun & Bradstreet
US Department of Commerce
CCH Business Owner's Toolkit
In this part of the plan, include the total operational details for your business.
1. Will you purchase products for resale, purchase parts and assemble, or manufacture? Define your general manufacturing operations, including the processes used to create your products and/or services.
2. Create a list of raw materials sources and/or inventory resources. Provide a list of vendors and suppliers.
3. Describe what special equipment will be needed, what it will cost, and where it can be obtained.
4. Will you operate in your home, lease space, or purchase a building? Detail why you chose this option and the costs involved.
5. How will you maintain and provide security for your equipment and facility?
6. Describe your plan for staffing your business, including how many employees will be needed and how they will be recruited and selected. How will you train new employees? What will it cost you to pay employee wages and benefits?
7. Describe your policies for extending and recovering credit.
8. What warranties will be extended? What are your sales and service policies?
For forms, agreements, contracts, etc., try these sites:
CCH Business Owner's Toolkit
American Express Small Business
In this section describe the legal structure of the business and who will lead and manage the business.
1. Will you operate as a sole proprietor, partnership, or corporation?
2. Who are the owners and managers? What relevant experience do they bring to the business? Why and how will they make the business a successful one? Provide resumes for key leaders and managers.
3. How will owners and managers be compensated?
4. Provide an organizational chart for your business.
5. Who will handle the bookkeeping and tax preparation?
6. Have you selected a team of professional advisors (attorney, CPA, lender, mentor, etc.)? List them, and explain what they will be doing for your business.
For information on how to handle employment and employees, contact:
- NC Employment Security Commission - 919.733.7166
- NC Department of Labor Health & Safety Division - 919.733.7166
- US Department of Labor
In this section of the plan you will provide financial documents to support your plan and provide a realistic picture of the financial future of your business. Include a summary of the funds needed to start the business, sources and uses of funds, payment terms, and collateral available to secure the loan. Be sure to include any personal investment you will be making in the business.
1. Provide a list of start-up expenses for the business
2. Provide personal financial statements of the owners.
3. Include a statement of the Sources of Capital.
4. Provide sales projections for three years.
5. Provide projected cash flow statements for three years.
6. Provide projected profit and loss statements for three years.
7. Provide an "opening day" balance sheet.
For forms, financial templates, and calculators, try one of these sites:
The appendix will include any supporting documents for your business plan.
1. Resumes of owners and key employees
2. Lease agreement
3. Store or plant layout
4. Capital equipment list
5. Maps showing business location and market information
6. Photos of products, equipment, etc.
7. Supporting charts and graphs
8. Relevant articles to support industry trends
9. Legal documents such as patents, trademarks, registered copyrights, license to manufacture, etc.
10. Letters of commitment or intent from suppliers and potential customers
Once you've completed your business plan, I recommend that you type it. Typing it or using a word processing program shows that you are professional and that you mean business.
Being neat also has its advantages if you will use this document to help you get money for your business. Remember, you want to use this plan to communicate your ideas and aspirations to other people.
Before making that trip down to the bank, run the plan past some friendly eyes first. Take it to your local community college's Small Business Center where they can read it and make suggestions. This is typically a free service, and the advice and counsel you can get there will be extremely valuable.
The same can be said for the Small Business Administration, although these offices are more sparsely scattered than local community colleges.
In addition to these free services, the UNC system has a Small Business Technology Development Center (SBTDC) office on each campus. These offices deal primarily with high-growth, high-impact businesses, and their services are also free.
You could also take your plan to your attorney and/or accountant, a friend who has a business, a professor or business instructor at a local college, or even the director of your local chamber of commerce. Not all of these services will be free of charge, but the point is to have someone give your plan a look.
Before approaching a banker or other potential lender or investor, you want to get an outsider's view of your plan. This will help you polish it and make it more attractive.
Once you're confident that your plan will work (i.e. make money), then it's time to put on your best duds and make a trip to the bank.
To start creating your support team, start with these links:
For assistance in locating an attorney in your area, call the NC Bar Association Lawyer Referral Service at 800.662.7660
To contact an insurance agent who can help you determine the most appropriate type of coverage for your business, check with your current insurance provider, the yellow pages, or contact the NC Association of Independent Insurance Agents at 919.828.4371 or the NC Department of Insurance at 800.662.7777
You should not consider any of the information contained on this site to be legal advice.
The information herein is good stuff, and while I make no guarantee that following this advice will make a lender fall at your feet or cause your business to be wildly successful, doing the things suggested here and writing a solid business plan WILL improve your chances.
There is nothing commercial about this website. I don't do this to make money. I get no financial consideration from any company or organization this site links to. I do this because I love small businesses and small business owners. It takes guts--real guts--to do what you are wanting to do! I admire that.
I want to see every small business started in North Carolina beat the odds and celebrate their 10th anniversaries.
Just be sure to invite me to the celebration! That will be compensation enough.