INTRODUCTION: This page provides information on financial and business topics and other areas of interest to the investors.

Business Plan

A business plan is a written document that describes the future path of a business. A good business plan explains the business concept, summarizes the objectives of the business, identifies the resources in both money and people that will be needed by the business. A business plan also, describes how those resources will be obtained, and why the business will succeed.

A Business plan can have different styles, but the following is common to most plans:

An Executive Summary which summarizes key points of the business plan in one or two pages;
an overview which introduces the reader to the business;
a description of the products and services;
an overview of the industry in which the business will compete;
a marketing strategy which summarizes the product, promotion, pricing, and distribution strategies of the business;
a description of the management and staff;
an implementation plan; and a financial plan which includes pro-forma balance sheets, income statements and cash flow statements.

A balance sheet compares your assets with what is owed, and is a snapshot of your business at a point in time.
A cash flow statement compares money coming into business with money going out of the business.
An income statement compares your revenues to your expenses to decide if the business is going to make a profit or loss.

Business plans can vary in length from a few pages to over 100 pages.

Preferably business plans should be between 10 pages and 25 pages in length,since it is a business summary. Additionanl information can always be provided on request or you can attach more detailed background documents to your business plan.

Is it important to have a business Plan?
All businesses must prepare a business plan. The following are benefits in preparing a good business plan:
The process of preparing a business plan will force you to think about your business, research some options, recognize opportunities and risks, and test some of your assumptions;
a business plan will help you identify the cash needs of your business;
a business plan can be used to raise funding from banks and from investors;
a business plan can be used to tell employees, investors and others about your plans and strategies; and
a business plan provides a benchmark against which to compare the progress and performance of your business.

It is a good idea for all businesses to prepare and regularly update their business plans. However, small businesses are most likely to prepare a business plan when they are just starting up or when a major change in their business is occurring (and often when additional investment or a loan is needed).

The following will act as a guide for preparing a good business plan:

1. Define your objectives for producing the business plan. Who is going to read the plan and what do you want them to do? The objectives can help you decide how much emphasis to put on various sections of the business plan.

2. Allocate enough time and resources to thoroughly research your business plan. A business plan is only as good as the research that went into producing it. For example, you will have to do research in order to find out more about your industry, your potential customers, your potential competitors, and your potential sales and costs.

3. Show drafts of your business plan to others. It can be very useful to get feedback on your draft business plan from various people, including both people associated with the business and others.

4. Write your own business plan. One common mistake made by entrepreneurs is to borrow heavily from a sample business plan and simply change the names and some of the numbers. There are two big problems with this approach. First, the emphasis you place on various sections of the business plan must reflect what is important in your particular business. Second, a good business plan should flow together like a good story,with the sections working together to demonstrate why the business will be successful. Business plans which borrow too heavily from other business plans tend to be disjointed, with some sections contradicting others and some key issues left unaddressed.

5. Outline the key points you want to make in each section before you start writing. Review your outline to ensure that your sections are consistent with each other,that there is little duplication, and that all the key issues have been addressed.

6. Make sure your financial projections are believable. For many readers, the financial section is the most important section of the business plan because it identifies your financing needs and shows the profit potential of your business. In addition, a good financial plan will give the reader confidence that you really understand your business. So be sure to test the reasonableness of each of your assumptions. Overly optimistic assumptions or a failure to accurately reflect the full costs of operation can quickly destroy the credibility of your business plan.

7. Do the Executive Summary last. The executive Summary can be the most important section of your business plan because people will read it first and it may be the only section they read. The keys to a good executive summary are that it should be short (2 pages at most), it should highlight what is important in your plan, and it should get the reader excited about your business.

Financial Plan

12-month Profit and Loss Projection
Cash Flow Projection
A Projected Balance Sheet
Breakeven Calculation
Four-Year Profit and Loss Projection

A marketing plan is less defined and less accepted than a business plan. A marketing plan suggest how to develop tactics and strategy, how to focus on key elements, analyze and research the market, project sales and build a budget, so that you can create a plan and implement it. In other words a marketing plan describes current situation, strategy, and provides an outline on how to accomplish desired results.

To view professionally develop marketing plans, click on Marketing Plans.