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| *Ostroff, Fair and Company>>>Small Business |
What are the main components to consider when writing a business plan? |
What are the main components to consider when writing a business plan? When putting together a business plan, several factors need to be addressed. First, you need to identify the proposed officers of the company. Depending on whether you establish as a sole proprietorship, an S-Corp, an LLC, or a C-Corp, there may be different requirements regarding how many officers are required or who they should be. My friend found that in order to pay himself as a 1099 employee, that he could not be an officer of his own company, so sometimes there is benefit in having the officer be someone other than the owner, especially if the owner wants to receive 1099 pay. You will need to identify the costs to establish the firm, as well as a proposal of where the money is coming from to establish the initial pool of money. The initial startup pool should cover not just the initial startup costs, but enough cash to get the company off the ground (which could be the first 6-12 months, or more, depending). Most lenders will expect that about half of the money come from the initial investor(s). You will also need to describe the business that you are proposing, including what your purpose/goal is in existence, as well as what products you will be selling, and why this is a viable firm. When I last did one of these, we got down to a very specific level on the products, their costs, and anticipated prices, and we added that as an appendix to the business proposal in case someone wanted to see it, but left the text more generic within the proposal. You should put together a pro-forma income statement, cash flow statement, and balance sheets to support the business that you are proposing. This can be a little tedious and may require the assistance of an accountant to do it right. You should identify your target market(s), your geographical coverage (internet business could be defined as global), whether you will have a brick and mortar storefront or not, etc. Basically, how you will do business and who you will be doing it with. You do not have to be specific to the exact location by street address, or by hosting service, but you need to have some general description of the business itself that enables someone reading the plan to understand what your intent is. There are many books available that can detail out what you need to do to establish a business. I would recommend trying to find one specific to your geography that can walk you through some of the planning. What is your product or service going to be? What is the market for this product or service? How are you going to market it? Who are the major principals in the company? What strengths will they provide to the company? Who are your major competitors? How do you plan to finance the company? What are your projected financials (income statement and cash flow) for the next 5 years? |
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