Nirav B Patel Hoboken - How to setup and grow a Business

HOW TO SETUP AND GROW A BUSINESS
Nirav B Patel Hoboken

BUSINESS PLAN
 WHAT IS A BUSINESS PLAN ?
 WHY A BUSINESS PLAN IS IMPORTANT?
 WHAT IS THERE IN A BUSINESS PLAN?
 HOW TO CREATE AN EFFECTIVE BUSINESS PLAN?

BEFORE WRITING YOUR BUSINESS
GETTING STARTED
 THINK ABOUT THE BUSINESS IDEA YOU CAME UP
 IF YOU WERE TO START THIS BUSINESS, WHERE DO YOU THINK IT WOULD BE IN
ONE YEAR? FIVE YEARS? TEN YEARS?
 MAKE A LIST OF PLACES AND PEOPLE YOU THINK YOU COULD CONSULT FOR
ASSISTANCE IN DEVELOPING YOUR BUSINESS IDEA.

PROJECT PROCESS
 EXPLAIN WHY THERE IS A MARKET/NEED FOR YOUR PRODUCT OR SERVICE.
o Survey five or more people to learn how many show interest in it?
o Prepare a one page report describing your product or service and what makes it
unique.
 LIST YOUR SHORT-, MEDIUM-, AND LONG-TERM GOALS. WHAT STEPS DO YOU
NEED TO TAKE TO ACHIEVE EACH OF THESE GOALS?

PROJECT PROCESS CONTD.
 BEGIN THE FINANCIAL SECTION OF YOUR BUSINESS PLAN BY WRITING A REPORT
THAT IDENTIFIES THE RISKS YOUR BUSINESS FACES. FOR EACH RISK, EXPLAIN HOW
YOU WILL OVERCOME THE PROBLEM.
 CONTACT SIDBI, SIDCS, OR A VOLUNTEER TO GET INFORMATION FOR YOUR
TYPE OF BUSINESS.
 WRITE ABOUT THE INDUSTRY IN WHICH YOU WILL BE COMPETING.

WHAT IS A BUSINESS PLAN?
THE BUSINESS PLAN
 DESCRIBES
o what your business will produce
o how you will produce it
o who will buy your product or service
 EXPLAINS
o who will run your business
o who will supply it with goods

WHAT IS A BUSINESS PLAN? CONTD.
 STATES
o how your business will win over customers from competitors
o what your business will do to keep customers
 PROVIDES
o detailed financial information that shows how your business will
succeed in earning a profit

WHAT IS A BUSINESS PLAN? CONTD.
THE BUSINESS PLAN SERVES THREE IMPORTANT PURPOSES.
1. A BUSINESS PLAN EXPLAINS THE IDEA BEHIND YOUR BUSINESS AND SPELLS OUT HOW YOUR
PRODUCT OR SERVICE WILL BE PRODUCED OR SOLD. TO CONVINCE INVESTORS THAT YOUR
BUSINESS IDEA IS SOLID, YOU WILL NEED A COMPLETELY NEW PRODUCT OR SERVICE OR ONE
THAT IS BETTER OR LESS EXPENSIVE THAN PRODUCTS OR SERVICES THAT ALREADY EXIST. YOU
WILL NEED TO IDENTIFY WHO YOUR TARGET CUSTOMER IS AND SHOW HOW YOUR COMPANY
WILL BE ABLE TO OBTAIN AND KEEP CUSTOMERS.
2. A BUSINESS PLAN SETS SPECIFIC OBJECTIVES AND DESCRIBES HOW YOUR BUSINESS EXPECTS
TO ACHIEVE THEM. A GOOD BUSINESS PLAN INCLUDES SALES PROJECTIONS FOR THE SHORT
TERM (THE FIRST YEAR), THE MEDIUM TERM (TWO TO FIVE YEARS AFTER START-UP), AND THE
LONG TERM (FI VE YEARS IN THE FUTURE). IT DESCRIBES WHAT PRODUCTS AND SERVICES WILL
BE INTRODUCED OVER THE NEXT FIVE YEARS AND SETS FORTH FUTURE BUSINESS PLANS, SUCH
AS EXPANSION OF THE BUSINESS.
3. A BUSINESS PLAN DESCRIBES THE BACKGROUNDS AND EXPERIENCE OF THE PEOPLE WHO
WILL BE RUNNING THE BUSINESS. BANKS AND OTHER LENDERS MAKE FINANCING DECISIONS
BASED ON HOW WELL THEY THINK A COMPANY CAN MEET ITS OBJECTIVES. IF YOU PROVIDE
INFORMATION ON THE BACKGROUND AND EXPERIENCE OF THE PEOPLE WHO WILL BE
RUNNING YOUR COMPANY, THE BANK OR INVESTOR WILL BE MORE LIKELY TO INVEST MONEY IN
YOUR BUSINESS.

WHY A BUSINESS PLAN IS IMPORTANT? PURPOSE OF A BUSINESS PLAN
 A BUSINESS PLAN IS A WRITTEN DOCUMENT THAT DESCRIBES ALL THE STEPS NECESSARY
TO OPEN AND OPERATE A SUCCESSFUL BUSINESS.
o IN OTHER WORDS, IT EXAMINES THE VIABILITY OF A BUSINESS.

WHY A BUSINESS PLAN IS IMPORTANT? PURPOSE OF A BUSINESS PLAN CONTD.
 WRITING OUT THESE DETAILS WILL HELP YOU VISUALIZE ALL THE ASPECTS OF YOUR
BUSINESS.
 A SOLID BUSINESS PLAN IS CRITICAL IT WILL ALSO HELP YOU CONVINCE BANKS AND
OTHER PEOPLE TO INVEST IN YOUR BUSINESS IDEA.

WHY A BUSINESS PLAN IS IMPORTANT? PURPOSE OF A BUSINESS PLAN CONTD.
 IT SERVES AS A TOOL FOR MANAGING YOUR BUSINESS. ONCE YOUR BUSINESS IS UP
AND RUNNING, YOU CAN USE THE BUSINESS PLAN IN YOUR DECISION MAKING.
 IT ACTS AS A GUIDE FOR BUSINESS OPERATIONS. IT CAN ALSO BE USED TO TRACK
WHETHER YOUR BUSINESS IS DEVELOPING ACCORDING TO PLAN.

WHAT GOES IS THERE IN A BUSINESS PLAN?
THE MAIN BODY OF THE BUSINESS PLAN WILL CONTAIN THE BULK OF THE INFORMATION
ABOUT THE BUSINESS IDEA. IT PROVIDES DETAILS ON HOW THE BUSINESS WILL SUCCEED.
DETAILS FROM THE MAIN BODY WILL BE USED TO COMPILE THE OTHER COMPONENTS IN
THE BUSINESS PLAN.
BASIC ELEMENTS OF A BUSINESS PLAN SHOULD BE ORGANIZED INTO FIVE SECTIONS.
 Introduction
 Marketing
 Financial Management
 Operations
 Concluding Statement

INTRODUCTION
THE INTRODUCTION SECTION OF A BUSINESS PLAN CONTAINS MANY IMPORTANT DETAILS
ABOUT THE PROPOSED BUSINESS IDEA.
THE FOLLOWING INFORMATION SHOULD BE INCLUDED IN THE INTRODUCTION SECTION.
 A detailed description of the business and its goals
 The ownership of the business and the legal structure
 The skills and experience you bring to the business
 The advantages you and your business have over your
competitors

INTRODUCTION CONTD.
DETAILED DESCRIPTION
THIS SECTION DESCRIBES YOUR VISION FOR THE COMPANY’S FUTURE. STATING GOALS WILL
HELP PROVIDE YOU WITH DIRECTION AND FOCUS FOR YOUR BUSINESS ACTIVITIES.
 What inspired the idea for your business.
 What your business is about.
 How you came up with your idea.
 How it can help lenders, investors, and others
 Goal setting vis-à-vis your short-term (three months to one year), medium-term
(two to five years), and long-term (more than five years) goals.

INTRODUCTION CONTD.
DETAILED DESCRIPTION
THIS SECTION DESCRIBES YOUR VISION FOR THE COMPANY’S FUTURE. STATING GOALS WILL
HELP PROVIDE YOU WITH DIRECTION AND FOCUS FOR YOUR BUSINESS ACTIVITIES.
 What inspired the idea for your business.
 what your business is about.
 How you came up with your idea.
 How it can help lenders, investors, and others
 Goal setting vis-à-vis your short-term (three months to one year), medium-term
(two to five years), and long-term (more than five years) goals.

INTRODUCTION CONTD.
OWNERSHIP AND LEGAL STRUCTURE
IN YOUR BUSINESS, YOU SHOULD HAVE A SECTION DETAILING YOUR FORM OF OWNERSHIP.
IT MUST PROVIDE INFORMATION RELEVANT TO YOUR FORM OF BUSINESS, SUCH AS WHO
YOUR PARTNERS ARE OR HOW MANY SHAREHOLDERS YOU HAVE.
 SOLE PROPRIETORSHIP (ONE OWNER)
 OR PARTNERSHIP (TWO OR MORE OWNERS)
 OR CORPORATION (MANY OWNERS THAT HOLD SHARES OF STOCK IN THE BUSINESS)

INTRODUCTION CONTD.
SKILLS AND EXPERIENCE
A WRITTEN SUMMARY OF YOUR EXPERIENCE IS AN ESSENTIAL PART OF YOUR BUSINESS
PLAN.
 THIS SUMMARY SHOULD EMPHASIZE ALL EXPERIENCE YOU HAVE THAT RELATES TO
THE BUSINESS, INCLUDING PAID WORK EXPERIENCE, VOLUNTEER EXPERIENCE, AND
ANY HOBBIES YOU HAVE THAT RELATE TO YOUR PROPOSED BUSINESS.
 THE SKILLS AND EXPERIENCE OF ANY MANAGERS OR PROFESSIONAL EMPLOYEES
WHO WILL BE HIRED WILL ALSO BE RELEVANT.

INTRODUCTION CONTD.
COMPETITIVE ADVANTAGES
YOU SHOULD LIST YOUR COMPANY’S ADVANTAGES OVER THE COMPETITION.
THESE ADVANTAGES MAY INCLUDE THE FOLLOWING.
• Reliability
• Public image or reputation
• Distribution
• Performance
• Price
• Quality
• Promotion

MARKETING
THE MARKETING SECTION OF YOUR BUSINESS PLAN SHOULD DESCRIBE THE
 products and/or services you will offer,
 the market,
 the industry,
 your location.

MARKETING CONTD.
PRODUCTS AND SERVICES
 DESCRIBE THE PRODUCTS OR SERVICES AND EXPLAIN HOW THEY DIFFER FROM THOSE
ALREADY ON THE MARKET.
 HIGHLIGHT ANY UNIQUE FEATURES OF YOUR PRODUCTS OR SERVICES,
 EXPLAIN THE BENEFITS CUSTOMERS WILL RECEIVE BY PURCHASING FROM YOUR
COMPANY.

MARKET
YOU WILL EXPLAIN
 WHO YOUR PROSPECTIVE CUSTOMERS ARE,
 HOW LARGE THE MARKET IS FOR YOUR PRODUCT OR SERVICE,
 HOW YOU PLAN TO ENTER THAT MARKET.

INDUSTRY
YOU SHOULD DESCRIBE THE INDUSTRY IN WHICH YOU WILL OPERATE. TO FIND THIS
INFORMATION, YOU WILL NEED TO CONDUCT RESEARCH. THINGS YOU SHOULD INCLUDE
THIS SECTION ARE
 External factors affecting your business, such as high competition or a lack
certain suppliers
 Growth potential of the industry, including growth forecasts
 Economic trends of the industry
 Technology trends that may affect the industry
WHEN PROVIDING INFORMATION ON THE INDUSTRY IN WHICH THEY WILL OPERATE, NORA
AND SAMANTHA INCLUDE POPULATION DATA FOR THEIR AREA. THIS INFORMATION SHOWS
THAT DEMAND FOR THEIR SERVICE COULD GROW OVER TIME.

INDUSTRY
WHEN PROVIDING INFORMATION ON THE INDUSTRY IN WHICH THEY WILL OPERATE, NORA
AND SAMANTHA INCLUDE POPULATION DATA FOR THEIR AREA. THIS INFORMATION SHOWS
THAT DEMAND FOR THEIR SERVICE COULD GROW OVER TIME.

LOCATION
 Describe the location of your business.
 Lenders want to know exactly where your business will be because the
location is often a critical factor in its success.

FINANCIAL MANAGEMENT
THE FINANCIAL SECTION OF YOUR BUSINESS PLAN WILL HELP DETERMINE YOUR
FINANCIAL NEEDS. IT FORCES YOU TO LOOK AT FINANCIAL RISKS AND THE COSTS AND
EXPENSES OF RUNNING YOUR BUSINESS.
IT CONSISTS OF THREE ELEMENTS.
 IDENTIFICATION OF RISKS
 FINANCIAL STATEMENTS
 3. FUNDING REQUEST AND RETURN ON INVESTMENT

FINANCIAL MANAGEMENT
IDENTIFICATION OF RISKS
 PROSPECTIVE LENDERS AND INVESTORS WILL WANT TO KNOW WHAT RISKS YOUR
BUSINESS FACES AND HOW YOU PLAN TO DEAL WITH THEM. DO NOT BE AFRAID TO LIST
POTENTIAL PROBLEMS.
 LENDERS KNOW THAT EVERY BUSINESS FACES RISKS. THEY WILL BE REASSURED TO SEE
THAT YOU HAVE CLEARLY THOUGHT THROUGH THE POTENTIAL PROBLEMS AND HAVE A
PLAN FOR DEALING WITH THEM.
 RISKS TYPICALLY FACED BY NEW BUSINESSES INCLUDE COMPETITORS CUTTING PRICES,
COSTS EXCEEDING PROJECTIONS, AND DEMAND FOR YOUR PRODUCT OR SERVICE
DECLINING.

FINANCIAL STATEMENTS
 Financial statements are prepared to reflect
o financial performance (a statement about revenue and expenses ) of the business
o and financial position (a statement of assets and liabilities ) of the business
 A new business must include projected (estimated) financial statements in its
business plan

FUNDING REQUEST AND RETURN ON INVESTMENT
 YOU MUST INDICATE HOW MUCH YOU NEED TO BORROW AND HOW YOU PLAN TO USE
THE MONEY.
 YOU SHOULD GIVE INVESTORS AN IDEA OF HOW MUCH MONEY THEY COULD EXPECT TO
EARN ON THEIR INVESTMENT IN YOUR BUSINESS.
 YOU SHOULD STATE HOW MUCH MONEY YOU ARE PERSONALLY INVESTING AND PROVIDE
A PERSONAL FINANCIAL STATEMENT.

OPERATIONS
THE OPERATION OF YOUR COMPANY IS CRITICAL TO ITS SUCCESS. YOU SHOULD EXPLAIN
HOW THE BUSINESS WILL BE MANAGED ON A DAY-TO-DAY BASIS
 YOU SHOULD DISCUSS HIRING AND PERSONNEL PROCEDURES
 YOU SHOULD ALSO INCLUDE INFORMATION ON INSURANCE AND LEASE OR RENTAL
AGREEMENTS.
 YOU MUST DESCRIBE THE EQUIPMENT THAT WILL BE NECESSARY FOR PRODUCTION OF
YOUR PRODUCTS OR SERVICES, AND HOW THE PRODUCTS OR SERVICES WILL BE
PRODUCED AND DELIVERED.
 YOU CAN DEVOTE A SECTION TO HEALTH AND SAFETY AND OUTLINE PLANS FOR
DEALING WITH EMERGENCIES.

CONCLUDING STATEMENT
 IN THIS SECTION, YOU SHOULD SUMMARIZE THE GOALS AND OBJECTIVES YOU HAVE
FOR YOUR BUSINESS.
 YOU SHOULD ALSO EMPHASIZE YOUR COMMITMENT TO THE SUCCESS OF THE
BUSINESS.

COMPLETE THE BUSINESS PLAN
AFTER YOU HAVE COMPLETED THE MAIN BODY OF YOUR BUSINESS PLAN, YOU WILL NEED
FOCUS YOUR EFFORTS ON THE OTHER COMPONENTS—THE INTRODUCTORY ELEMENTS AND
THE APPENDIX.
THEN YOU MUST PULL ALL THE COMPONENTS TOGETHER INTO A WELL-ORGANIZED,
ATTRACTIVE DOCUMENT.

COMPLETE THE BUSINESS PLAN
INTRODUCTORY ELEMENTS
EVERY BUSINESS PLAN SHOULD BEGIN WITH
 a cover letter
 a title page
 a table of contents
 a statement of purpose
 an executive summary

COVER LETTER
A LETTER THAT INTRODUCES AND EXPLAINS AN ACCOMPANYING DOCUMENT OR SET
OF DOCUMENTS IS CALLED A COVER LETTER.
THE COVER LETTER FOR YOUR BUSINESS PLAN SHOULD INCLUDE YOUR NAME, THE
NAME OF YOUR BUSINESS, AND YOUR ADDRESS AND TELEPHONE NUMBER.
 IT SHOULD BRIEFLY DESCRIBE YOUR BUSINESS AND ITS POTENTIAL FOR SUCCESS.
 IT ALSO NEEDS TO TELL THE READER HOW MUCH CAPITAL YOU NEED.

TITLE PAGE
YOUR BUSINESS PLAN SHOULD HAVE A TITLE PAGE THAT INDICATES
 the name of your company,
 the current date,
 the owner of the company,
 the title of the owner,
 the address and phone number of the company

TABLE OF CONTENTS
 A TABLE OF CONTENTS IS A LISTING OF THE MATERIAL INCLUDED IN A PUBLICATION.
 IT SHOWS THE READER WHAT EACH PAGE COVERS.
 IT IS SIMILAR TO A TABLE OF CONTENTS IN A TEXTBOOK.
NOTE: IT IS IMPORTANT THAT YOUR TABLE OF CONTENTS IS ACCURATE, SO MAKE SURE THE
SECTIONS ARE LISTED IN THE PROPER ORDER AND THE GIVEN PAGE NUMBERS ARE
CORRECT.

STATEMENT OF PURPOSE
A BRIEF EXPLANATION OF WHY YOU ARE ASKING FOR A LOAN AND WHAT YOU PLAN TO DO
WITH THE MONEY IS CALLED A STATEMENT OF PURPOSE.

IT SHOULD BE NO MORE THAN ONE OR TWO PARAGRAPHS. NORA AND
SAMANTHA WRITE THE STATEMENT OF PURPOSE SHOWN HERE.

EXECUTIVE SUMMARY
BEFORE GETTING INTO THE DETAIL OF THE MAIN BODY OF THE BUSINESS PLAN, READERS WILL WANT
TO READ AN EXECUTIVE SUMMARY.
AN EXECUTIVE SUMMARY IS A SHORT RESTATEMENT OF THE REPORT. IT SHOULD CAPTURE THE INTEREST
OF ITS READERS AND MAKE THEM WANT TO READ MORE.
IF THE EXECUTIVE SUMMARY IS UNCONVINCING, A LENDER MAY DECIDE NOT TO READ YOUR ENTIRE
BUSINESS PLAN
THE EXECUTIVE SUMMARY SHOULD BE NO LONGER THAN ONE OR TWO PAGES, AND IT SHOULD BE
WRITTEN IN A CLEAR, SIMPLE STYLE.
ALTHOUGH THE EXECUTIVE SUMMARY APPEARS BEFORE THE BODY OF THE BUSINESS PLAN, IT SHOULD
WRITTEN AFTER THE BUSINESS PLAN HAS BEEN COMPLETED. TO WRITE THE EXECUTIVE SUMMARY, GO
THROUGH THE BUSINESS PLAN AND FIND THE MOST IMPORTANT AND PERSUASIVE POINTS YOU HAVE
MADE. THEN DRAFT AN OUTLINE OF AN EXECUTIVE SUMMARY BASED ON THESE POINTS.

EXECUTIVE SUMMARY CONTD.
YOUR EXECUTIVE SUMMARY SHOULD DO ALL OF THE FOLLOWING
 Describe your business concept and communicate what is unique about your
idea
 Include your projections for sales, costs, and profits
 Identify your needs (inventory, land, building, equipment, etc.)
 State the amount you are interested in borrowing

EXECUTIVE SUMMARY
ALTHOUGH THE EXECUTIVE SUMMARY APPEARS BEFORE THE BODY OF THE BUSINESS PLAN, IT
SHOULD BE WRITTEN AFTER THE BUSINESS PLAN HAS BEEN COMPLETED. TO WRITE THE
EXECUTIVE SUMMARY, GO THROUGH THE BUSINESS PLAN AND FIND THE MOST IMPORTANT
PERSUASIVE POINTS YOU HAVE
MADE. THEN DRAFT AN OUTLINE OF AN EXECUTIVE SUMMARY BASED ON THESE POINTS.
ONCE YOU HAVE CREATED A DRAFT OF YOUR EXECUTIVE SUMMARY, ASK PEOPLE WHO
DO AND DO NOT UNDERSTAND YOUR BUSINESS TO READ THE SUMMARY. IF READERS DO NOT
COME AWAY WITH A CLEAR SENSE OF WHAT YOU PLAN TO DO AND WHY YOU WILL SUCCEED
IN DOING IT, YOUR EXECUTIVE SUMMARY NEEDS MORE WORK. NORA AND SAMANTHA’S
EXECUTIVE SUMMARY IS SHOWN ABOVE.

APPENDIX
THE APPENDIX TO THE BUSINESS PLAN INCLUDES SUPPORTING DOCUMENTS THAT
PROVIDE
ADDITIONAL INFORMATION AND BACK UP STATEMENTS MADE IN THE BODY OF THE
REPORT.
TO HELP YOU DETERMINE WHAT SUPPORTING DOCUMENTS TO INCLUDE, YOU SHOULD
ASK YOURSELF WHAT YOU WOULD WANT TO KNOW ABOUT A BUSINESS BEFORE YOU
WOULD
LEND IT MONEY.

APPENDIX
DOCUMENTS THAT MIGHT BE INCLUDED IN THE APPENDIX ARE SHOWN IN THE FOLLOWING
LIST.
 TAX RETURNS OF THE BUSINESS OWNER FOR THE PAST THREE YEARS
 PERSONAL FINANCIAL STATEMENT OF THE OWNER
 COPY OF PROPOSED LEASE OR PURCHASE AGREEMENT FOR THE BUILDING SPACE
 COPY OF BUSINESS LICENSES AND OTHER LEGAL DOCUMENTS
 COPY OF RESUME OF THE OWNER
 LETTERS OF RECOMMENDATION
 COPIES OF LETTERS OF INTENT (COMMUNICATION) FROM SUPPLIERS
 COPIES OF ANY LARGE SALES CONTRACTS
 YOU HAVE ALREADY NEGOTIATED

PUT IT ALL TOGETHER
YOUR BUSINESS PLAN IS YOUR BEST OPPORTUNITY TO LET OTHER PEOPLE KNOW
WHAT YOU WANT TO DO WITH YOUR COMPANY. IT GIVES YOU THE CHANCE TO
CONVINCE THEM THAT YOUR IDEA IS SOUND AND THAT YOU HAVE THE TALENT AND
RESOURCES TO MAKE YOUR IDEA A SUCCESSFUL BUSINESS VENTURE.
TO MAKE THE BEST OF THIS OPPORTUNITY, YOU WILL WANT TO CREATE AN ATTRACTIVE
DOCUMENT THAT IS NEAT, WELL ORGANIZED, AND INVITING TO READ. HANDWRITTEN
BUSINESS PLANS ARE NOT ACCEPTABLE. ALL BUSINESS PLANS MUST BE WORD
PROCESSED AND PRINTED ON STANDARD-SIZED WHITE PAPER. IN ADDITION, YOUR
BUSINESS PLAN SHOULD FOLLOW A STANDARD FORMAT CONTAINING THE
INTRODUCTORY ELEMENTS, THE MAIN BODY, AND THE APPENDIX.

HOW TO CREATE AN EFFECTIVE BUSINESS PLAN
PULLING TOGETHER THE INFORMATION YOU WILL NEED TO WRITE YOUR BUSINESS
PLAN INVOLVES RESEARCHING ALL ASPECTS OF YOUR BUSINESS, FROM LEASING SPACE,
TO WHAT YOU WILL CHARGE FOR YOUR PRODUCT OR SERVICE, TO DEALING WITH
COMPETITORS.
RESEARCHING ALL THE PARTS OF YOUR BUSINESS WILL TEACH YOU A GREAT DEAL
ABOUT RUNNING A BUSINESS AND MAY PROVIDE YOU WITH SPECIFIC IDEAS FOR
STARTING A COMPANY.

THERE ARE MANY SOURCES AVAILABLE TO AID IN THE RESEARCH PROCESS.
COMMUNITY, GOVERNMENT, AND PROFESSIONAL RESOURCES
WHEN WRITING A BUSINESS PLAN, YOU WILL LIKELY NEED TO SEEK OUT ADVICE FROM
OTHERS. PEOPLE FROM MANY ORGANIZATIONS CAN HELP YOU WITH YOUR BUSINESS
PLAN. AVAILABLE RESOURCES INCLUDE THE SBA, THE SBDC, SCORE, YOUR LOCAL
CHAMBER OF COMMERCE, TRADE ASSOCIATIONS, AND PROFESSIONAL BUSINESS
CONSULTANTS. SIDBI, SFCS, SIDCS

HOW TO CREATE AN EFFECTIVE BUSINESS PLAN CONTD.
CHAMBER OF COMMERCE
IN MANY COMMUNITIES, THE LOCAL CHAMBER OF COMMERCE OFFERS ASSISTANCE
INFORMATION TO ENTREPRENEURS. IT CAN PROVIDE INFORMATION ON LOCAL
RESOURCES, ZONING, AND LICENSING AS WELL AS TRENDS AFFECTING LOCAL

TRADE ASSOCIATIONS:
ORGANIZATIONS MADE UP OF PROFESSIONALS IN A SPECIFIC INDUSTRY ARE CALLED
TRADE ASSOCIATIONS.
THEY EXIST TO PROVIDE INFORMATION, EDUCATION, AND NETWORKING
OPPORTUNITIES FOR INDIVIDUALS IN THEIR INDUSTRY. THESE ASSOCIATIONS CAN BE
VALUABLE SOURCES OF INFORMATION TO ENTREPRENEURS.

.PROFESSIONAL CONSULTANTS SOME ENTREPRENEURS HIRE EXPERTS TO HELP THEM.
PROFESSIONAL BUSINESS CONSULTANTS CAN BE FOUND IN DIRECTORIES AVAILABLE IN
YOUR LIBRARY OR ON THE INTERNET.

FINANCIAL INSTITUTIONS
MANY ENTREPRENEURS ARE NOT FAMILIAR WITH THE FINANCIAL ASPECT OF STARTING
AND RUNNING A BUSINESS.
WHEN WRITING THE FINANCIAL SECTION OF YOUR BUSINESS PLAN, IT MAY BE
TO TALK WITH A BANKER AND AN ACCOUNTANT.
THEY CAN HELP ANSWER YOUR QUESTIONS ABOUT LOANS AND FINANCIAL

PRINT RESOURCES
INFORMATION FOR YOUR BUSINESS PLAN CAN COME FROM MANY PRINT SOURCES.
YOUR PUBLIC LIBRARY WILL HAVE MANY BOOKS ON ENTREPRENEURSHIP THAT MAY
PROVIDE YOU WITH VALUABLE INFORMATION ON RUNNING YOUR OWN BUSINESS. IN
ADDITION, BOOKS ON MARKETING, FINANCING, HIRING AND MANAGING A STAFF,
PURCHASING A BUSINESS, AND OPERATING A FRANCHISE CAN BE HELPFUL. THE
LIBRARY WILL ALSO HAVE BOOKS DEVOTED SPECIFICALLY TO WRITING A BUSINESS
PLAN THAT INCLUDE SAMPLE BUSINESS PLANS.
MAGAZINES MAY ALSO PROVE HELPFUL—ESPECIALLY MAGAZINES DEVOTED TO SMALL
BUSINESS OWNERSHIP AND TO THE INDUSTRY IN WHICH YOU WILL BE COMPETING.
ASK YOUR LIBRARIAN TO HELP YOU FIND MAGAZINES THAT CONTAIN INFORMATION
THAT MAY BE RELEVANT TO YOUR BUSINESS PLAN.
GOVERNMENT DOCUMENTS, INCLUDING PUBLICATIONS ISSUED BY THE SMALL
BUSINESS ADMINISTRATION AND OTHER GOVERNMENT AGENCIES MAY PROVIDE YOU
WITH USEFUL INFORMATION.

ONLINE RESOURCES
MUCH OF THE INFORMATION YOU CAN FIND IN PRINT RESOURCES IS ALSO AVAILABLE
ON
THE INTERNET.
MANY MAGAZINE ARTICLES THAT DEAL WITH ENTREPRENEURIAL TOPICS CAN BE
FOUND ONLINE. IN ADDITION, THERE ARE MANY SITES SPECIFICALLY FOR
ENTREPRENEURS AND SMALL BUSINESSES THAT MAY GIVE YOU DETAILED
INFORMATION. INTERNET SEARCH ENGINES CAN HELP YOU LOCATE RESOURCES.

MISTAKES IN BUSINESS PLANNING
MANY ENTREPRENEURS WILL NOT TAKE THE NECESSARY TIME TO CAREFULLY PLAN
THEIR BUSINESS AND PREPARE THEIR BUSINESS PLAN. THIS CAN CONTRIBUTE TO
DIFFICULTIES IN
GETTING THEIR BUSINESS STARTED AS WELL AS BUSINESS FAILURE.

TO CREATE AN EFFECTIVE BUSINESS PLAN, AVOID MAKING THE FOLLOWING COMMON
MISTAKES.
 UNREALISTIC FINANCIAL PROJECTIONS
o MANY INVESTORS WILL GO STRAIGHT TO THE FINANCIAL SECTION OF THE BUSINESS PLAN,
SO IT IS VERY IMPORTANT FOR THE PROJECTIONS IN THIS SECTION TO BE REALISTIC.
o PROJECTIONS SHOULD BE BASED ON SOLID EVIDENCE FOR THE POTENTIAL GROWTH OF
THE COMPANY.

MISTAKES.
 AN UNDEFINED TARGET MARKET:
o YOU MUST CLEARLY DEFINE YOUR MARKET AND GIVE A CLEAR PICTURE OF YOUR
POTENTIAL CUSTOMERS.
o CLEARLY EXPLAIN WHY THESE CUSTOMERS WILL BUY YOUR PRODUCT.
o BE REALISTIC ABOUT YOUR MARKET AND DO NOT ASSUME THAT EVERYONE WILL
WANT TO BUY YOUR PRODUCT OR SERVICE.

MISTAKES.
 POOR RESEARCH
o MANY POTENTIAL BUSINESS OWNERS ARE ANXIOUS TO GET THEIR BUSINESS OPERATING
AND DO NOT SPEND THE TIME NECESSARY TO DO GOOD RESEARCH.
o USE UP-TO-DATE RESEARCH INFORMATION AND VERIFY THE FACTS AND FIGURES IN YOUR
BUSINESS PLAN.

IGNORED COMPETITION
 DO NOT OVERLOOK THE COMPETITION AND DO NOT FOCUS ONLY ON WHAT THE
COMPETITION HAS DONE WRONG.
 INVESTORS WANT TO SEE WHO YOUR COMPETITION IS AND HOW YOU PLAN TO
COMPETE IN THE MARKET.
 OUTLINE HOW YOU WILL DIFFERENTIATE YOURSELF FROM THE COMPETITION.

INCONSISTENCIES IN THE BUSINESS PLAN
 IT IS IMPORTANT TO REVIEW YOUR FINAL BUSINESS PLAN AND BE SURE THAT YOUR
PLAN IS WELL WRITTEN AND FORMATTED IN AN ATTRACTIVE STYLE.
 BE SURE THAT INFORMATION PROVIDED IS CONSISTENT FROM SECTION TO
SECTION.
 IT IS A GOOD IDEA TO HAVE AN OBJECTIVE PERSON REVIEW YOUR FINAL BUSINESS
PLAN BEFORE YOU SHOW IT TO INVESTORS.

ACCEPTABLE TO
INVESTOR/
PARTICIPANTS?
REVISE
RECYCLE
REJECT
IDENTIFICATION
IMPLEMENTATION
PREPARATION
INVESTMENT
OPPORTUNITY
INVESTORS/
PARTICIPANTS
FINANCIAL
ANALYSIS
TECHNICAL
ANALYSIS
MARKET
ANALYSIS
ECONOMIC
ANALYSIS
COMMERCIAL
PROFIT-
ABILITY
NATIONAL
PROFIT-
ABILITY
NO?
YES?
IMPLE-
MENTATION
PLANNING
DETAILED
ENGINEERING
P
R
O
M
O
T
I
O
N
APPRAISAL INVESTMENT
DECISION
INVESTOR/PARTICIPANT’S
CRITERIA
BUSINESS PLAN
DEVELOPMENT PROCESS
BUSINESS
CONCEPT
IMPLE-
MENTATION

SOURCE
THE ENTIRE LITERATURE ON BUSINESS PLAN IN BASED ON THE
FOLLOWING WRITING:
CYNTHIA L. GREENE: ENTREPRENEURSHIP (21ST CENTURY BUSINESS),
SOUTH-WESTERN CENGAGE LEARNING, USA

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