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Writing a formal business plan is a useful endeavour for 3 reasons. First, it will force you to
thoroughly think through the financial details of your proposed
project so that nothing is missed. Second, it can be used as an operational guide when making
decisions. Third, it is essential to obtaining financing from
banks, other lenders, or potential investors. A good plan should be thorough, enthusiastic and
honest.
Your business plan reflects how well you can plan, organize, and market. It can make or
break your ability to obtain funding. Although business plans vary,
they must be up to financial community standards; consider getting professional assistance if
you have difficulty crafting a high-quality plan. A basic outline
of a five-part business plan is as follows:
I. Introduction
1) Cover Sheet: name, address and phone of the business and the principal(s)
2) Statement of Purpose that captures the essence of proposed business
3) Table of Contents
III. Marketing
1) Marketing method: wholesale or retail, roadside stand, farmers market, value added, etc.
2) Who will be your primary customers
3) Customer demographics: age, sex, income, education, lifestyle, where they live, etc.
4) Major competitors, their location, their strengths and weaknesses as well as your
comparative strengths and weaknesses
5) Trends in the market based on data available about your product(s)
6) Expected sales of your product(s) in quantity and dollars over next few years
7) Services needed for marketing: storage, packing, value added, advertising, transportation
IV. Finances
1) Source(s) of funds, how and when they will be used
2) Profit and loss statements: for last 3 years, or projected for next 2 years if start-up
3) Balance sheet: show assets and liabilities (for past 3 years if business existed) and
projected (sometimes called "proforma") for next 2 years.
4) Cash flow statement: income and expenses on a monthly or quarterly basis for past 3 years
V. Supporting Documentation