One of the most important early steps in starting a small business is to develop a business plan. Not only does it provide a blueprint for operations, but it also makes you stop and think about exactly what you want to do, and how you plan to do it.
The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the plan into several components helps make drafting it a more manageable task. In-depth help on developing a sound business plan can be found on the SBA Web site (www.sba.gov) in the section “Starting a Business.”
• Give a detailed description of the business and its goals.
• Discuss the ownership of the business and the legal structure.
• List the skills/experience you bring to the business.
• Discuss the advantages you and your business have over your competitors.
• Discuss the products/services offered.
• Identify the customer demand for your product/service.
• Identify your market, its size and locations.
• Explain how your product/service will be advertised and marketed.
• Explain the pricing strategy.
• Explain your source and the amount of initial equity capital.
• Develop a monthly operating budget for the first year.
• Develop an expected return on investment and monthly cash flow for the first year.
• Provide projected income statements and balance sheets for a two-year period.
• Discuss your break-even point.
• Explain your personal balance sheet and method of compensation.
• Discuss who will maintain your accounting records and how they will be kept.
• Provide “what if” statements that address alternative approaches to any problem that may develop.
• Explain how the business will be managed on a day-to-day basis.
• Discuss hiring and personnel procedures.
• Discuss insurance, lease or rent agreements, and issues pertinent to your business.
• Account for the equipment necessary to produce your products or services.
• Account for production and delivery of products and services.
• Summarize your business goals and objectives and express your commitment to the success of your business.
Once you have completed your business plan, review it with a friend, business associate, a Service Corps of Retired Executives (SCORE) counselor or a Small Business Development Center (SBDC) counselor. Call the SBA Mississippi District Office at (601) 965-4378 or the SBA Gulfport Branch Office at (228) 863-4449, ext. 10 to find your nearest SCORE or SBDC office.
When you feel comfortable with the content and structure, make an appointment to review and discuss it with your lender. The business plan is a flexible document that should change as your business grows.
For more information on all of SBA`s programs for small businesses, visit the SBA`s extensive Web site at www.sba.gov.
Janita R. Stewart is district director of the U.S. Small Business Administration`s Mississippi District Office. Send questions or comments about this column to email@example.com.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info