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Creating Your Shop Business PlanBuilding a business is like building a home, you need a plan. Ruby Lane has compiled a list of tips and tools that will help you create a plan for your business, along with links to additional articles and samples of real-life business plans that are well-executed.
Why Write A Business Plan?
If you're serious about your Ruby Lane shop, then you'll probably want to take the time to write such a plan. There are all kinds of plans and your plan doesn't need to be 40 pages long! You can take many of the examples below and in the links, and edit them to meet your individual needs. The exercise of writing a plan will require you to ask yourself many important questions, and to consider aspects of your business you might not have paid enough attention to, until now.
The Small Business Administration has written the following overview about writing a business plan:
Business Plan Basics
A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. Additionally, it informs sales personnel, suppliers, and others about your operations and goals.
Plan Your Work
The importance of a comprehensive, thoughtful business plan cannot be overemphasized. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.
"The business plan is a necessity. If the person who wants to start a small business can't put a business plan together, he or she is in trouble," says Robert Krummer, Jr., chairman of First Business Bank in Los Angeles.
Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don't have enough time. But just as a builder won't begin construction without a blueprint, eager business owners shouldn't rush into new ventures without a business plan.
Consider four core questions before you begin writing your business plan:
Writing the Plan
What goes in a business plan? The body can be divided into four distinct sections:
1) Description of the business
Addenda should include an executive summary, supporting documents, and financial projections.
Although there is no single formula for developing a business plan, some elements are common to all business plans. They are summarized in the following outline:
Basic Elements of a Business Plan:
- Cover sheet
- Statement of purpose
- Table of contents
- I. The Business
A. Description of business
D. Operating procedures
F. Business insurance
- II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow
- III. Supporting Documents
A. Tax returns of principals for last three years Personal financial
statement (all banks have these forms)
B. For franchised businesses, a copy of franchise contract and all
supporting documents provided by the franchise
C. Copy of proposed lease or purchase agreement for building space
D. Copy of licenses and other legal documents
E. Copy of resumes of all principals
F. Copies of letters of intent from suppliers, etc.
For more articles and related information from the SBA, as well as a list of dozens of real-life sample business plans, visit:
Thank goodness for the Internet! Here are more links to articles, step-by-step tips and examples to help you develop and write a good business plan that will work for your individual needs:
(Please note that some of these sources also offer books and software for writing a plan. While some of these tools may be excellent, Ruby Lane does not endorse them.)
- I. The Business