Why Should You Create a Business Plan?
Many people think of a business plan as a formal document required only when a company is trying to secure funding. But business plans can serve other valuable purposes for small businesses that are not presently courting investors or lenders. The U.S. Small Business Administration suggests that a business plan serves as a valuable planning, communication, and management tool that can help drive the success of your business.

Going through the process of creating a business plan can help a company get organized and plan the companys direction, possibly bringing to light potential problems requiring alternative courses of action. A business plan can help a company and its employees focus on specific goals and objectives, allowing management to monitor and evaluate projections against actual results. Business plans can also be written for the purpose of attracting potential business partners or new employees. All small businesses, from startups to established family-run companies, can benefit from creating and following a business plan.

What's Included in a Business Plan?
Business plans vary in length and depth of content, depending on the type of business, the company's current stage of development, and the documents purpose. Typically, formal business plans for the purpose of attracting investors or lenders range from 10-30 pages in length, but a complex plan can be over 100 pages. Following, are the main components of a business plan and a brief description of what might be included in each section:

1. Executive Summary is a summary of the entire plan, which is complete, concise and engaging; usually 1-2 pages long.

2. Business Description mission statement gives objectives, company overview, history, and industry overview.

3. Products and Services provides a description and evaluation of the products and services; future products and services.

4. Market Analysis reviews the market segments, target market, customer characteristics.

5. Competitive Analysis shows the nature of competition, competitor overview, SWOT analysis.

6. Strategy explains the overall business strategy, company strengths, company weaknesses, strategy implementation.

7. Marketing and Sales Activities explain the marketing strategy, distribution, sales and advertising, publicity, tradeshows.

8. Operations Production reviews the facilities, customer service, delivery, legal issues, suppliers, partners.

9. Management and Organization explains the management team, organization chart, job descriptions and advisors.

10. Financials Expenses show the profit-loss projection, balance sheet, cash flow, break-even analysis, assumptions.

11. Appendix provides all other legal documents, resumes, photographs, suppliers, financial statements, etc.

How to Get Started
Determine the purpose of the business plan. Will it be used for internal planning, to attract investors, to gain confidence from suppliers?

Consider some key questions to help you collect your thoughts:

• What products and/or services does your business provide?
• What needs do your products or services fill?
• What are your business objectives or where do you want the business to be five years from now?
• Who are your customers and potential customers, and why will they purchase the product or service from you?
• How do you reach your customers?
• What financial resources are needed to start, maintain, or expand your business?

• Gather information and conduct research about your industry and your customers.
• Tap your insight into the industry based on your experience.
• Look for published information about the industry and your customers at the library and on the Internet.

• Analyze the data and information you have compiled.
• Get feedback, review, and edit the plan.

Sources
United States Small Business Association, Inc
Entreprenuer.com
About.com

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