If you are just starting your or if you are trying to finalize your plan before you turn it over to investors my How to Write a Business Plan 100 Point Guide can help.
Cover sheet is the important section of a business plan. You will have to make a business plan which will be informative and authentic. Cover letter is an important section which must be well taken care of. After making a business plan, you need to place it to your clients for review.
In a cover letter you will have to highlight the reason of making business plan. If you are interested to open a spa center or restaurant or internet café, you will have to give the reason of opening a hotel /spa center in your cover letter. In a cover sheet, you will have to describe elaborately about benefits of running your business. Your clients need to be convinced about the objective and purpose of the construction of commercial establishment. You will have to highlight certain areas of statistics report, different sorts of preplanned diagrams and future plans.
The fact is that prior to write any cover sheet or letter in a business plan, you need to do extensive research to accumulate perfect data and information which must be used at the time of cover letter writing. Just write a short brief at the end describing your future prospect and opportunity which you can get by doing such a business.
To make a business plan fully original and informative, you will have to create a title page in your business plan. There will be an eye catching heading which must be meaningful. You need to give a descriptive note analyzing the business plan very precisely. The title page must be exempted from elaborative description and diagram.
This title page should magnify the name of author with date. You will have to give some detailed information about the confidentiality of the company. You will have to mention the name of the planner who has put much effort to create a wonderful business plan. In a title page, you must state in clear cut terms that the data and information in relation to the company value the sole ownership right of the company and under any circumstance, data should not be copied. Nor is it transferable to the third party.
Your title page should be neat and clean without any error. You must mention that the information should not be sold or handed over to the rival group of the company. You need to be more careful while preparing your title page.
Before starting your business, you will have to prepare a business plan. It is essential for you to create a table of contents in this regard. Try to follow the most workable format/template for designing a perfect and flawless table of contents which will highlight the certain sections of your business plan. Through the table of contents, you should mention the categories and items. Every item needs to be analyzed in different page later.
The table of contents must be placed in descending order. There is a pre-fixed template of creating table of contents. Try to follow that popular format which is understandable to others. This important section should include Executive Summary, Company Analysis, Company Description, Company Mission Statement and Industry Analysis. There are other items and categories which should be included under table of contents.
Before writing down table of contents, you must read some basic rules which are covered under company’s law. Your table of contents must be formed within the legal framework. If you are interested to make this section more prominent, you should bold the letter heads of the table of contents to draw the attention of the viewers and readers. Before going to the next section, you should review your table of contents once more.
Executive summary of the business plan is very vital section and you need to do homework before writing this important section in your business plan. While writing executive summary, you will have to make it brief and to the point. Any enlarged note and analysis should not be included into executive summary.
However, while writing your executive summery try to explain briefly about the future plan to expand the business more competently. You should give proper analytical view points about the success of your business in your executive summery. If you are not able to convince your clients and consumers to a great extent, your main purpose and objective of starting business will be shattered. Don’t make it very complicated.
Simplify the language to express your set of views and schemes which have been set after long research. When you write executive summary, you must specify the particular class of consumers who will buy the products and services. In executive summary, your main emphasis will be on brevity of summery and description, clarity in the usage of specific business terms which are easy to understand and flawless précised content. Avoid technical jargons to write executive summery so that readers will feel comfy to understand the content freely.
There are two major sections of the whole business plan which must be well taken care of. These are overview of your company/business and other one is gist or summery about the internal business within the company. Comparing to your executive summary, the overview section will be more analytical and elaborative. You need to analyze every point and step in detail so that the clients will be happy to know about the future vision of the company.
If you like to use short cut methods to write fantastic business overview correctly, you will have to find out the proper answers to these following question tags like who, what, which, when, how and so on. Suppose you need to seek for the positive answer to the following question “What is the particular size of your commercial set up?”. This will give you a proper guidance to reach your target.
Therefore, your business overview will be informative, descriptive with proper analysis and a set of examples. Better to say you should try to highlight your business strategies in this overview section to create a fantastic and informative business plan. You need to mention the specific consumers’ community in this overview section who will show interest to make deal with your company.
The product and services section of the business plan is one of the most crucial aspects of a business plan. When you decide to prepare products and services format, you need to be very clear whether you want to offer only products or the combined form of both products and services. In a business plan, you need to be very specific about your scheme. What sort of products and services do you want to offer to your consumers? For example, if it is business plan about a spa or a healthcare center, you must give proper product descriptions highlighting the features of products and services which are available at the effective prices.
As for the format, you need to write short descriptive note about services which you want to provide. Specify whether your company wants to provide backup – hourly, weekly or on monthly basis. Create a sub-category about company’s logo and the theme. It will help you to convince customers about functionality of your products and services. Overall, this section of your business plan should be concise yet informed.
Also, you will have to include a brief comparison study and explain the reason for the popularity of your products and services. An effective sales literature is a must to describe the various products and services on offer by your company.
When you write any business plan, you need to think about the location section which is very important to keep in mind. In your business plan, you will have to mention the landmark where your commercial infrastructure will be built. Therefore, at the time of the preparation of geographical location section, you should give the perfect short description about the location or site where you are supposed to start your business in a building. You will have to mention whether the property has been taken on lease or you have the ownership right over the building. What sort of business are you going to start at the particular site?
You should give the reason of opting for such location. You need to write location site section in your business plan in such way so that the readers will understand well about the landmark of the site and to what extent it will be helpful to consumers to visit the departmental store, shop or shopping mall from their residential housing complex.
To be brief, you need to clarify the positive sides of your location discarding the minus points. It will assist clients to realize the importance of your business. Your location section in business plan should be well organized.
In a business plan, you need to more specific in highlighting the certain areas of concern. If you want to start up your business, you need a perfectly designed business plan which must be up-to-date. How to write a perfect business plan depends to what extent you are delivering right data. Ownership structure section is the indispensable part of business plan. In this part of the business plan, you will have to prove your ownership right to possess the particular structure. You should mention the name of controller of the ownership structure. It is essential to point out the guarantor who owns up the responsibility to hold back the liability.
Under this category, you will have to give a short explanation about income tax related provisions which you need to follow for making payment. In this connection, better to talk to a specialist or income tax consultant to take feedbacks about the particular law in regards to ownership infrastructure.
In ownership infrastructure section, you should mention names, address for communication, shares, stocks and other holdings which have been invested so far. There should be name of MDB or board of directors as well. Finally, you will have to include the amount of total stock which has been duly authorized by legal institutions.
In your business plan, you should write a well informative intellectual property section which will cover the certain areas of concern NDA or Non Disclosure Agreement is very important area which must be well taken care of. If you have any wish to make a flawless business plan, you should write the intellectual property section, you will have to strictly follow some basic guidelines. Non Disclosure Agreement should not be handed over to third party. The intellectual property covers vital and confidential information and data about the development project and company’s law.
Therefore you need to protect your intellectual property for the benefit of your company. On NDA part of your plan, you will have to put your signature and date. In addition, there should be extra space for the signature of the second party. You will have to include “entirety and modification” clause in this section which will explain the importance of the safe keeping of the information and data for the safety of the company.
As intellectual property is very vital part of your business plan, you need to check the content several times before submitting. You need to check which clause covers the country’s law. Every part of the intellectual property category in business plan needs to be written step by step.
Every developing or established business these days needs to make sure that it has presence in both the real and the virtual world. Web presence of any business can be divided into various groups. Depending on the various facets of the business one can choose between the various options. The most basic of these options is that of an official website of the business. This official website marks the pivot around which the whole business would revolve.
In your business plan, you need to make sure that you include the details of the official business website and other means which you would be using to promote the business. Even your home website can be of different types i.e. it may include selling of items directly via the website or you may provide online chat support.
All such details should be included in the web presence section of your business plan. If you are planning to include some supporting website of the same niche as your business for promotion and taking your web presence to the next level, then include a list of such websites which you can utilize for your purpose. If you are planning to do some press release or publish some related content, then make sure that you include the facts about such diverse options in your business plan available these days to boost your web presence.
Team introduction is one of the important parts of a business plan. You must be careful while writing introduction in your business plan. Precisely, make a short introductory note highlighting the name of company, partnership and sole businessman to whom you are liable to send your business project for further reviews. Write just two or three statements about the business which you want to do in future. A brief explanation about your resolution and reason of starting business will make your team introduction more informative.
In your team introduction, there is necessity of writing a short descriptive note about the confidentiality. Your information is vital and valuable to the company. For this reason, information must not be leaked or transferred to other persons with whom the company or the owner or the co-partner has no connection legally.
Hint at the name of business planner who has the extensive experience to make such a fantastic business oriented project. If the introductory part is not eye catching, reviewers and clients will not be interested to check business plan. Take an overview of the business plan in the team introduction. Give few examples in two or three lines about the future plan and purpose. For instance, you can highlight the area of guide management program which escorts you to make business plan.
Your business plan must be informative and updated. Executive Resume is the particular section which must be created fantastically to explain different points clearly. There must be four divisions like objective, history, education and summary. Your executive resume must be accurate in specifying certain aspects of business.
In a business plan, you will have to let the reviewers know the exact purpose, objective, nature and profit area of your business. Your executive resume will be a sophisticated communicative tool which will help clients and reviewers to know better about the business owner and the purpose/agenda/objective of the business plan. Resume is a detailed chronicle or a bio-datum about the business owner and his trading. For this reason, try to write executive resume in such way that the third party will come to know about the company’s agenda and future plan in authentic way.
According to Joe Meissner, the perfect executive resume will highlight the strategy and scheme which a business owner has made beforehand. Therefore in this executive resume there must be the availability of different marketing surveys, strategies, marketing consolidation and different sorts of collaboration and merging programs. Instead of using informal addressing terms like you/me/we, use good anecdotes which are relevant to context.
The management responsibility chart in a business plan consists of four main parts.
While writing a responsibility chart it is important to focus on the position and not on the person holding the position. Also, ensure that all the necessary details regarding the duties of the position are well laid out for the understanding of the person holding the position. The Responsibility chart is such a facet of business plan that is not constant and needs revision from time to time depending on situation at hand. Make sure you inculcate the changes as time passes by to ensure best productivity.
Professional services section in your business plan should cover income tax related issue, auditing, accounting packages and other financial issues. When you write this important section, you will have to be aware of the tax preparation related rules which are at variance with different states in America. Your professional services section must indicate the constant cash flow and economic strategic plans which influence a commercial sector. Under this section, you need to present an overview about commercial milieu which is favorable for the growth of the business.
Business liability is also important when you are bound to provide high quality products and services to your customers. If they are not satisfied with the service you are going to offer, your company will not stand on the strong platform. Now liability insurance must be covered in this section.
Just write a brief note about the business liability and how a finance company can help you to bob up from destruction and financial damage. Consumers’ forum will charge you if your services are not up to the mark and detrimental to the customers. Therefore while making a business plan; you should try to cover liability of the company to follow rules and regulations to let the business run smoothly.
A business plan must be loaded with strategies, various growth oriented programs, development project reports and lot more. Now Advisory Board in this connection is very important area of concern in a business plan. You will have to write in a fantastic way about the external management machinery which will regulate the company by giving necessary advice and feedback. This external force is very user friendly to influence management to take drastic steps for the benefits of the company.
In your business plan you should mention the name of the consultants and legal advisors of a board in a company. You must give a descriptive note about the plan of setting up an advisory board. Your clients will be satisfied to know that you have a strong monitoring system to keep the track of various projects and the total workflow within the company. You have a powerful management which is under the supervision of a board of advisories who will predict by giving their personal feedback regarding different projects.
When you write Board of Advisers section in your business plan you will have to make list of names, titles, addresses and performance track records of those advisers who will indirectly help management to solve problems.
If you want to write loan application in your business plan, you need to follow guidelines and rules set by SBA or Small Business Administration. You need to give an analytical note about the assets and deposited fund which have been used so far to start a business. Your loan applications must be well informative clarifying every point clearly and correctly.
It is very essential section of a business plan as you can get good loan offer from banking sector or any autonomous financial institution on the strength of your holdings, stocks and property. You need to ensure good cash flow to spoon feed your business. In your loan application, you need to mention the present inventory items which are left unused or stored for future usage.
For instance, if you have 100 computers in store and in past you didn’t find any scope to use them, you must mention the total value of these assets which can be pressed into service for running a software development business.
Your loan application will reflect this issue. Your financial benefactor is desirous to know the financial strength of the loan applicant to run business. You should mention the total cost of infrastructure, machines and other accessories inclusive of maintenance of equipment.
In a business plan, you need to provide a list of movable and immovable equipment and accessories in more organized way. Now, when you write capital equipment and supply list in your business plan, you should include those equipment and machinery which are stored in your commercial infrastructure. All these items have value in the market. Your clients need to know the amount of the tools and equipment which are kept under lock and key in your store room. You need to mention the date of depreciation of products. If you are not confident of the date of expiry of your equipment, in the business plan, you should give the date of purchase.
Now, you need to give the costing value of the equipment depending on the present market price. Suppose several years back, you purchased a package of ten computers. At that time, price rates of these digital notebooks were different. However, the usage of these devices was not extensive.
In the present marketing scenario, the price can be more or less with the possibility of expandable usage. You need to calculate the price of these movable accessories and mention in your business plan. Major and minor equipment/machines/tools should be enlisted in your business plan.
Balance sheet reflects the status of business by providing information in relation to asset value, liability, the worthiness of property. Assets provide cash during emergency. If you have good equity shares, stocks and holdings, you will get secured loan on easy terms and conditions. Therefore, you need to make a shortlist of the items and accessories which you can transfer into cash. These valuable assets need to be short listed into your balance sheet.
In your business plan, you will have to enlist the necessary items like bank loans, accounts and credit history. If your credit scoring is excellent, you can get another loan to spoon feed your business. You must calculate the total market value of convertible holdings and the total amount of these convertible assets should be included in your business plan.
Under current asset and holdings, you need to specify products such as cash, inventory and other items which are up to date and transferable into cash. Hand to hand transferable accessories/assets/holdings must be included in business plan. For instance, you should mention money order scheme and pay checks which can be snail mailed to receivers. If you have liability insurance package, government sponsored bonds and security deposits in your bank, those items must be enlisted in your business plan.
In your business plan, you need to explain the break even analysis accurately so that you can take pre-preemptive measures to overtake break even situation in your business. To be frank, break even is not profitable to a commercial organization as it indicates the zero profit without inviting any loss. In this case, there will be no financial gain after selling the products and services to customers. Nor will there be any loss as well. The manufacturing cost and product sale will be equal.
In your business plan, you should mention various factors concerning the break even situation. You need to highlight the areas of fixed and variable costs. For instance, if you run a small sized book stall or kiosk or stationary stalls, you should buy products. If you purchase a set of spoons which have cost you $5 per set, it will be variable cost. You need to sell the product at different price rates.
In the break even analysis section, you must point out variable costs to analyze the break even condition. Unit price rate must be included in your business plan to highlight the break even analysis section. Unit price is the fixed selling price tag of the product. You will have to fix that price unit in your business plan.
Pro forma income projections always highlight the cash flow process in terms of currencies. In your business plan, you need to insert this important section to make your clients aware of cash flow both internally and externally. You should insert some
Important points in framing pro-forma income report. Your money lender or financial benefactor will probe how much amount is invested to run the business and what the net amount of outflow cash is. Therefore, you should analyze perfectly the Pro forma income projections.
Pro Forma Income P&L (Income) will showcase or reflect the total amount of inflow and outflow of financial resources for a span of a 3 year-term. You are required to use the financial gains for the first one year following the figure which is set in Pro Forma statement. For the next two years, you will have to set up a new project relying on future trends in the market and expected economic infrastructure.
Your Pro-forma income projection must be up to date and loaded with current project reports regarding inflow and outflow of revenues/cash. Lastly, under this section, product liability and total worthiness of the company must be covered to make the pro-forma income project more informative.
Why Is It Needed?
There are many guys who don’t know how to get success in a business. Business plan needs to be done to expand the trading. Business plan will help you to organize all the business related issues in more systematic way. Every plan has had pros and cons. You should be target oriented to design the compact program which will provide good outcome within short span of time.
Financial assets are lifeblood of your business. You must explain more clearly about the different aspects of business. You will have to explain the reason of the requirement of fund in business. Use your razor sharp intelligence to write more confidently about the different sources of earning loan amount and fund to revive the financial strength of the company.
To start a small sized business, you require good finance to buy equipments and tools inclusive of furniture pieces. You need finance to face the crisis during economic downtime. If you have valuable assets and property, you will have to calculate the marketing value of these holds. You will have to mention all the financial background related issues in your business plan. You should use your reasoning power to convince clients by providing financial report, income chart, information about sources of getting fund and names of financial benefactors.
The three year summary or the thirty six month summary is crucial aspect of the business plan that gives a bird eye view of the projected financial influx involved in the drafted business plan.
The projected three year summary should be based on the prevailing market conditions and other key indicators and should take into consideration the current and expected inflation levels. One can make this summary more coherent by dividing it into subsections.
Suggested subsections for this three year summary include a section detailing the list of financial actions required to be executed within the three year period. Further, a need may arise of financial transaction even after the stipulated three year period but still related to various procurement of that period. A separate section for such finances helps in making the financial summary of the business plan more transparent and accurate. In essence, the cash flow projections and the income statement should cumulatively include the three year summary.
The projected income stream from the business is also included in the three year summary. Based on certain key indicators, one can draft out the expected income levels of the next 36 months. One should also include the parameters on which the assumptions for this summary are based. For e.g. if the company plans to use Google Ad-sense to direct users to a website which is selling a product, by assuming a conversion rate (again determined by various factors) for the people landing on the selling web page, one can estimate the income stream. The cumulative outcome of various related factors can give the projected income over the span of three years.
The financial details of your business plan should be prepared monthly for the first year and should be updated regularly. By drawing up your cash flow mechanism and revenue stream plans on monthly basis, you can get a clearer picture of the financial section of your business plan. There are various other reasons for detailing the financial plan on monthly basis.
First, it helps keep a check on the expenditure. A sudden rise in expenditure can be carefully scrutinized and reason for the same can be inculcated in the future business plan model. Also, the monthly detail of the business financial statements helps in allocating the savings, if any in a better manner. For e.g. in case there is less expenditure than expected, then you may make a provision in your business plan (after tallying the results) for diverting that money to other section such as marketing or a bonus depending on the situation at hand.
On the excel sheet on which you are drafting the monthly financial details, you may include as many lines as possible for better understanding of the monthly statements. If you business is huge, the excel sheet may run into many pages but the core principle of the monthly plan remains the same i.e. detailed listing of what the financial influx for the future will be backed by the inputs that are required to achieve that goal.
We have looked into the fact that the financial statements should be made monthly for the first year. Now we take a look peek into another facet i.e. quarterly financial statements for the second and the third year. The core reasoning for quarterly detailing of financial expenses is the same. In this section, we will take a look as to how to go about doing this. We can use this patter for the monthly detailing for the first year too.
For the financial listing, you need to include various sections given below:
You may disregard one or more of these facets under your quarterly/monthly financial statement depending on your business and needs.
The projections in your business plan form the core part of the business strategy in your business plan. Most investors go right down to the business projections even before they look into other aspects of the business plan. Inaccurate financial projections of the business plan can blow the lid of any future project.
How to go about the assumptions for the business plan? First, make sure that the assumptions are consistent and not poorly reasoned. Do not project unrealistic projections as these can damage the reputation of your plan. Well reasoned and a well researched assumptions of the business plan go a long way in bagging the confidence of investors.
If possible, one should try to base the assumptions on actual financial results of a similar company in the same niche. Normally, it is a common practice amongst companies to reason the assumptions based on facts and figures of the prevalent companies of the same niche. Hence, it makes all the more sense to do the same based on the same line of thought. If there are reasons for which you expect to grow faster than your competition, then it is very important that you include such reasons in your business plan and back your reasons with sound logic.
In a business plan, it is very important to create a pro-forma cash flow in order to calculate the inflow and the outflow of a business. This information will help the company understand if and when they need financial support to sustenance the business.
With these, you will try to estimate the net change by subtracting sales and other receivables to cost of materials, operating expenses, taxes and other costs, and later summing the result to the starting cash. The net change will tell you the amount of cash you will have in the end of the period.
The financial section of a business plan includes another part called the chart of accounts. This section is basically the listing of various accounts associated with the financial record book. Each and every account listed comes with a reference number. To draft out the chart of accounts, first you should classify all the associated accounts under various categories.
Further, each account should have an associated number for its recognition. If you have a small business plan, then this number can be of three digits but higher number of digits is certainly more flexible as it allows for the addition of more accounts in a logical fashion. It is imperative that some thought process is invested in choosing the account reference digits logically in accordance with the industry norms.
Defining an account is also important. One can define accounts based on the segment they deal with i.e. manufacturing accounts, retail accounts etc. This helps keep the chart of accounts more coherent and accessible.
There are also some pre-conceived notions with respect to the listing of accounts. Like balance sheet accounts list accounts with maximum liquid assets first. Sometimes, these accounts are simply listed according to the reference number or in alphabetical order.
In this part, you will need to provide Stakeholders and possible investors the banking information of the company. It is necessary for them to know exactly the cash-flow you have. The banking information will be confirming what you pointed to be your starting cash as well as your sales average. This information is the foundation of the pro-forma cash flow and it will explain everything you said above about your company.
You will have also to explain how you are going to reconcile the bank account and when you are going to do it. It is important to have it on the business plan. You must do the all the math to see when it is the best period for making the changes needed in your bank account. You should also find out how you are going to provide funds when needed. For example, you may reconcile the bank account with your own money and on a monthly basis or you may reconcile the bank account with loans and on a trimester basis.
But this must be written down in your business plan. Stakeholders need to be sure you are confident on your company’s possibilities and that you have a plan for any situation that may appear to the environment.
First of all, the business plan should say who the accountant is. It must also say which programs and software of accounting you will be using in your business.
The method of accounting is one other thing that needs to be written down. There are two methods of accounting: accrual and cash-basis.
But which one is the best accounting method for your business? That depends on many factors. You should discuss it with your accountant.
Tax issues must be clarified also. Basically, it must be written that the accountant will take care of all tax issues and that you intend to always pay within the timeframe.
You will also have to say your federal employer number and your sate identification number. This will give extra credit to your company.
If your main goal on building this business plan is to seek investment, this section is by far the most significant one. You will need to create this in a certain way to make your company interesting, because you don’t want to miss any potential investors.
First, you need to summary the financial situation of your company, using mostly the pro-forma cash-flow and the banking information. Investors need to understand exactly where your company stands in this matter.
Then, they will need to know how much money you need, how it will be used, what the ROI (return on investment) is and when they will receive. Once again, the pro-forma cash-flow will give you this information, if it is well made, but not all of them. You will need to calculate the ROI.
Some professional investors want to know also if you have an exit plan in case the shares go public. You should provide this information too.
The share of stocks each amount of money will buy should also be written down here.
If you are seeking for loans, don’t dismiss this information from your business plan. It will be needed also to calculate your risk and, consequently, the loan rates.
All business plans, irrespective of their niche, are capital intensive and require capital in one form of the other to ensure smooth working of the company machinery. There are various aspects of capital requirement which you would like to take up in your business plan.
Estimate the amount of capital needed based on various factors (discussed below) and give sound logic in your plan with regards to the basis of outlay. Include market information, both current and prospective in concordance with the prevalent rates with regards to the requirements of your business.
Your capital outlay plan should also take cues from your competition and their financial levels. Think deeply into the marketing strategy, sales strategy, pricing, marketing channels, advertising plans and base your capital projections on these facts and figures. Take care to ensure that your outlay should be coherent and a sudden spike down or above the norm will raise a red flag with the investors.
If possible, include a sub section for expected inflation levels and a portion for unplanned expenditure that may be incurred. Keep a cushion for changes in market conditions. Details about supplier credit, management finances and other financial duties should be included in this section of your business plan.
Once you’ve decided how much money is needed you now have to prove to both yourself and your lender/investor why the money is needed. This section outlines the importance of both getting the funds as well as outlines why you are seeking the funds from an outside source.
Things to include here
You are trying to show those you seek money from that you know exactly why you need the money while also outlining all efforts you have given personally to raise the money on your own.
The usage of the capital in your business plan plays a crucial role in determining the efficacy of your plan. How you are going to use the capital that investors are going to invest with you is crucial for securing the confidence of the investors.
There are various sections under which you can plan your capital usage. These are
Investors form the core part of the business plan. After all, it is the investors who provide the required capital for execution of the plans that you draft on paper. Hence, it is essential that you include a detailed analysis about the offering to investors.
In this detailed analysis you should ideally include:
Competition array refers to the plethora of competition in the same niche as your business. Under most circumstances, the competition array is framed after a detailed market analysis has been carried out. There are some core aspects which need to be looked into to draft this section of the business plan.
Firstly, look into the type of competition that your business may face. This could be direct or indirect. Direct competition is the business which has the same customer base as you do while indirect competition may or may not have overlapping priorities. In your business plan, you should create a list of different competitors that you have and generalize them into specific categories.
It is also a very good idea to look into the strength and weakness of your competitor. How good are they? How is the quality of their products? Do they have good customer support? Are their products popular with the masses? If yes, then why? How can you improve on what they currently offer? These are some of the many questions which you should be answering your business plan with respect to the competition array.
However, the place where you business plan can really shine is by projecting something substantial which these businesses do not have on offer. Why would you win in the current scenario? The better you answer this question; the better is your business plan.
The logic behind including competitor profile is very ordinary yet very powerful. In this information age, the upper hand is of a business which has the best access to information and competitor profile is the reflection of the same. The common technique for creating the competitor profile consists of the following aspects:
In this section of the business plan you need to include details about the pricing of your products and the reason behind the same. This in turn will determine as to how you are going to price your product and other services. Needless to mention, the price of your products needs to be competitive and at the same time usher in good profit margin.
Make sure that your pricing strategy includes other types of costs of manufacturing like overheads, selling costs etc and ensure that it is competitive at the same time.
Not only is it vitally important to know as to which segment of people or customer base you are catering to but it also vital that you know the same about your competition. Just like you would dig deep into analyzing who your audience are and what they want, it is worth every penny if you look deep into the strategies of your competition and include those in your business plan.
There are two aspects with respect to your competitor positioning which you can utilize to your advantage. The first is by highlighting the weakness of the competition, locating their customer base and highlighting ways to differentiate your business idea from the competition. By highlighting the fresh and new aspect of your business plan backed by accurate competitor positioning, you can craft out an impressive lead.
In your business plan, analyzing competitor positioning can also help you portray the efficacy of your product against the competition. For e.g. if you know that your competition targets a segment ‘A’ of the population, then you may chart out facts which convey that your product can cater to demands of customer buying ‘A’ and also another segment ‘B’ of the same niche. This would mean a wider customer base and increase investor confidence. This would also ensure that the risk factor is reduced with respect to your business plan.
Analyzing the business position in the market with respect to your business plan is an essential part of implementing your business plan. There are various aspects which you need to mention in your business plan of in order to determine the business position accurately. These are:
The product that you offer in the market becomes the face of your organization. If you make mistakes while analyzing the competition levels with regards to your product then the entire business plan can fall flat on its face.
Discuss the current market situation with respect to your product. What is the demand for that particular product and what need does it satisfy? List the companies that are supplying the same product, if any.
Include the list competition that the product is going to face when it is launched into the market. This competition can be direct or indirect. Make sure that you include both to get the best perspective on the market. For e.g. If you are planning to launch a business about car modifications and spare parts then not only do you have to look at other companies doing the same but there could also be some car manufacturing companies vying for the same customer base and providing one or many products in the same segment.
Include the details of the market share with respect to the product that the competitors hold. Include plans on how you plan to make inroads into the competition faced by your product.
As stated many times before, in depth analysis of your competition goes a long way in determining the feasibility and efficacy of your business plan. If you plan to present your plan to a group of investors then make sure that you know exactly what the competition has on offer and how you plan to complement the current offerings. In this section, focus on the following aspects:
Business product menu section in a business plan includes the detail of products that you plan to offer in the market. It is very important to analyze your business product menu in the light of the competition and lay it out in a coherent manner in your plan.
In the cut throat scenario of the modern world, it is die hard essential to promote your products and this forms another aspect of your business plan. There are various means of promotion and you should details the methods which you plan to use to promote your business. The various modes of promotion are directly dependent on the type of business you have and you should list out the details likewise.
In order to get the best out of your promotion campaign, most businesses try and analyze the same about their competition and adapt accordingly. Hence, it is important for you to consider the various promotion methods being considered by your competition.
First of all, make a list of the various promotion methods being used by the competition in your business plan. Generalize these methods into various categories for an in-depth analysis.
Detail the facts about the results of the promotion methods of the competitor. How much sales did the promotion methods produce? How well sustained were the sales?
Next, include the focus of the competitor’s promotion methods. For e.g. do they focus on a particular segment or are their methods executed in general? What exact customer base are they targeting?
Include details about what your competitor is offering via their promotion methods to the customers and try to give reasons as to how you can edge past the competition.
The monetary aspect of your competitor promotion methods should also be included. What percentage of their capital outlay do they spend on promotion and how? Include details about what is working for them and what is not. Try to answer these questions and draw up a balanced promotion plan for your business by taking cues from the competition.
There are various means by which you can promote your business. Include specific details about the various means which you are going to use in order to promote your business. The details should include everything from impacting the purchasing decisions of the consumers to packaging and retail. You can look into these aspects under various sections:
Your business plan should include details about the distribution methods that are going to be used for your products. Various points need to be included in your business plan. These are:
An executive marketing summary is an overview of your marketing strategy. It synthesizes the most noteworthy parts. You must describe these points:
A description of your company and services or products you provide
As you can see, this information is a summary so, obviously, you need to work on this subjects before you make an Executive Marketing Summary. It should be one of the last things to do on a business plan.
The situational analysis is where you are going to evaluate the market where your company is in. It is also known as the 5 C’s. With the situational analysis, you will be able to understand the internal, the micro-environment and the macro-environment.
These following aspects must be on your business plan:
SWOT analysis is a marketing investigation on the Strengths, the Weaknesses, the Opportunities and the Threats involved in your company.
First of all, you need to know that the Strengths and the Weaknesses are internal factors in this analysis, so they refer to the company. On the other hand, the Opportunities and the Threats are external factors, which mean they refer to the market you’re in.
This will give you an idea on how to create a SWOT Analysis:
Your company is in good shape if its strengths are the competitors’ weaknesses and if it can make threats into opportunities.
You have to set your goals in this point. As I said before, setting objectives is very important on planning the future of the company. They are also meaningful in terms of controlling the operations on your business.
These are some objectives you may have:
There are just examples. You may find that they make sense in your company’s business plan or not.
The objectives are based in everything else we have seen so far. It’s important to plan this in order to make your employers work for this matter.
Strategy and goal orientation are important aspects for any business. In this section, you need to elaborate on the marketing strategy you plan to adopt to promote your products. This is usually a combination of various agents. Include the following in this section:
Clearly define your customer base and be really specific.
The advertising methods you plan to adopt to target this customer base.
What resistance you are going to face i.e. details about competition and their methods and counter methods.
Why would this strategy work and explain the edge that you have over the competition.
Include details on how you plan to utilize your marketing arms to fully tap into the edge that you have over your competition.
Include various charts, figures and graph related to this proposition. This section may run over to many pages. An analysis of the selling strategies being used in the market and their effectiveness should also be hinted in this section. Prove fats about how your strategies can give a boost to sales and your projections for the same.
Round off this section with details about the other tools which form part of your strategy like ads, brochures, door to door marketing etc.
The marketing action program forms the basis on which the marketing goals of any company are achieved. While writing the action program for your business plan one needs to ask various questions. These questions include – What is the goal of this action program? What is the cost involved? Can I minimize the expenditure? Your action plan needs to be clear and should address the core customer base.
After answering these questions you need to draft a marketing strategy in your business plan. You should start by detailing the aims and objectives of the action plan at the start. After wards, you should look into the course of action which you need to follow. You should mention the various sources which you would be using to promote your product. You should also detail the logic behind the feasibility of your marketing plan.
The action program in your business plan may also give priority to different factors such as company policies and current market conditions. For e.g. if you are promoting a product for youth then you may consider using social networking websites like Facebook for promotion. This could be part of short term or long term action program, as per the need of your business.
Every business exists for the purpose of earning money. For establishing and achieving future financial targets, it is necessary to be able to estimate of future financial earnings for a company. An economist is able to estimate the future earnings based upon the past internal sales and accounting data which is combined with economic indicators and external markets, over a given time period.
Usually, financial forecasting is done for the period of coming year. One of the most difficult aspects of financial forecasting is predicting the revenue which will be earned by the company during a specified period, sometimes which is not achieved due to change in any single factor.
One of the advantages of the financial forecasting is that in the process, you get to review all the data and get it analyzed. You get to know the weak areas of the company. Second, you can set the actual targets for the company. Financial forecasting is a necessary part of the business plan as it estimates the future earnings of the company as well as points toward a firm target. It also shows the investors that the company is serious in achieving targets. In a business plan, financial forecasting is usually a part of marketing plans.
In this part of the business plan, you should describe how you are planning to control the operations in your company. Controlling is one of the manager’s functions and it helps guarantee that everything is going as planned. There are many things you can write in this section, but I’m going to point out a few of them:
To analyze the Macro-environment, basically, you have to make a PEST analysis. We saw a little bit of that in the situational analysis but now we’re going to go deep into the subject.
PEST analysis means Political, Economic, Social and Technological analysis. So with this study you will be able to understand your external atmosphere.
Recently, PEST is also referred to as PESTE with the extra E referring to Ecological. This has changed mainly because of the importance of environment issues nowadays.
Here is where you make a market analysis in volume. First, you need to measure the dimension of the market:
The consumer is your target and you need to be able to classify him/her. These criteria will help you make an image of your typical consumer:
For example, a company that sells toys needs to categorize its target. That would be:
This is extremely important to know on whom to focus your product and your publicity. And you have to be careful because sometimes the target you projected the product to, it’s not the same that is actually buying it.
You have to set your goals in this point. As I said before, setting objectives is very important on planning the future of the company. They are also meaningful in terms of controlling the operations on your business.
These are some objectives you may have:
There are just examples. You may find that they make sense in your company’s business plan or not.
The objectives are based in everything else we have seen so far. It’s important to plan this in order to make your employers work for this matter.
Marketing Research is a complete study on everything around your company. It’s the marketing plan per say.
In this part, you will have to describe your marketing plan and how you tend to promote your business. Think about the advertising and the product.
Also, tell your sources of information such as market studies.
Take all of the knowledge about your company and its market you pointed out before and try to apply it to the product or service you are providing.
In essence, make a marketing-mix The Four Ps:
When you are planning all of this and writing it on the business plan, you will be able to understand clearly what will happen after your product is fabricated.
You need to write down on your business plan the future scenarios that can happen. Weather they are possible or very possible, you must be aware of what can happen in the future and provide possible solutions for each case.
The backup plan (B Plan) must be all explained in this part. Stakeholders and possible investors want to know they are not going to lose money if something goes wrong. They need to know that the company will survive in the worst case scenario and that you will do anything to save it.
Imagine if a natural catastrophe happens and affects the region your company is in, how will you make it through? Or if a new technology replaces your product, how will you come back?
This has to be clear about all possibilities, even the good ones. For example, if the company suddenly gets an amazing deal and starts selling millions of products a month, what will happen to the profit?
Furthermore, you have to assure that the company will always pay back to the investors. They have to trust that you are capable enough to lead the company no matter what happens on the exterior and still make them money.
In this part, you will have to explain where the Company Name came from. It is important to know the foundations of the company and why you chose to make this kind of Business.
This can also be called the story of the Company.
For example, Google’s name came from google which represents the number 1 followed by 100 zeros. It was a way to show the dimension of the internet. But, by mistake, it got registered by Google and it stayed that way until today.
If you don’t have a company name yet, take this in consideration:
Keep it to be easy to spell. You want people to remember your company’s name so they can come back and refer it to other people.
It needs to remember something physical. If the name is a visual element, people will remember.
Make sure it has a positive connotation. It must give strength to your company.
Add information about the product of the company. But when it gets famous, you can modify it. For example, Apple started as Apple Computers.
Make it should be short. Again, short names are easier to remember.
Although a lot of the times the name is underrated, it is one of the things that mostly represent the company.
If you have a vanity 1-800 number you would want to list it here. This can also include a local number that may have a brand name in it. This shows a level of professionalism that goes above and beyond a basic business set-up. This is something investors as well as customers like to see.
Choosing a name for the website of the company should not be ignored by any aspiring business. There are various social, psychological and monetary aspects related to the website name. One should draw up various reasons for choosing a website name. These reasons may be divided into various sections:
Trade marking is a marketing strategy in which the company tries to increase the wholesales, the retailer and the distributor level instead of its own sales. It is a part of the marketing-mix strategy, present in Place because this represents where the costumer is going to buy the product.
It is important to distribute your product around the many areas and that’s when trade marking is crucial. Good relationships with the target of the trade marking makes possible to have your product in supermarkets and other retail stores.
In this part, you will need to tell exactly how you tend to get your product out there and how this will help you increase sales. Basically, you need to expand what you already said in Place of marketing-mix, clarifying all strategies used and the techniques of trade marking you applied to your company. You need to say which retail stores you are going to put your product at and all means used to get your product there.
You should also tell the price of your product and the promotions/discounts you want to use for this effect. This is not the same as price in marketing-mix; this is directly to your retail stores and may vary from store to store.
The definition of customer service is an activity which is done to enhance the satisfaction of the customer, before, during and the after sales of product and services of the company. The customers can be varied, according to the type of the products and services provided the company. It can be divided into two parts – services provided by the sales representative and self service.
When a sales representative or service engineer helps you, it is first type of service. When you shop at internet sites, it is the self service. Customer service is important for the companies, as the level of customer service can make or break a company. With a single major service problem, the trust of the customer is undermined in the company. The companies, which have an excellent customer service department, achieve a high level of customer satisfaction. Consequently, they also achieve a high level of sales.
As we have seen the importance of customer service in an organization, planning the customer service is a major part of the business plan. When you decide the nature of the product, manufactured by the company, you will also have to plan the best way to handle customer service. As customer service is the key to the success of the company.
Public Relations concern itself with the communication between company and public. You can also define it as creating and maintaining the image for the company in public. It takes various forms. Public relations give public exposure by linking the topics of news item and public interest to the company and giving it the third party endorsement. When a company gives press conferences, releases announcements, sponsor various events and sports, it is part of public relations.
Good public relation results enhancement of goodwill towards the company, which in future, results in increasing sales and revenue. When company decides to donate or sponsor some NGO, it is also counted towards the public relations exercise. Public relations are considered a major part in a business plan, as it is supposed to showcase the company’s brand and product in an increasingly saturated market.
When you make a business plan, you have to adopt an innovative strategy, as in today’s market it is very difficult to make a splash in the crowded market. Also there is question of expenses you can afford in order to launch the product in the market. So, there is no doubt at all, that the public relation is a major part of the business plan.
Your brand is your company. The brand is the image you give people when they are buying your product or watching a commercial of your product.
The mission of the brand is to identify your company and distinguish you from your competitors.
Some people don’t know your company, but they know some of your brands. For example, we often associate iPods to Apple but we don’t associate PowerAde to The Coca-Cola Company.
The brand gives meaning to your product; it gives a sense of belonging to your employers and gives you commercial value, making it possible to raise prices when your brand is well-known. That’s one of the things you should say in the business plan.
Essentially, in this section, you will need to:
Describe your brand – everything that makes it great should be pointed out here. Say that your brand raises the good-will of your company.
Tell why you chose it – explain everything in the creation of this brand and its concept.
Say if you are planning on changing it and why is that – give strong arguments if you want to change it. If you don’t want to change, the argument is that you don’t change a winning team.
The package will represent your brand, as it is the first thing people notice about a product.
The design of it must be as good as the brand. You should describe you product’s package in terms of:
In this section, you will need to describe your product’s package in terms of design mainly. Show how your package praises your product and makes it more appealing.
Any business requires that the workforce is kept happy and motivated. This is a section where you detail the facts about various incentives and offers which you plan to concur on your workforce albeit they meet the required criteria. You can include details about:
Keyword list deals with the various keywords associated with your product or business which you would or should target. You should include the following details about the keywords
If you plan to sell or promote a product on the Internet, you would need to include detailed keyword intent analysis of the keyword related with your product. There are certain things that you need to highlight in your business plan with regards to any particular keyword. Are you targeting the keyword just for promotion and providing content for your users who may turn out to be future clients or are you selling some product to the people who are visiting?
Some facts that you need to get in order in your business plan include
Commerciality – does your keyword actually pertain to selling something on site or off site?
Who is searching for that particular keyword and why? This basic question forms the crux of the service that you are going to provide on the landing page of your website. Is the reader of this keyword just looking for some information or is he likely to buy something? If he is going to buy our product via our website then do we need support staff to increase our conversion and infuse trust in the buyer?
Look into the competition – A peek into what your competition is doing can help you garner the feasibility of the keyword. Also, if you were to promote the keyword on Google, what would be the cost pre click that you would have to shell out. All these factors should be discussed in your commercial analysis.
Is there more than one keyword which you can tap into? If yes, then how many and what is the scope of these keywords in concordance with the business plan.
This section deals with the report about the website of your competitor. The details which need to be included in this section are as stated below:
Design, Outlay, Access, Ads – Do they have a good design? Do they run a blog? Are there some supporting websites too backing up their primary website? How many ads they show on their website, if at all they do?
Another aspect to look into before embarking on carving out a web presence for your company and its products on the Internet is the search volume analysis. There are various means by which you can get the data for your business plan.
You can use the data from the Google Adwords internal/external tool to get the data of search volume for the targeted product and related keyword. This serves various purposes:
You get to know the feasibility of the product in the virtual world and how active is the market with respect to that particular product.
It gives your business plan some crucial data with respect to the competition with regards to that particular item.
It also allows you to ascertain the depth of competition for your business plan.
The higher the search volume for that particular keyword, the larger is the customer base. Further, based on the search volume you can analyze the kind of users who are searching for that particular keyword. This can help you in shaping up your product in accordance with the demands of that particular segment. Are there more women or men searching for this keyword? What is the age group? How much time do they spend on the website? What is the conversion rate? Which part of the world provides the maximum traffic? All these questions form the basis of search volume analysis in a business plan.
Apart from the money that companies spend on various marketing tools on the Internet, there are ways in which the website of the company can get free organic traffic too. The simplest way to do this is by getting on the first page of Google results for the targeted keyword with respect your product or website. However, this is not easy.
You would need to look into the competition that the first page result for that particular keyword has and the reputation of websites dominating that webpage. Afterwards, you would need to develop a plan of action for that particular keyword to get your product on the first position. This would require a lot of optimization on your website. Various facets to look into include:
All these factors should be considered in your Google first position cost analysis.
Develop a clear development plan for your business and include all the relevant details about how you plan to use this as a platform for your web marketing endeavors. You can shape out your development plan under various sections like:
After the initial analysis of Google first page has been carried out and sketched in your business plan, you need to chart out the optimization plan for your website. The optimization plan includes on-site and off-site optimization, which in turn is determined by many external factors which need to be looked into. This includes
Include the type of website that you want. Will it be a blog cum website or just static website? How many keyword targeted pages?
What are the on page optimizations factors which you need to take care of? How will you optimize the pages on your website?
Offsite optimization – Is there help available in the office or are you going to use external help and outsource the work? How much time and money would that require?
Customer – What does the customer want? This is an aspect that most websites look over as they solely focus on the dynamics of the search engine and ignore the user aspect of their website. How can you optimize the website for the user to stay with you and ultimately buy a product? Do you need better copywriter or sales copy?
Object of production is product that a company markets to its consumer base. In this section of your business plan, elaborate as to how the manufacturing of the product or service will take place on ground. Also, make sure that you jot down the problem that may arise during the production process.
Elaborate your suppliers and their production levels and prices. If feasible, try to create a relative performance chart of all the suppliers with their strength and weakness in the perspective of your business plan. Also, to increase the investor confidence, draw up a back up action plan in case the suppliers fail you.
The time estimate for production should also be included with the general outline of the production facility. Include the amount of production envisaged and other details such as time period of production etc. Make an estimate of the amount of sales that are expected based on the data at hand.
The next stage is to explain the various control methods in place or your plan to use in the future with regards to your production. Back this up with details of cost estimates, inventory/materials required other special requirements (if any) and feasibility of the object of production.
As per classical economics, there are various agents of production which help in fructifying a business. Make a list of each agent of production in your business plan and how it is going to impact your business. An agent of production could be
In this section, you will need to clarify precisely your method of production. It is needed to know how you fabricate your products. There are a few types of productions:
So you need to explain:
Most businesses require space for functioning which is directly determined by the type of business in question. In this section, you need to chart out the various requirements and facts about the space that your business needs to thrive and prosper.
The time frame measures the times it takes to produce and commercialize a product.
The time frame of your company is divided into these topics:
The sum of all this times will give you the time frame. It means if you buy the materials today, in how many days would you have made a sale. In essence, the time frame is the time passed between your cost and your profit.
Explain all these factors in your business plan. You should also provide the extreme other than the average time and find possible explanations for those facts.
This section indirectly deals with the expected fluctuation of certain revenue streams over a period of time owing to certain factors. You can look into this section from various perspectives.
Fixed Costs – Are the fixed costs associated with business are not certain. For e.g. the rents of a premise may increase or decrease. A look into the past market trends can help you determine the fluctuation levels with regards to rent. Also, some fixed costs like inventory maintenance may come down after a period of time. These should be detailed and mentioned in your business plan.
Buying Power – As the business grows, the demand for the product also increases. This in turn creates a void for more suppliers. Since the volumes of your procurement will increase, you can sketch out a plan wherein you can reduce the procurement costs owning to increase in the buying power. This is normal practice is the corporate world. Mention the expected results and effects of the increase or decrease of your buying power in your business plan.
Managerial Specialization – While starting a business you may need expert opinion on certain areas. However, after gaining some experience, these decisions can be taken by the company staff itself. Hence, this reduces dependency on external agents and also minimizes the costs associated with the same. All these details should be listed in this section. You should use graphs, figures and charts to portray a clearer picture.
Delivery and warehousing of products form one of the last stages of any business in the modern world. In your business plan include details and facts about how you plan to address this crucial area of your business. You may divide this into various sections such as:
General outline – Include details on how you plan to go about the upkeep and delivery of your products. Make a detailed delivery chain line that the product may pass through and finally reach a customer.
Delivery methods – List out the various methods you are using for delivery. Are you using your website to sell products and ship them directly? What about the salesperson you are going to use and how many of them? Include in depth detail of various agents you are going to use in ensuring that you product is delivered effectively to the customer
Time Frame – Divide your delivery methods into various time frames for completion of various stages. How much time does it take to reach a retailer and how early do you need to replenish the stock? All these time factors should be included under this section.
Warehousing costs and time period – What are the costs involved in warehousing and how long does a product remain in warehouse before being discharged? These facts should come under this specific header.
Every product manufactured undergoes various inventory control procedures before it reaches the market. This varies with each business and you should include the following details about the various sections of inventory control in your business plan.
Apart from these, include details about how you plan to clean out old inventory and create accountability on part of your suppliers.
For the formation of the corporation or any company, you have to apply for many documents at the appropriate govt. offices. After the approval, these documents form a part of incorporation documents. The documents include Charter of Incorporation, which gives the purpose of the business, main address of the concerned business, the type and number of the shares issued.
The second document is the permission for the name of the company. Other documents include the corporate bylaws, which are applicable for the company’s long-term administration. For e.g. some laws are applicable to, when and how the annual shareholder meeting will be held. How the different authorities will be divided at the top. Some laws also pertain to the conduct of the board meetings. These documents are vital to the corporation, as they relate to the basic groundwork of the corporation.
When you think about doing business, first of all you have to apply for the incorporation documents. After you get the permission, you can go for the further steps. When you make a business plan, you have to attach a copy of the incorporation documents, as these documents give all the information regarding the company or corporation, which can be verified.
A fed tax id or the federal tax id is an exclusive number issued by the IRS authorities in the US. You should include the following details about the fed tax id.
The need – Does your business need a fed tax id? Normally, it is required by for any business which provides products or services which are taxable.
Importance – Every paper that you file with the government for any kind of leverage or tax payment will require a fed tax id.
Getting a fed tax id – Include details on how you plan to get a fed tax id number. Are you going to apply online or call up a local office? Also, estimate the time that it may take to get an ID for your business. To initiate the process of getting a fed tax id, all you need to do is register at the IRS website or contact the local IRS office directly.
A business plan needs various license clearances in order to function. There are different types of licenses required for the business under various categories. Here are some of the various licenses which you may require depending on your business.
Business operation license from the city where you business will operate.
EIN or federal number
Fictitious business name permit (also known as the DBA)
Zoning and land use permits
Health department permits
Sales tax license
Fire department permits
Special – state issues permits – This normally varies from state to state.
Federal business license or permits
Professional or Occupational licenses
These permits are issues once the building surveyor has inspected the premises and rendered them fit for the occupation or in other words the building or premise is safe for use.
To get an occupancy permit, you need to send an application to the building surveyor who inspects the premises. Normally, the surveyor requests for details about the building as submitted by the constructor before giving the final permit.
On every item sold by your company, sales tax is levied on almost every single item sold. A sales tax number is required beforehand, for any business that sells products. Other details such as remitting the money to your state, collecting the tax and reporting can be sought from the treasury department of the state.
Your business license is typically a state issued document that states you have made the appropriate filings with the state to allow you to conduct business. You will need to include a copy of that license in your business plan.
If you have already secured a lease you would want to include a copy of that lease in your plan. If you have received quotes for potential lease sites you can include those.
If you plan of running a business that requires a lot of raw material and other related stuff from various suppliers, then you ought to maintain all the details about the supplier contracts that you will sign.
Facts – General facts about the contract details should be sketched out.
Time Period – This would specify the time period for the contracts.
Liability – Discuss the liabilities associated with the contract in case of a mishap.
Round this off with details about the suppliers and various items they plan to deliver.
If you had borrowed money from the market or bank over a period of time then include details about the same in your business plan. Include details about the loans which you have acquired, the payment details and the yearly or monthly installment which you have rendered over a period of time.
A personal financial statement is the cumulative record of all the financial activities of your business that you have done or plan to do in the future. For any kind of business, personal financial statement are required to present a clear picture about the finances of a company. The various financial statement which you need to include are:
Balance sheet – This will details facts about your liabilities and assets.
Cash Flow – The amount of cash going in and out of the company
Income statements – These are details about the profit and loss which a company has made.
This section includes details about previous borrowing and repayments of the company. The records are maintained by a credit report and you need to include correct data to the lending company. A credit report is used to assess the willingness of the company to pay back the debt and the schedule of repayment.
If you have been doing business for quite some time, then the business credit report is required to ascertain the reputation of the business by money lenders and the likes. It includes details about your debt payment history, time of payment and other details such as bankruptcy and late payment. A healthy credit report increases trust for a business.
This includes details about all the financial transactions associated with one or many accounts over a period of time. These may include the bank account or credit card or any other statements of some financial institutions. You should generalize these statements for clarification purposes.
These include details about all the bank statements associated with any particular business. Include details about all the bank transactions that have taken place under various bank accounts. Normally, most business have a sizable number of bank account and statements, hence, it is better if these are included under various categories to increase coherency.
Every business requires space for functioning. You may opt for lease or purchase depending on your business. This section includes various details with respect to what the property that you have acquired. Include copies of the contract that you have signed for the space and other relevant details associated with the purchase.
Your company has conducted negotiations to sell the products or some facilities, the terms and conditions have been finalized by the both parties. Now, it is the time to issue letter of intent from supplier. The points which should be covered are the dates of start and end of the contract, the payment of compensation, the issue of warranty if required and the payment method.
Basically, the letter of intent from suppliers covers all the important points, which were agreed in the negotiations. The binding and non-binding of the letter of intent from suppliers, depends upon the wording which is employed in the letter.
The letter of intent from the supplier depends upon the wording which is employed in the letter. As a supplier, you should make sure, the letter of intent from supplier should be non-binding as if any difficulty arises in eleventh hour and you want to cancel the deal, you can do it easily.
Otherwise, the other party in the business transaction may seek a legal solution of the matter. One of the advantages of the letter of intent from supplier is that it shows that the intention behind the business transaction is serious. It also sets all the parameters of the business between buyers and sellers clearly, so that there is no confusion.
Your company has taken the decision to buy a commodity or a company and have finalized terms and conditions of the deal. The next step is to prepare a letter, which is called letter of intent from buyers. This letter can be binding or non-binding on the both parties, depending upon the wordings in the letter.
The document specifies the major points of a business deal, whether it is a small one or a big one. These points include important target dates of business deal and payment method. It also includes agreed price, details of assets and liability, validity of contracts etc.
Essentially, it defines the agreed parameters of the business transaction between the both buyer and seller parties. You have to make it clear, that the letter of intent from buyers is non-binding legally and will be superseded by the purchase or sale agreement.
Otherwise, if there is any problem and you want to back out at the last minute from the sale, the other party can sue you in the court, on the basis of the letter of intent from buyers. The main advantage is that, it shows that the buyer is truly interested in the business transaction.
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