Write Your Own Business Plan

The type of business plan you write depends on whether you're writing the plan for a bank loan (or perhaps a loan from a friend or family member if you're desperate) or whether you're writing the plan for an outside investor.

If you're writing a business plan for the bank, you do whatever the bank wants of course. But as a really good starting point, you can work from the business plan template provided by United States federal government's Small Business Administration Web site. Here's my annotated version of that outline:

I. Overview of the Business

A. Description of business's products or services

B. How the business markets or sells its products or services

C. Who the business competes with--both directly and indirectly

D. Special operating procedures used by firm

E. Descriptions of people working in firm (both headcounts and types of employees)

F. Risk management issues (such as insurance, bonds, and so forth).

II. Financial Information

A. The completed loan application and any supporting information

B. List of fixtures, equipment and other "hard collateral" items that'll secure the loan

C. Break-even calculations to show how much revenue the firm needs in order to not lose money

D. Pro-forma financial statements including a projected profit and loss statement, balance sheets, and a statement of cash flows. (Commonly, if they're required, you prepare pro forma financial statements on a monthly or quarterly basis for three or five years.)

E. Modeling assumptions you base your financial projections on

III. Supporting Documentation

A. Tax returns of business (if an existing firm) and of business principals for the last two or three years

B. Franchise contract and any related documents (if applicable)

C. Copy of lease agreement

D. Copy other significant legal documents

E. Resumes of owners and key personal

F. Copies of any material purchase orders, customer or vendor contracts, letters of intent from suppliers, etc.

 

You can, if you want, copy the preceding outline to a word-processor document and then, as appropriate, write up a paragraph or two for each lettered section above. Note that for the "III. Supporting Documentation" section, you simply include readable copies of the original documents like tax returns, contracts, and so on.

Tip: A three-ring binder is probably a pretty good way to organize the elements of a business plan you're preparing for the bank.