What Goes In A Business Plan

What Goes In A Business Plan-85
“They know what you can expect sales to be for that type of business in that market,” Allen says.“If you walk in with a sales forecast 50% higher than other businesses, they are going to know that you are not being realistic, and that’s going to work against you.” Keep it concise: All you need is 15 to 25 pages for a good business plan, as long as the plan is clear, concise and contains all of the relevant information, Allen says.

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But you should also address the various risk factors of the business, Allen says.

“The loan officer is definitely going to want to know that you’ve thought through all of the potential risks and that you’ve mitigated those risks in some way,” he says.

Accuracy is key, so carefully analyze your past financial statements before giving projections.

Your goals may be aggressive, but they should also be realistic.

This section can also highlight the strengths of your business and focus on what sets your business apart from your competition.

[Back to top] If you’re a startup, you may not have much information on your business financials yet.Focus on the key elements of your business plan and avoid getting too bogged down by the technical aspects of your business or using too much industry jargon.You can always put supporting information or other important details in the appendix.It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.“It’s OK to be optimistic if you can justify it,” Allen says.“In general, you don’t want to stand out in a negative way by being too optimistic.” You want to show that your business can generate strong enough cash flow to cover the regular debt payments on a loan.However, if you’re an existing business seeking small-business loans, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.You may also include ratios that highlight the financial health of your business, such as: [Back to top] This is a critical part of your business plan if you’re seeking financing or investors.Business plans range from 20 to 50 pages in length, but, typically, they all contain the same sections.You'll find detailed overviews of what to include within each section by looking at sample business plans and going to online sources.

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