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Looking for insight and practical advice on how to write a business plan - Writing a business plan
 

.. should create a plan that outlines your goals, expected costs, marketing plan and exit strategy. A business plan is your road map ...Here is a quick nine-step guide ... how to write a business plan

 

Whether you're just starting out, need funding or want to monitor the health of your business, creating a business plan is your first step on the path to success...How to create a business plan

What goes in a business plan? The body can be divided into Description, Marketing, Finances,  Management
... Write a Business Plan

 



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How to Write a Business Plan

by Catherine J. Rein, MBA
Sample Memorandum of sale (business / website)

Sample nondisclosure / confidentiality agreement

So youíve decided to start a business. You have the million-dollar idea, or used one of ours, you have the time and passion to take the project forward, but now you need investment dollars and your investor wants to see a business plan. Even if you donít intend to get outside financing, a business plan is a great tool for running a business. The following guidelines will give some direction.

10. Start With The Financials

Most business loans (like from the SBA in the US) and other sources of funding for new businesses require either a 3-Year or 5-Year set of financial statements. These pro forma financial statements include a Profit & Loss Statement, a Balance Statement and a Cash Flow Statement.

The financial statements can be a little daunting for an entrepreneur unfamiliar with the financial side of a business, but so much of the business plan will flow from these numbers that it is important to start here. Use these templates and spreadsheets to assist you or get help from a professional. More on this later.

The financial statements include a forecast of predicted income and predicted expenses. Itís vital to think about these numbers. Where are revenues coming from? What are my start-up expenses? Will I need to pay for rent, insurance, utilities for several months before I have revenue coming in?

9. Clearly State Your Financing Request And Return On Investment

This would seem like common sense but itís amazing how many new (and experienced) business owners donít have a clear picture of their financing needs or what the return on investment will be for the investor. State this number clearly and in several locations throughout the business plan.

8. Clearly State Your Assumptions

This is for your own benefit as well as your reader. Six months or a year down the road you might not remember why you chose a particular revenue goal. Clearly documenting your assumptions and sources will help you review your forecast and make adjustments. Some examples include:

1. Revenue Assumptions
∑ Revenue in the web hosting business will grow to an average $6,500 per month in 2009.
∑ Revenue in the managed hosting business will grow to an average of over $8,000 per month in 2010.
∑ Sales Revenue from PPC in April 2010 will average over $5,000 per month. Sales revenue in 2011 will average over $8,000 per month.
∑ Sales Revenue in managed hosting will grow 10% a year in 2012-2013.
2. Cost of Goods Assumptions
∑ COGS for the hosting business - including servers, bandwidth etc - will remain constant at 38.7%.
∑ COGS for the managed hosting will average 61.8%.
3. Expense Assumptions
**Listed as % of sales revenue

Expense/Month VPS
Hosting
Managed
Servers
Salary & Benefits 6.6% 6.7%
Rent (building & equip) 1.9% 2.2%
Utilities 1.1% 1.5%
Insurance 1.9% 1.3%
Taxes 1.2% 2.2%


7. Build A Table Of Contents

Writing a business plan can quickly become overwhelming when thinking of all the details that need to be included. Lay out a common sense table of contents and organize your thoughts on running the business.

As an example:

I. Executive Summary
II. The Company
III. The Business Concept and Need
IV. The Market
V. Growth Strategy
VI. Management and Personnel
VII. Risk Factors
VIII. Investment Return Strategy

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