How to Write a Business Plan
by Catherine J. Rein, MBA
Sample Memorandum
of sale (business / website)
Sample nondisclosure / confidentiality agreement
So you’ve 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
don’t 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. It’s 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 it’s amazing how many new (and
experienced) business owners don’t 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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