Writing a Business Plan During Lunch

Sam, a young entrepreneur, arrived on time for his appointment with the Small Business Administration advisor at 11:00 A.M., Friday, confident that he was prepared. Impressed with Sam's business concept and PowerPoint presentation, the advisor, Mr. Kincaid, requested a copy of Sam’s business plan to review.

“I didn’t know I needed one,” Sam apologized. “Not yet, anyway, with just starting my business and all.”

Briefly considering how rich he would be if he had only collected a dollar from every small business owner without a business plan that he had seen, Mr. Kincaid explained, “Not only is a current business plan necessary for financing, it serves as a roadmap for your successful enterprise and a yardstick by which you can measure its growth.”

“I’ve heard that no one really reads business plans.”

“Interested parties may glance through a business plan, but they will surely read the Executive Summary and pay careful attention to the Financials,” advised the advisor.

“So, what goes into a business plan and how do I write one?”

“In brief, there are seven steps to preparing an effective business plan, and you’ve already completed the first by gathering all the information about your business, which you presented to me, along with the supporting documentation.

“Next, organize the information into these four key areas: description of your business, marketing, finances and management.

“The third step is outlining your business plan into three sections.

“Section I describes your business:
A. What do you do and how long have you been doing it?
B. What is your unique selling point, or why is your business better than your competitors’?
C. Where will you conduct your business?
D. What is your Mission Statement?
E. What is your exit strategy?
F. How and to whom will you market your business?
G. Who are your competitors?
H. What are your operational procedures?
I. Who are your key personnel and how are they qualified for their positions?

“Section II contains your financial data:
A. A statement of your capital requirements
B. A list of your present capital and assets
C. Loan and line of credit applications
D. A balance sheet
E. A breakeven analysis
F. Income projections (profit & loss statements)
G. A three-year projected summary with monthly details for the first year and quarterly details for the second and third years
H. Assumptions on which the projections are based
I. Your projected cash flow

“Section III provides copies of relevant documentation:
A. Your business license and other legal documents, such as a franchise contract
B. The lease or purchase agreement for building/office space
C. Letters of intent from suppliers
D. Tax returns for the past three years, including personal returns for all principals
E. A resume for each principal

“Step four: Write the business plan by filling in the details as outlined.

“Step five: Write the Executive Summary, which briefly summarizes the elements of the business plan.

“Step six: Prepare a cover page and table of contents (from the outline) and add appropriate graphics, such as graphs and charts.

“Finally, print the number of copies you need, collate and bind together the pages of each business plan.”

“That’s it?” Sam finished scribbling notes.

“You can find examples of business plans and help with the outline on the SBA Website at www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html.” Mr. Kincaid looked at his watch. “Now it’s time for lunch. Sorry that I can’t help you without a business plan.”

Sam utilized his lunch hour to write his business plan on his laptop, copying and pasting the information from his PowerPoint presentation and other files. Then he printed, collated and bound a copy to leave with Mr. Kincaid immediately after lunch. On Monday, Mr. Kincaid called Sam to inform him that his was one of the best business plans that he had read, and that he would be happy to recommend Sam for an SBA loan. Sam’s current business plan continues to document the goals that his business accomplishes and chart its healthy growth.