| Note: This is the third and last article in a 3-part series | | | | 3. The Financials. This is yet another piece that so |
| about Writing the Best Business Plan. There are literally | | | | many new businesses and entrepreneurs get wrong! |
| millions of articles, courses, outlines, and information | | | | Every plan should have supporting Financials as one |
| available, both free and priced. In fact, the information | | | | dedicated section of the business plan. However, |
| available is so overwhelming, that it is very difficult to | | | | which financial documents to create and include |
| know where to begin and what to trust! These articles | | | | depends upon the audience and purpose (or type) of |
| are designed to give practical, useful, and valuable | | | | the plan. What is great is that a lot of the very best |
| advice about how to get it done. | | | | resources for building financial reports are completely |
| The 5 Major Points About Writing The Best Business | | | | free!a. If the business plan's purpose is a capital |
| Plan | | | | investor, or to get a commercial loan of some kind, my |
| In Part One, we looked at purposes and types of | | | | advice would be to seek the advise of a SCORE |
| formal business plans; the purpose dictates the type of | | | | representative, and/or someone with direct knowledge |
| document to construct. All executives, bankers, | | | | of the requirements!b. At the very least, a Sales |
| investors, and business leaders agree that every | | | | Forecast, Cash Flow Projections, Income Statement, |
| business should have a formal business plan that is | | | | Balance Sheet, Key Performance Ratios, and |
| tailored to the desired purpose and result. | | | | Break-Even Analysis should be provided.c. Additionally, |
| Many new businesses - and many entrepreneurs - do | | | | most often investors and bankers are going to desire |
| not understand how to properly prepare to write an | | | | private financial information on the owner(s) as well. |
| effective plan. The rule of thumb is this: "Proper | | | | They might also want to see a spreadsheet or chart |
| planning prevents poor performance!" | | | | showing the Funds Required and Timing, and perhaps |
| There are 5 Major points to consider in preparing to | | | | Revenue Calculators based upon the products or |
| write a formal business plan: | | | | services of the business.d. Double check to ensure |
| 1. Know your outcome and content. Who is the | | | | that all references made to performance numbers (in |
| Business Plan being written for, what is the proper | | | | the body of the plan) match exactly to the supporting |
| scope, content, resources, and what is the desired | | | | financial documents! |
| result? These points were covered in Parts One and | | | | 4. The Appendices, Exhibits, and Addendums. The rule |
| Two of this article series:a. Is it to attract an investor? | | | | here is don't over do it! Perhaps you might include a |
| Plan should be a "brief sales piece" geared directly | | | | library of direct competitors, or a website abstract, or |
| towards the questions an investor will ask.b. Is it for a | | | | Terms and Conditions, or a related legal document. |
| bank loan, SBA-backed loan, or other commercial | | | | Even so, only provide documentation directly |
| loan? The plan should then cover the information a | | | | supporting the plan. Too much is not necessarily a |
| banker would want.c. Is it just for the business owner | | | | good thing. |
| and to serve as a road map?d. Is it for multiple | | | | 5. The Executive Summary. The Executive Summary |
| purposes, or to be used for various ends? Consider a | | | | is the first section of a great business plan, and yet |
| "parent" plan or targeted plan(s).e. With each type of | | | | very often its vital importance and effectiveness is |
| business plan, seek preparation that fits exactly within | | | | overlooked.a. I recommend that this section is written |
| the purpose, desired result, and industryf. Various | | | | last and then inserted at the beginning.b. As the |
| business plan templates are freely available at the | | | | document is written, notes, information, and data can |
| SBA website. | | | | then be set aside (copied) that are perfect for inclusion |
| 2. The writer. Be sure that whoever writes - or is hired | | | | in the Executive Summary.c. The Executive Summary |
| to write - your business plan is the right person for the | | | | is like a mini business plan and should directly serve the |
| job. The same way you would seek an experienced | | | | purpose, plan type, and result desired. It should be as |
| carpenter of construction contractor, you should seek | | | | brief as possible, and yet as inclusive and persuasive |
| a writer; ask questions, view samples, get references, | | | | as possible. |
| etc.a. If the writer does not ask you about the | | | | In conclusion, in this article we have taken a look writing |
| audience and intent of your plan right at the start, | | | | a formal business plan and pulling all the data together. |
| throw up a red flag! This is not a good sign.b. If the | | | | Once again I will state that it is my suggestion is to |
| writer is a large corporation, chances are very good | | | | carefully research when hiring someone for this |
| you will not get enough personalized service; often you | | | | important job. As with anything positive, it is best to |
| are just another account and you do not want a | | | | consider your desired result before taking action. |
| "cookie-cutter" business plan at all. Be very careful | | | | The task of preparing and writing a business plan can |
| about hiring a big company.c. If the writer does not | | | | seem like a daunting project. However, if it is taken |
| have personal business experience, or specializes in a | | | | piece-by-piece, and assembled with care - using readily |
| certain area, or does not have a comprehensive | | | | available resources and tools - then it is not such a |
| knowledge of your business variables, do not hire him | | | | huge undertaking and can definitely help to serve your |
| or her. | | | | purpose. |