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Essentials for Creating a Successful

Business Plan
By Atlas Business Solutions, Inc.

www.bptools.com

What is a business plan?

A business plan is a written description of what you plan on doing and how you plan on doing it. Depending
upon who’s going to read your business plan, and what you are going to use it for, your business plan will vary
in form and length.

Whenever entrepreneurs hear the term “business plan,” they envision a one-inch thick document crammed
with every possible piece of business-related information. This is not always the case. A business plan has
many uses, which dictates what information, and how much of it, you should include in your business plan.

For example, a business plan could be used internally to identify goals and strategies to key employees. Since
people inside your business may already be familiar with your business and how it operates, such a business
plan may be much shorter and less formal.

However, most entrepreneurs write business plans to obtain funding. Since many investors want to know the
“ins” and “outs” of your business, your business plan needs to explain your products and services, markets,
competition, industry, operations, and opportunities in greater detail. This could result in a pretty hefty
nancial forecast.

Before writing your business plan, you will need to identify who is going to read your business plan and your
reasons for writing it.

Who needs a business plan?

Every business should have a business plan of some sort. Without a plan, a business may lose focus of its
goals, which could result in lost market share, customers, key employees, and money. If you don’t know where
you want your business to go, how will you know if your business is moving in the right direction?

A well-thought-out business plan can be the most important factor in the success of your business, so the task
of creating a business plan should not be taken lightly. Most entrepreneurs write business plans to obtain
funding. But more than just a tool for raising money, a business plan can help you determine if your business
ne your business goals, and decide the best methods for achieving
those goals.

ciently. Just as a carpenter needs a blueprint, an entrepreneur needs a business plan, or

“road map,” for building, growing, and sustaining a successful business. Here are just a few things a business
plan can do for you:
 Essentials for Creating a Successful Business Plan

• Identify if there is a market for your product or service.

• Determine your competition and identify advantages.

• Show you if your business idea is worth pursuing.

What should a business plan include?

A business plan should include all the important matters that will contribute to making your business idea a
success. These generally include the following:
• Your basic business concept.
• Your products and services and their competitive advantages.
• The markets you’ll pursue.
c actions you plan for implementing it.
• The background of your management and key employees.

Since business plans vary greatly in length and detail, the amount and type of information contained in a business
plan also varies. Always keep in mind your audience’s time is extremely valuable. Don’t waste a reader’s time by
ll pages. Your business plan should contain just enough information to
accomplish its goal. No more. No less. Business plans are often 15 to 20 pages in length, but your plan may be
shorter or longer.

Most business plans are presented to a reader in an outline form, divided into major sections (or chapters) and
subsections. This layout makes a business plan easy to read and easy to navigate. Below is a list of the sections
often included in a comprehensive business plan:

Executive Summary
• Business Opportunity
• Product/Service Description
• Current Business Position
• Financial Potential
• The Request

Company Background
• Business Description
• Company History
• Current Position/Business Objectives
• Ownership

Products
• Product Overview
• Competitive Analysis
• Suppliers and Inventory
• Research and Development

Services
• Service Descriptions
• Competitive Comparison
 Essentials for Creating a Successful Business Plan

• Service Delivery
• Research and Development

The Industry, Competition and Market

• Primary Competitors
• Market Size

Marketing Plan
• Competitive Advantage
• Pricing
• Distribution Channels
• Promotional Plan

Operating Plan
• Location
• Facility
• Operating Equipment
• Suppliers and Vendors
• Personnel Plan
• General Operations

Management, Organization and Ownership

• Management/Principals
• Organizational Structure
• Professional Consultants
• Ownership and Boards

Goals and Strategies

• Business Goals
• Keys to Success
• Future Plans

Financials
• Beginning Balance Sheet

• Cash Plan (Years 1-3)

• Balance Sheet (Years 1-3)
• Ratio Analysis (Years 1-3)
• Assumptions

culty when it comes to writing the text portion of their business plan, as
nancial portion of a business plan

nancials are,
 Essentials for Creating a Successful Business Plan

nancials estimate how well your business will perform under certain assumptions. For example,
what happens to your business if it sells 10,000 widgets, or 20,000? What happens if your business acquires
nancial projections: (1)
most likely; (2) best case; and (3) worst case. These scenarios let readers know what will happen to your business
if everything goes as planned, or if business is much better or worse than expected.

nancials most commonly included in a business plan are a beginning balance sheet and three years’ worth
t and loss projections, cash plans, and ratio analysis reports. Financial projections are not
only essential for potential investors who need to see how you are going to repay them, they help you determine
nancial sense. Below are summary
nancials commonly included in a business plan, along with a link to a sample. Each sample is
followed by a line-by-line explanation of the information contained in the report.

Beginning Balance Sheet

nancial snapshot of your business at the beginning of your forecast. It lists your
business’s assets, liabilities, and owners’ or stockholders’ equity. Assets are anything your business owns that
has monetary value, liabilities are the claims of creditors against the assets of the your business, and equity is
calculated by subtracting your liabilities from your assets. Basically, it shows how much you have, how much you
owe, and the difference is your equity level.

Please click on the link below for an example of a beginning balance sheet, along with a detailed description and
explanation of the items commonly found on a beginning balance sheet.

Beginning Balance Sheet Sample

Balance Sheet

Typically, at the end of every month of operation, a balance sheet is built showing how the operation of the
business affected the assets, liabilities, and equity of the business.

Please click on the link below for an example of a balance sheet, along with a detailed description and explanation
of the items commonly found on a balance sheet.

Balance Sheet Sample

t and loss projection (P&L) shows you how much revenue your business will generate from the sale of
products and services and lists your operating expenses. Revenues minus expenses is how much income your
business produces. Remember, income does not equal cash. To see how much cash your business will produce,
ow projection.

t and loss projection.

 Essentials for Creating a Successful Business Plan

Cash Plan

A cash plan shows you how much cash is coming into your business and how much cash is going out. It also
shows how much cash will be left over or how much additional cash you will need to pay your expenses.

Please click on the link below for an example of a cash plan, along with a detailed description and explanation of
the items commonly found on a cash plan.

Cash Plan Sample

Ratio Analysis

nancial performance of your business to the actual businesses

nancial information for ratio analysis include Dunn & Bradstreet
Corporation, Moody’s Investors Service, Inc., Standard & Poor’s, and Robert Morris Associates.

Please click on the link below for an example of a ratio analysis, along with a detailed description and explanation
of the ratios commonly found on a ratio analysis.

Ratio Analysis Sample

See how easy it is to create your own business plan with Ultimate Business Planner® from
Atlas Business Solutions. It’s the fastest and easiest way to write a winning business plan.
To learn more, visit www.bptools.com or call 1-800-874-8801.

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