Making a Business Plan:
If you are goint to apply for any form of loan or grant you will almost certainly be required to prepare a formal business plan. A business plan can be one of the most important things you can do to give your business the best chance of success. You should always prepare a formal business plan even if one is not required. The business plan make your take a realistic look at exactly how your business will make money.
The Small Business Administration has a free online template you can use to make a draft of your business plan. It covers the essential parts of a business plan:
- Executive Summary
- Business Description and Vision
- Definition of the Market
- Description of the Products and Services
- Organization and Management
- Marketing and Sales Strategy
- Financial Management
One of the more important (and difficult) parts of completing the plan is to find the necessary trends and statistics for the business you want to start. You can't figure out how much you will need to start the business or how much you can expect to make without these statistic. For many industries, you can get these statistics for free at Bizstats.com. If, for example, you wanted to open a tax preparation or accounting business, you could on average expect to have officer compensation of 16.39%, a net profit of 14.3%, expect to pay rent equal to 0.05% of gross revenue (because most work out of their homes) and to spend 0.64% of gross revenue on advertising. If you need to make officer compensation (you) and net profit of $100,000.00 you would realistically need to have gross revenue of $325,000.00. If the average client pays a $500.00 fee, you would need to get and service about 650 clients to meet your goal.
The business plan can be intimidating. Don't let it hold you back but don't proceed without it. You can get free technical help with your business plan directly from all of the government agencies and their partners that provide help in getting financing.