How to Write a Business Plan

1. How to Write a Business Plan Ron Nelson Island County EDC (360) 678-6889 icedc@whidbey.net

2. Why Planning is Important • Suppose you lived in New Hampshire and wanted to drive to Texas, would you use a map or GPS? • K-12 education is a pre-defined plan • Baking / cooking requires a plan - recipes • Planning will help shape your destination and provide the best road to get you there • Plans communicate to investors, suppliers, employees and others interested in your business

3. Snapshot of a Business Plan • Typical Business Plan Components • Table of Contents • Executive Summary • Business Description • Definition of the Market • Description of Products and Services • Organization and Management • Marketing and Sales Strategy • Financial Management • Appendices

4. Table of Contents Components of the Business Plan • Lists key sections of the business plan • Used to quickly locate specific sections • Brings organization and structure to the plan

5. Executive Summary Components of the Business Plan • Purpose • Interest someone to read rest of plan • Most important section of the plan • Write last • Provides an enthusiastic snapshot of your company • Less than one page

6. Business Description Components of the Business Plan • The Company Vision: • Outlines what a company wants to be • Futuristic: memorable and engaging expression of hope and inspiration • Staying status quo is moving backwards

7. Business Description Components of the Business Plan • The Mission Statement: • Brief statement about who the company is and what it stands for • Example: Google’s mission statement is: Organize the world’s information and make it universally accessible and useful.

8. Definition of the Market Components of the Business Plan • Describe your business industry and outlook • Define specific needs you will satisfy • Identify targeted customers • Develop customer profile • Determine market size • Demographics

9. Research • North American Industry Classification System • Find the NAICS • http://naics.com/search.htm • WA St Dept of Revenue • Determine local statistics • http://www.dor.wa.gov • Google searches

10. Research – Sno-Isle • Sno-Isle Libraries Business Resourceswww.sno-isle.org > Research > Business and Business: Small Business Start-Up • Small Business Resource Center: Sample business plans, how-to tutorials, business publications   • A-Z: Market research and trend analysis • Business Plans eBookshelf: Business plan templates • Learning Express (in eLearning): Microsoft Excel tutorials • Legal Forms (in Legal Info): WA State legal form templates   • Free wi-fi and meeting rooms at your local library • Information professionals available in person, on the telephone, and online to help with your business research

11. Description of Products Components of the Business Plan • Identify and explain product pricing • Describe your products and services how they are competitive • Reference applicable graphics and brochures

12. Organization and Management Components of the Business Plan • Descriptions of how the company is organized • Legal form of ownership • Explanation of how things get done • Required licenses and permits • Washington State Department of Licensing (Universal Business Identification Number) • Internal Revenue Service (Employer Identification Number) • Biographies of key managers / leaders

13. Marketing and Sales Strategy Components of the Business Plan • Marketing is the process of creating customers • Research is the foundation of marketing • Who are my customers and potential customers? • Where do they live? • Am I offering the kinds of goods or services they want at the best place, at the best time and in the right amounts? • Are my prices consistent with what buyers view as the product’s value?

14. Marketing and Sales Strategy Components of the Business Plan • Creating a marketing strategy • Identify customer groups you can best serve • Understand customers needs • Always consider change

15. Financial Management Components of the Business Plan • Key Financial Statements • Cash Flow Statement • Balance Sheet • Income Statement

16. Financial Management Components of the Business Plan • Cash Flow Statement • Monthly statement of cash on hand, incoming cash and expenses • Used to determine projected working capital availability and shortages

17. Financial Management Components of the Business Plan • For a New Business • Estimate of start-up costs • Projected cash flow statement (12 months forward)

18. Financial Management Components of the Business Plan • For an Existing Business • Balance sheets (last 3 years) • Income statements (last 3 years) • Cash flow statement (12 months)

19. Financial Management Components of the Business Plan • If Applying for a Loan • Current personal financial statement on each principal • Federal tax return for prior year

20. Appendices Components of the Business Plan • Company brochures • Resume of key employees • List of business equipment • Copies of press articles and advertisements (if available) • Pictures of your business location and products • Information and/or data supporting the growth of your industry and/or products • Key business agreements such as lease, contracts, etc.

21. Next Steps • Put what you’ve learning into action • Prepare a draft business plan • Include 12 month cash flow projection • Plenty of Excel templates available • Discuss your draft plan and any questions you have with a business mentor, coach, or other seasoned business advisor • Use the information you’ve received to prepare a more finished product

22. Financing • http://www.kauffman.org/about-the-foundation/kauffman-sketchbook.aspx

23. Free Services • The EDC • Demographics / business data • SCORE (Service Corps Of Retired Executives) • Confidential small business counseling • Bring business plan and 12 month cash flow projection • http://www.scorechapter591.org/ • Small Business Administration • http://imedia.sba.gov/vd/media1/training/YoungEntrepreneurs/player.html

24. How to Write a Business Plan Questions?