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Business Plan Basics
Alto Software, Inc.
The best way to show
bankers, venture capitalists, and angel investors that you are worthy
of financial support is to show them a great business plan. Make sure
that your plan is clear, focused and realistic. Then show them that you
have the tools, talent and team to make it happen. Your business plan
is like your calling card, it will get you in the door where you'll have
to convince investors and loan officers that you can put your plan into
Once you have raised
the money to start or expand your business, your plan will serve as a
road map for your business. It is not a static document that you write
once and put away. You will reference it often, making sure you stay focused
and on track, and meet milestones. It will change and develop as your
Do I need a business
Not everyone who starts and runs a business begins with a business plan,
but it certainly helps to have one. If you are seeking funding from a
venture capitalist, you will certainly need a comprehensive business plan
that is well thought out and contains sound business reasoning.
If you are approaching
a banker for a loan for a start-up business, your loan officer may suggest
a Small Business Administration (SBA) loan, which will require a business
plan. If you have an existing business and are approaching a bank for
capital to expand the business, they often will not require a business
plan, but they may look more favorably on your application if you have
Reasons for writing
a business plan include:
- Support a loan
- Raise equity funding
- Define and fix
objectives and programs to achieve those objectives
- Create regular
business review and course correction
- Define a new business
- Define agreements
- Set a value on
a business for sale or legal purposes
- Evaluate a new
product line, promotion, or expansion
What's in a business
A business plan should prove that your business will generate enough revenue
to cover your expenses and make a satisfactory return for bankers or investors.
- Executive Summary--features
the highlights of your plan and sells your idea in two pages or less.
- Company Summary--a
factual description of your company, ownership, and history.
- Products (or Services
or both)--describes your products and/or services and how they stand
out from competitive products and services.
- Market Analysis-provides
a summary of your typical customers, competitive landscape, market size,
and expected market growth.
- Strategy and Implementation-describes
how you will sell your product, how you will put your plan into action,
and establishes milestones.
- Management Summary-provides
background on the management team, their experiences, and key accomplishments.
- Financial Plan-contains
key financials including sales, cash flow, and profits.
What makes a successful
- A well thought
- Clear and concise
- A clear and logical
- Illustrates management's
ability to make the business a success
- Shows profitability
How do you write
a business plan?
Sitting down looking at a blank computer screen as you prepare to start
your business plan can be daunting. You may want to look at some alternatives
that will make the process a bit easier.
Hire a Professional
A professional consultant will create the business plan for you, but you
still have to be prepared to think through your business and understand
the underlying concepts in your business idea. You will have to work closely
with the consultant to ensure that he or she develops a good plan that
accurately represents your business or business idea. You can find a list
of business planning consultants at www.planconsultants.com.
Buy a Book
There are many good books on the market that will help you to understand
what needs to go into a good business plan. You can read Timothy Berry's
"Hurdle: the Book on Business Planning".
Use Business Planning
A good business planning software package will provide you with an outline
for a well-developed, objective-based and professional business plan.
Software packages will remove the problem of starting from scratch by
structuring your plan for you. The software should ask you the right questions
that will pull out the most important underlying concepts within your
business idea. Find
out more about the leading software package on the market, Business
Gathering Information For Your
Business Plan Maintenance
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Design Your Plan to Fit Your Business
Do I need a business plan?
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