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How to Write Your Business Plan

Guidelines for Business Planning

The business plan is your pathway to profit. It can mean the difference between success and failure. A business plan with goals and actions can guide you through turbulent economic times with alternative channels which you can fall back upon as changes dictate.

Through the development of a business plan, you will be able to identify your areas of strengths and weaknesses and spot opportunities and threats which may loom on the horizon. You will review the competitive conditions of the marketplace and isolate opportunities and situations that seem advantageous to your business.

The business plan will communicate your understanding of the industry in which you operate, the competitive situation you face, the capability of your management, the suitability of your location, and the capacity of your particular business. It will make reasonable assumptions and forecasts of your expectations concerning sales, expenses, cash flow, and goal attainment.

Letter of Transmittal

You should enclose a letter explaining why your business plan is being sent to the addressee and what he or she is expected to do with it. The contents of the letter of transmittal typically include:

• The identity and purpose of the business
• A very short history of the business
• The purpose of the plan (e.g. financing proposal)
• Identity of the person requesting money
• The amount and type of financing required
• The amount of equity already invested in the business
• The productive purpose for which the money will be used
• When the money will be needed
• The goals and market potential of the business with the new funds
• Collateral and other security offered
• Title Page

You should start the plan with a title page which identifies the name of the business; title of the plan; date, copy and revision number, if applicable; and instructions regarding confidentiality.

Next Section - Executive Summary/Table of Contents

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