Renee Hode, director of Central Piedmont Community Colleges Institute for Entrepreneurship and Small Business Center, spoke with Shop Talk about what to include in a business plan. Here are her edited comments.
Your business plan should tell your story. Focus on an executive summary, which hones in on what your business is offering. Do you have a product or service? What need is it going to meet in the community? Whos going to buy it, and why? How will the business make money?
If your business involves a product or an invention, explain how its different from other available products. If its a service, describe the service and how youll provide it.
Write a concise executive summary that gives its reader a good understanding of your business. Include your goals, vision and steps to execute the goals. This will be what you use to pitch your business. Marketing will be the next part of the plan, including a lot of research on market analysis. Whats the industry? Whats its size and dollar sales volume? Whos the target customer?
Most importantly, a business plan must include financials. And your numbers need to make sense. Financials must include startup and operating costs, cash flow, and forecasts on when your business will be profitable.
If you are presenting this plan to lenders for a loan to start a business, financials are a key factor. All expenses go into deciding your loan amount. Also, show what you (as an owner) are investing in the business. If youre looking for a loan, you need to have at least 30 percent in your own investment before lenders will be able to assist you. Youve got to share the weight of the burden and the risk.
The business plan should include the businesss legal structure. Include details about your team. As a small-business owner, have a management or advisory team in place to help you. Advisory team members include accountants, lawyers, counselors and other people who will work with you. Look for individuals you trust, who understand the business or industry, or who have some other level of expertise that complements your skill set.