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Before starting to prepare your plan, ask yourself the following questions:

1) How detailed do you want your plan to be?

The size of your plan can range from that of a summary plan (usually less than 20 pages) to a full plan (should be no bigger than 50 pages).

2) Have you gathered the information necessary to write your plan?

This includes, but is not limited to:

a) A current resume of yourself and any other principal or officer that will be involved in the operation of the business.

b) Information about the location where your business is or will be operating.

c) Your strategy to make this business a success, this is where you articulate the ways and means that you are going to use to make this business great. I am not a fan of “mission statements” you can go ahead and create one if you so desire, but I would rather read the specific steps that you are going to take to make that business make a profit, and at the same time provide that “unsurpassed service or goods”.

d) Information about your prospective customers, competition and other stakeholders in your business.


A. The Cover Page

I have seen plans without a cover page, but most do have one. In my personal opinion it is just good form to do one. If you do, it makes it simpler for your loan officer to contact you. I have had business plans sent to my department where a loan application has not been filled out, or a personal financial has not been included and we find it difficult to get back to the prospective borrower because we lack a telephone number.

Your cover page must be titled “Business Plan” and have:

  • Name of the Business
  • Address
  • Contact Name
  • Telephone Number
  • Fax Number

B. The Summary

Right after your cover page you must create a summary, let’s call this the “cheat sheet” for the members of your audience that do not have the attention span to read your whole plan. This is the most important part of your plan, because it allows you the opportunity to grab the attention of the readers and entice them to read further.

The summary might be the first thing that the reader sees, but the final version should be created after you have written the other sections of your plan so that you are sure to include any and all ideas that might come up during the writing of the plan.

Your lender or investor likes to see “hard data” backing up your assertions, use industry statistics, market research, demographic information, and other documenting information to back up statements you make in your summary

Be sure to include a synopsis of the business concept, financial features, financial requirements, current state of your business, when it was formed, principal owners and key personnel, and major achievements.

C. Introduction to your Business

This is the part of the plan that allows you to familiarize the reader with your business and your industry. You might know everything that needs to be known about your particular industry be it an antique store, a restaurant, a body shop etc., but your audience does not.

make sure that you include:

  • An overview of your industry (how do you make money, how fragmented it is, who dominates it, etc.,)
  • An overview of your business (where does your business fits in this industry)
  • Describe your products or services.

Your Markets, Your Customers, Your Competition and Your needs

If the first part of your business plan was the appetizer, this part is the entree, the meat and potatoes of your business plan.

D. Market Analysis

This is where your plan has to get specific, there are a lot of resources that can be accessed in order to provide the details that are demanded of your plan. Your public library should have census information handy. (granted that it will be almost ten years out of date because the 2000 census info won’t be available until 2001-2002 ), do not go overboard with census data or you might fall in the pitfall of creating nothing more than a demographic report.

Your analysis should mention your target market, and expand on its size and how your business would be able to service it. Let me give you an example:

a) You are opening an ethnic Greek store. You should back your analysis by mentioning the way that ethnic related foods and sundries are increasing in the overall American market, maybe you are of greek descent and can input some view, maybe there is a greek orthodox church nearby, and the neighboorhood is know as little Athens.

Your analysis should mention the competition, I saw one business plan less than six months ago that forgot to mention that very important factor. The borrower was proposing to open a high class hair salon in an upscale neighborhood, they did forget to mention that across the street from the proposed location a similar business was already open. They also forgot to mention that in a two block radius there were two national chains that provided the same service.

E. Your Needs.

These are not limited to money, they should include any equipment, specialized labor, any particular thing that a business in your industry needs. Even if you don’t have needs for specialized equipment oir labor needs you should go into some detail as to how you will meet the ones that you do have.

You should include the distribution of your loan request monies here.

F. Management.

This part should go into detail about the ownership, anybody involved with the company that might be advising you, and the outside consultants that support or will support your opperations (ex. the lawyer that helped you incorporate, the accountant that will help with the books, etc.)

Financial Statements

This part will tie everything together by providing the numbers that your prospective lenders want to see, but be careful not to paint a picture that is too rosy, this will turn off your potential lenders and investors that might deduce that your expectations are unrealistic.

G. Financial Statements

This is the only part of creating a business plan, where I think outside help is in order. Hiring an accountant to prepare or at least review your financial statements is recommended.

You will need the following:

– A current Balance Sheet for the Business.

– A Balance Sheet that reflects the impact of the financing that you are looking to get (if the business plan is for a loan)

– Income statement for the first year in operations after you get the loan (break it down on monthly)

– A Balance Sheet that shows the changes after the first year in Business.

– Income statement for the second year in operations after you get the loan (break it down on monthly)

– A Balance Sheet that shows the changes after the second year in Business.

Most business plans do this for 3 or 5 years, The minimun would be two years.

Author: Commercial Loan Underwriter


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