Wednesday, January 3, 2001
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Wednesday, January 3, 2001 |
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Start the year with a smart plan For small business owners, the new year is an opportune time to create or update your company's business plan. A well-developed business plan is crucial when looking for financial backing or strategic partners. The Georgia Society of CPAs provides the following advice for creating a critical road map for business growth. While format and content for most business plans are similar, you should distinguish your plan by those characteristics unique to your business, as well as its life cycle position. Here are some of the basic components of a comprehensive business plan. Executive summary: More than merely an introduction to your business, the executive summary is a capsulated version of your entire business plan, including all key points and critical information. The executive summary is frequently the first place that readers will go to learn about your business, so it is important that it be written clearly. Business description: In this section, you should clearly identify your business's mission, goals and objectives as well as provide information about the company's history, its current status, and its future potential and growth opportunities. You also want to give a comprehensive description of the business, including the company's location, physical facilities and business structure. For instance, are you a sole proprietor, or is the business a partnership, corporation, or a limited liability company? Product and/or service description: Try to describe your product and/or service in vivid detail and explain its benefits from the customer's perspective. Explain how the product or service is produced and at what cost, including the rationale behind the pricing strategy. Marketing: Marketing plays a vital role in successful business ventures. Be sure to explain your marketing plan in detail and include the results of any market research you have conducted. Identify the market and show where it is headed. Is the industry growing and, if so, how quickly? Demonstrate demand for your product or service by profiling the typical consumer and discussing industry trends. It's also important to describe how you plan to sell your product or service. Are you looking at direct sales, mail order, telemarketing, e-commerce or considering some combination of these? How you advertise and promote your products could mean the difference between success and failure. Competition: Your business plan needs to address competition. Be sure you know exactly who your competition is. Also, it's important to include information about the competition, such as the results of any research that you or another entity conducted on your industry. How does your competitor's products or service differ from yours? What are your competitors' strengths and weaknesses? What strategies do you have in place for dealing with the competition? Management and operations: As you prepare this section, keep in mind that people are the most valuable business asset and many potential investors view the management team as a critical predictor of a successful business. Describe members of your management team, their responsibilities and backgrounds. If you are using the business plan to attract financiers or strategic partners, you may want to include copies of the team's resumes. Also, outline the need for additional talent and include staffing projections. Financial data: Your business's historical financial information and projections for future growth form the foundation of a solid business plan. Some documents to include in your plans are balance sheets, profit and loss statements, projected income statements, break-even analyses, cash flow projections, and a statement that outlines the sources and use of funds for the past two years. These can be useful benchmarks for assessing future business growth and development. When developing a business plan, it's a good idea to consult with a CPA. CPAs have the knowledge and experience required to help a business achieve success. The GSCPA is a professional organization for CPAs in Georgia with more than 10,000 members throughout the state. For information, visit www.gscpa.org. |