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Developing a Successful Business Plan

Imagine building a house without a blueprint. Just dragging some wood and nails to a construction site does not a house make. You need vision and a plan. The same is true for your business.

A business plan defines your business, outlines your goals, and lays a strong foundation for reaching them. This multifaceted tool is as important to accomplished women business owners looking to grow their companies as it is to budding entrepreneurs. A business plan helps gather the support you need to get off the ground or expand operations, and it can also serve as helpful tool to build your company throughout the various phases of construction that ensue.

Let's look at three essential business plan elements:

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1. Executive Summary

First impressions are everything, and this quick snapshot of your business has the potential to lure in support or turn away investors. This is your opportunity to efficiently summarize your company's history and articulate your mission:

• Briefly explain the employee and management structure.
• Describe your location and facilities.
• Provide relevant financial information.
• Reveal strategic corporate relationships.
• Highlight key accomplishments.

By the end, every reader should know your services and/or products, understand the marketplace's demand for your business, and believe in your success.

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2. Business Description

After a tantalizing introduction, it's time to provide details. Here it is important to do the following:

• Describe your business.
• Identify the marketplace.
• Demonstrate your industry knowledge.

As you know, there must be a market for your products/services, and your business plan should outline how you are going to gain and maintain a share of it. Ask yourself some foundational questions:

What are you selling?

Who are your clients?

Who is your competition?

What makes your firm unique?

In answering these questions, show how various components of your business work in harmony to accomplish your objectives. Consider the following questions: How does your location support your business? What experience do you and your management team bring to your operation? What are the specialized skills of your workforce? Remember, your intent is to construct a winning approach by building confidence in your readers.

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3. Financial Data

Here, startups will need to project future performance, while established businesses need to detail the historic performance of their companies, as well as project future earnings. Your business plan should include three key financial documents:

• Income Statement
• Cash Flow Statement
• Balance Sheet

Lenders, in particular, will focus on your cash flow statement, because poor cash flow management can sink even profitable businesses. From their perspective, accurately projecting when money comes in and goes out is key to meeting your financial obligations. Lending aside, effective cash flow management can do a world of good for your business by helping you maintain liquidity, minimize your credit obligations, and keep your interest expenses down.

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Sky's the Limit

Think of your business plan as a building with many floors, each performing a function. A foundational function is, of course, the presentation of information as a tool for raising capital. But limiting your approach to this will barely get you off the ground. Additional functions for a well-engineered business plan include effective management of daily operations, clarification of your company's objectives, and a detailed reminder of your plans for growth.

To keep pace with change, review your plan every year and revise it as needed. If you build into your plan an ability to adapt to market fluctuations, industry developments, and business advances, the sky's the limit!

For More Information
Visit the Small Business Administration (SBA) guides at www.sba.gov/business-guide

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