Preparing The Business Plan – Putting It All Together

The suggested analyses of products, competition, financial matters, risks and environmental factors are some of the most important elements of the broader exercise of preparing a business plan for an emerging company.  A business plan is the first step toward creating the discipline necessary in order to launch, operate, and grow a successful business.  Some entrepreneurs are so excited about the technology or the product that they simply want to press forward without deliberation.  When told that they need to do a business plan for potential investors and lenders, the first attempt is often quite rushed and incomplete.  The consequences, however, of failing to take the planning process seriously can be dire.  Not only is an opportunity lost to demonstrate the credentials of the proposed venture to potential business partners, the momentum of the enterprise itself will soon begin to diminish due to the lack of interim goals and milestones that keep the business and the founders moving in the right direction. 

There are a variety of methods that might be used to put together a solid business plan; however, most formal business plans cover the following areas:

  • A description of the proposed business activities, including the products and services the company will be offering;
  • A description of the target markets for the company’s products and services and an explanation of how the company intends to reach those markets, including an analysis of competitive factors;
  • A detailed analysis of the costs associated with launching and operating the business and a strategy of how the business will obtain the capital to pay these costs (including initial capital contributions and long-term financing requirements);
  • A description of the operating plan for the business, including an analysis of how the company will manage the core functions of the business (e.g., manufacturing, human resources, sales, accounting, etc.);
  • A description of the managerial infrastructure of the business, including the mechanisms to be used for management and control of the business, and each of the persons who will be filling management positions within the business;
  • A description of the plans and strategies for recruiting non-executive employees, including cash and equity incentive arrangements;
  • A description of the company’s property and facilities requirements, including any specific leasing arrangements;
  • A description of the legal and regulatory environment for the company’s business, including strategies for perfecting and maintaining intellectual property rights and business permits;
  • A summary of any plans for acquiring any needed resources or further capabilities; and
  • Detailed budget and projected cash flow statements.

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