BUSINESS PLAN
BASICS
A Simple Guide To Writing
Your Business Plan
Microenterprise Program
Offering free classes, technical assistance and loans
to low and moderate-income entrepreneurs.
Dave Heyamoto
Ph: 456-7106 ext:110 E-Mail: heyamoto@snapwa.org
Cara Weipert
Ph: 456-7106 ext:127 E-Mail: weipert@snapwa.org
Karen Campbell
Ph: 456-7106 ext:130 E-Mail: campbell@snapwa.org
“Empowering People for Economic Growth”
Table of Contents
Creating Your Business Plan .................................. 3
Executive Summary .................................................. 4
Business Description ................................................ 6
Management and Operations ................................. 7
Marketing ................................................................... 9
Industry Overview
Target Market
Competition
Product/Service
Promotion/Advertising
Pricing
Placement
Financials .................................................................... 15
Your Personal Financial Picture
Average Monthly Income
Start-Up Expenses and Sources of Capital
Use of Funds and Collateral
Appendix Items ......................................................... 21
Spreadsheets .............................................................. 22
Monthly Cash Flow
Monthly Income Statement
Monthly Balance Sheet
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Creating Your Business Plan
The business plan consists of a narrative and several financial
worksheets. Work through the sections in any order that you like,
except for the Executive Summary, which should be done last. Skip
any questions that do not apply to your type of business.
This plan is designed for the Microenterprise: a business of fewer
than 5 employees. Depending on the level of funding requested,
the narrative portion of these plans usually runs 8-12 pages plus
printouts of the Excel financial sheets and Appendix items. Aim
to write clearly and concisely. Avoid jargon or fluff. Follow the
rule, “Don’t tell me, show me” using facts and realistic examples
to explain and justify.
The real value of creating a business plan is not in having the
finished product in hand; rather, the value lies in the process of
researching and thinking about your business. The act of
planning helps you to think things through. It takes time now, but
avoids costly, perhaps disastrous, mistakes later. Many
businesses fail for lack of proper planning. We do not want that
to happen to you!
This business plan is a generic model suitable for all types of
businesses. However, you should modify it to suit your particular
circumstances.
Fortunately, there are a number of helpful resources for small
businesses in Spokane. One of them, SNAP’s Microenterprise
Program, is specially geared towards low and moderate income
entrepreneurs. We provide free business planning classes,
personal technical assistance and low cost microloan funding. To
determine eligibility, call SNAP at 456-7174.
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I.
Executive Summary
1. Write this section last. Include everything that you would
cover in a five-minute interview. Make it enthusiastic,
professional, complete, and concise.
Explain the basics of your business: What will your product
be? Who will your customers be? Who are the owners? What
do you think the future holds for your business and your
industry?
If applying for a loan, state how much you want, precisely
how you are going to use it, and how the money will make
your business more profitable.
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II.
1.
Business Description
What business will you be in? What will you do? Briefly,
who are your target customers? State your business hours
and location.
2. What is the legal form of ownership: Sole proprietor,
Partnership, Corporation, Limited liability corporation
(LLC)? Why have you selected this form?
Sole Proprietorship – $0 cost to start business
LLC - $200 to start business Corporation - $1,000 to start business
3. Who are the major owners of the firm? Briefly summarize
their qualifications.
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4. Company Goals: Where do you see your business in the first
year, in 3-5 years?
5. Business Philosophy: What is important to you in business?
What factors will make the company succeed?
6. What do you think are your major competitive strengths?
What “niche” are your taking that will help you to establish
a place in the market?
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III.
Management and Operations
1. State your company’s name, legal form and ownership:
“ABC Company will be a sole proprietorship owned solely
by Jane Success.”
2. Provide a brief overview of the owner(s) qualifications for
this business. Attach a resume for each owner to the
Appendix.
3. Who will do what functions? If it’s just you, state that you
will perform all needed functions: buying, marketing,
bookkeeping, customers, inventory, maintenance, etc.
4. Will you have employees? What will their role be? What
qualifications do they need? What will you pay them?
Training requirements?
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5. Will you use outside professionals or family members to
help? Indicate any Accountants, bookkeepers, attorneys, etc.
State family member’s role in your business.
6. Does your business require any special licensing, bonding or
regulations? Is your retail or production location zoned
properly? What insurance do you have?
7. Identify any key suppliers. Do you have back-up suppliers?
8. Will you sell on credit? What will your policies and terms
be? How will you determine creditworthiness for new
clients?
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IV.
Marketing
Industry Overview
1. What do you know about the industry you’re in? Is it
growing? How is it changing? What is the industry/market
like where you plan to operate your business?
Target Market
1. Describe the “primary target market” for your business.
This is your most important type of customer. What are
their characteristics (age, gender, income, etc), where are
they located? What other “secondary market groups” will
you target?
2. If you are selling wholesale, describe your wholesale
customer as well as the consumer who will purchase your
product.
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Competition
1. List three major direct competitors (those that do exactly
what you do).
Will they compete with you across the board, or just for
certain products, certain customers, or in certain locations?
2. What are their advantages over you? How will you deal
with these?
3. What are their weaknesses? How will you take advantage of
these?
4. What niche are you filling the market? (Don’t try to be all
things to all customers!)
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Product/Service
1. Describe your major services and/or products. Do you need
to categorize your products? The work you do may involve
a wide variation of price and time (like plumbing or auto
repair), or you may create products that vary a lot (such as
craft or artwork). If so, see if you can subtitle your
categories and give examples of each.
2. Include the most important features and benefits.
3. What special services will you provide? Some examples are
delivery, support, follow-up, and refund policy
4. How will you get your products to your customer? Are you
selling directly to them? Selling wholesale? If so, describe
the type of wholesaler. Will you sell on the web?
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Promotion/Advertising
1. How will you get the word out to customers? (Include any
print advertising: trade shows, a website, brochures,
business cards, direct mail, other media, etc.) Itemize all
costs and include relevant dates, ad sizes, etc.
2. What low/no-cost ideas do you have for promoting your
business? Examples include: word of mouth (how will you
stimulate it?), friends, professionals, guest speaking,
workshops, volunteering among your target market, etc.
3. How will you stay in touch with those who buy from you?
E-mail list, direct mail, etc.
4. You will need to include a promotion/advertising budget for
your financials.
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Pricing
1. How did you decide on your prices? Does your pricing fit
your market? How do your prices compare to your
competitors?
2. List your products and prices. For products, include what it
actually costs you to make that product (cost of goods).
Don’t include your labor. Use a table format if it helps.
3. For services, list your hourly rate. If you have parts, what is
your cost and/or what is your average % mark-up?
4. If your pricing varies, create an “average price” for each
category, or type of service/product. For example:
Children’s dresses average $25, average Gold Level auto
paint job: $400., average Re-plumbing of basement: $1,000.
You will need these averages for your financials.
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Placement
1. Where are you running your business? From home? An
office, or store? If you do not have a location picked out yet,
describe what you are looking for.
2. If you are working from home, describe briefly how you
plan to organize your space to separate out work and home
spaces.
3. If you have a retail location, discuss the value to your
customers: Parking, Interior spaces, convenient access, etc. Is
this location consistent with your target customer?
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4. Where is the competition located? Is it better for you to be
near them (like car dealers or fast food restaurants) or
distant (like convenience food stores)?
5. What regulations, zoning, food handling or other
requirements exist?
Marketing Ideas:
 Social Networks: Facebook, Twitter, etc.
 Public Relations: Newspaper/Magazine features/articles,
Commercials, Radio, Internet, Billboards/Posters, Yellow
Pages
 Sales Promotions: Planned promotional activities like
special sales, coupons, contests, and premium awards, Email
Database
 Networking: Neighborhood Business Council
Meetings/Business Networking International (BNI)
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V.
Financials
All businesses, whether start-up or growing, will be required to
supply financial data. If you are an established business, you will
be required to supply historical data related to your company’s
performance. Most creditors require financial data for the past
three years, including tax returns.
Your Personal Financial Picture (Optional)
1. Is your current income meeting your personal financial
expenses? How do you plan to pay for your business
expenses before the business earns a profit? What do you
want to draw from the business each month?
Creating a Personal Budget
Personal Income:
AVERAGE Monthly INCOME
TOTAL from all sources for your use ----------------- $____________
Possible Income Source:
 Earned wages from job
 Unemployment
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AVERAGE Monthly Costs
Rent/Mortgage ----------------------------------------------- $____________
Food ------------------------------------------------------------ $____________
Utilities – Heat, Electrical --------------------------------- $____________
Utilities - TV, Phone, etc. --------------------------------- $____________
Car payment ------------------------------------------------- $____________
Gas/ Other Transportation ------------------------------- $____________
Credit Card Payments ------------------------------------ $____________
Bank charges (include check cashing) ---------------- $____________
Insurance ------------------------------------------------------ $____________
Clothes --------------------------------------------------------- $____________
Childcare ------------------------------------------------------ $____________
Child Support/Alimony ----------------------------------- $____________
School Supplies/Expenses -------------------------------- $____________
Entertainment (include video rental, movies, eating out, etc.)
------------------------------------------------------------------- $____________
Medical Costs ------------------------------------------------ $____________
Special Occasions/Gifts ------------------------------------ $____________
Savings (set aside) ----------------------------------------- $____________
Other regular monthly expenses ------------------------ $____________
TOTAL ------------------------------------------------------- $____________
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2. What is your personal debt situation? Are you paying back
any debt under your current personal income?
3. Attach a credit report to the Appendix. Run a credit report
on www.annualcreditreport.com
4. Describe the story behind any significant financial problems
that may show up on your report.
5. What are the greatest risks you are taking in
starting/running your own business? What would happen if
you could no longer do so?
Startup Expenses and Sources of Capital
1. Estimate your start-up expenses as best you can. New
businesses have a way of costing more than anticipated,
include a separate “Contingencies” category equal to 20% of
all other total start-up expenses.
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Start Up Costs
Advertising
Automobile
Contract Labor
Dues/Subscriptions
Education/Seminars
Equipment
Insurance
Internet
Leasehold Improvements
Miscellaneous
Office Supplies
Operating Supplies
Printing
Professional Fees
Rent
Repairs/Maintenance
Taxes & Licenses
Telephone
Travel & Meals
Utilities
Wages
Payroll Taxes
Working Capital
Miscellaneous
Total Start Up Costs
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$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
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How am I going to pay for these starts up costs?
1. Savings? ____________
2. Loan? From Whom? _____________ Collateral? _____________
Monthly Business Expenses
1. Estimate your monthly business expenses as best you can.
Operating Expenses
Advertising/Marketing
Auto/Truck
Bank Charges-Cred Card Charges
Contract Labor
Dues/Subscriptions
Education/Seminars
Equipment Lease
Insurance
Miscellaneous
Office Expense & Supplies
Operating Supplies
Printing & Reproduction
Professional Fees
Rent
Repairs/Maintenance
Taxes & Licenses
Telephone
Travel & Meals
Utilities
Wages
Payroll Taxes & Expenses
Total Expenses
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$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
$________________
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Use of Funds and Collateral
1. List all items you would like to purchase with a loan.
2. List any collateral you will use to secure your loan. (eg. Car,
house, equipment, etc.)
1. New businesses will be required to provide monthly
projected income statements, balance sheets, and cash flow
statements for at least two years (see pg 23-25).
2. Assume when you will start the business.
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Business Plan Appendix
1. These are some frequently requested items to include with
your business plan:
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Personal list of liabilities and assets
Credit Report
Business license (Washington State, City)
Quote from insurance company, or current insurance
coverage.
Resume
Any detailed inventory list as part of loan request.
Letter from seller of loan items: car, equipment, etc.
stating price, VIN, etc.
Written bids or estimates on any major loan item, such as
equipment.
Copies of leases or contracts.
List of assets available as collateral for a loan
Letters of support from future customers, strategic
partners, etc.
Marketing materials
Maps and photos of location
Product photos
Other support materials needed
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ENDING BALANCE
SURPLUS/(DEFICIT)
TOTAL DISBURSEMENTS
Total Other Disbursements
Other Disbursements
Equipment
Fixtures & Furnishings
Leasehold Improvements
Other Payments
Capital Loan(s)
Owner's Draw
Reserve for Taxes
Total Operating Expenses
Operating Expenses
Advertising/Marketing
Auto/Truck
Bank Charges-Credit Card Charges
Contract Labor
Dues/Subscriptions
Education/Seminars
Equipment Lease
Insurance
Miscellaneous
Office Expense & Supplies
Operating Supplies
Printing & Reproduction
Professional Fees
Rent
Repairs/Maintenance
Taxes & Licenses
Telephone
Travel & Meals
Utilities
Wages
Payroll Taxes & Expenses
Total Cost of Goods Sold
Cost of Goods Sold
Materials & Supplies
TOTAL SALES
Other Sources
Personal Contribution
Capital Loan(s)
Other
Total Other Sources
Total Income
INCOME
Sales
Beginning Balance
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
MONTHLY CASH FLOW -- 2012
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Total
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Operating Profit
Total Operating Expense
Expenses
Advertising/Marketing
Amortization
Auto/Truck
Bank Charges-Credit Card Charges
Contract Labor
Depreciation
Dues/Subscriptions
Education/Seminars
Equipment Lease
Insurance
Interest
Miscellaneous
Office Expense & Supplies
Operating Supplies
Printing & Reproduction
Professional Fees
Rent
Repairs/Maintenance
Taxes & Licenses
Telephone
Travel & Meals
Utilities
Wages
Payroll Taxes & Expenses
Gross Profit
Total Cost of Goods Sold
Cost of Goods Sold
Materials & Supplies
Income
0
0
0
0
Total Income
Jan-12
Feb-12
Mar-12
Apr-12
May-12
0
Jun-12
Jul-12
MONTHLY INCOME STATEMENT -- 2012
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Total
Name of Company
Balance Sheet
Year 1
2013
2014
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Expenses
Notes Receivable
A/R - Other
Total Current Assets
Fixed Assets
Fixed Asset
Equipment/Machinery
Furniture/Fixtures
Vehicles
Computers & Software
Land
(less: Depreciation)
Total Fixed Assets
Other Assets
Intangibles
(less: Amortization)
Total Other Assets
Total Assets
$
-
$
-
$
-
$
-
$
-
$
-
Total Owner's Equity
$
-
$
-
$
-
Total Liabilities & Owner's Equity
$
-
$
-
$
-
Liabilities & Owner's Equity
Current Liabilities
Accounts Payable
Accrued Expenses
Credit Cards
Line of Credit
Other A/P
Total Current Liabilities
L/T Liabilities
Instalment Notes
Equipment/Machinery Loans
Shareholder Loans
Capital Leases
Other L/T Loans
Total L/T Liabilities
Total Liabilities
Owner's Equity
Capital Stock
Paid-in Capital
(Draws/Dividends)
Retained Earnings
Net Income
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