The business plan is critical to the new business and still important to the growing business. This plan is the blueprint to financial viability for the enterprise. The importance of controlling and having adequate cash flow will quickly become apparent when drafting the plan. The business plan is a working document and should be therefore revisited on a regular basis. With the use of computerized spreadsheets, cash flow forecasting under various assumptions is not a difficult task.

What to include in a business plan:

• Letter of introduction to the company
• Executive summary-brief description statement(1-2 pages)
• Background info on the legal status of your business
• Description of the industry that you will operate in include trends, main players (competition), barriers and main characteristics
• Description of your product or service
• Description of management team for your company-include organization chart if appropriate, management compensation schedule and resumes
• Marketing Plan including:
  • Assessment of target market
  • Assessment of competition-detail
  • Pricing and selling policies
  • Distribution policies
  • Advertising and promotional plan
• Description of operations including inventory controls, suppliers and work flow
• Description of capital assets required i.e. Location, land, equipment etc.
• Personal references-from professionals, former employers, banks, previous lenders
• Financial Plan including:
  • Capital requirements
  • Cash flow budget by month
  • Projected balance sheet and income statement
  • Break even chart-fixed costs/gross profit margin
  • Ratio analysis such as gross profit margins, current ratio (working capital), debt to tangible net worth,
  • Sources of existing or proposed finance
  • Personal net worth statement outlining your personal assets and liabilities
  • Collateral