Many writers wrote books and articles on preparing a business plan. This is one of those, but I am trying to be as simple as I could. There are different school of thoughts in the question if a new business need well written business plan or not. No matter what the type of business you are going to start, what the size of the business - single person business, incorporated, limited liability or public corporations, every new business often have a formal or informal business plan early in the planning stage. One school of thoughts very informal business plan, just list of things and list of incomes and expenses, another school of thought demand well written and thorough business plan projecting 5 to 15-18 years. When you seek a business loan, business plan is the first required document, which should be able to convince your investor. The plan, actually, should serve as a road map of the business and clearly illustrate how it will achieve set goals.

I think, depending on the nature of your business and size and scope of the business, new business should have a business plan - may be simple or elaborate. Whatever the nature of business plan, it should at least include two major sections:

1. Business Overview

a. Description or overview of the business

This section of business plan should cover the nature of the business, ownership, and its management structure. The purpose of this section is to prove that the business is viable/feasible and the success of the business is driven by the proposed composition of the management structure and its operation capabilities. This section can be structured with the following sections:

• The founding members of the business,
• Expected start date,
• Targeted product, service domain, clients and their estimated numbers,
• Staffing details - required expertise, nature of engagement (part time, full time, ad hoc), projected numbers, their terms of reference (TOR),
• Official location of office, its branches and subsidiaries if planed in future,
• Supply chain map if business is supposed to be spread over more than one geographical location.

b. Product and/or service

Generally entrepreneurs start with some ideas of product or services and then they try to make it a business. If some of you have not identified what you want to sell, please do this now. Identifying all products and all services is the first step to to understand your business by yourself first.
The list of products and services will include:

• Current products and services, and their business status,
• Future products and services you want to add to your product or service line and how describe these will complement your existing products or services or if it’s completely new business then describe how those products and services relate.
• Add the specifications for products. Describe the service model for services.

c. Business to Business (B2B) Network of Vendors and Suppliers

Even some of the businesses are totally self-sufficient, most of the businesses need the suppliers and vendors for necessary raw materials, intermediary goods, and different core and non-core businesses. It would be wise to plan upfront for this B2B network which will keep your business running interruptible. If possible discuss with the prospective vendors and suppliers and make plans for formal agreements for their availability, Memorandum of understandings (MOUs), Non-Disclosure Agreements (NDAs), Service Level Agreements (SLAs), Non-Competing Agreements (NCAs) where necessary and possible. Also secure the patents and copyrights if you have something that may possess such labels.

2. Financial Details

a. Current Financial data

Detail the available finance on hand, its sources and also detailize the projected expenses required to open the business. Take some help from the person who knows accounting for this if you feel you need some expert hands at the begining. The purpose of this section is to make possible to access all necessary financial data pertaining to the business, when required by banks, investors, VCs.

b. Income projection details

This is very important section of the business plan. If this section is not strong enough, be ready to rethink about opening a new business. Find out the break-even points (BEP). If you are going to do business, you want to make profits and for profits, income projections should list the profits projects of the business will make in certain defined periods of time. Consider the inventory costs, production expenses, operating and promotion expenses, debits, interest for loans, insurance, taxes, receivables and payables and many other hidden expenses when you calculate profits. Obviously, you should be ready to accept the loses durin initial period (not necessarily it will be a loss. Some business making profits from the first month itself).

When preparing Income projection details, always base it on the recent and relevant data. Consider the demography, business environment, competitors, customer behavior, size and prospect of your nature of business and its life time and other necessary factors. Spend extra time to evaluate other variables that affects your income.

c. Three-year projection practice

Most of the small businesses prepare three-year projections. A shorter time will not be realistic to see the real health of the business. When you prepare business plan, it should clearly outline the progress milestones and expected glitches during the three year periods. Never avoid to work on the possible problems and measures planed for. Define some indicators to measure your business performance. You should be the honest evaluator of yourself. Prepare chart for defined indicators and look at that as frequently as you can.

I think this should give you a better ground to start writing a good Business plan for your business. I am eager to hear from you on how you make out from this.

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