Why a Business Plan?

  • Provides your business with a road map.
  • It is important to know what has happened in the past, what your current situation is, and what your plans are for your business.
  • It allows for you to realistically assess anticipated income and expenses before the business is launched, ultimately reducing your financial risk in the long term.
  • It will help in an IRS audit to determine if you are a “hobby or a business.”

Business Plan Components

  1. Statement of Purpose
    • List objectives
    • Be as simple as possible; keep it short and business-like
    • Ask financial questions:
      • What are the financial projections for the next year?
        • What do you need to do to accomplish your projections: money, time, personnel, and equipment?
      • What is the business structure?
      • How will the funds benefit the business?
      • Why does this loan or investment make business sense?
        • How will the funds be repaid?
  2. Table of Contents
    • Outlines the rest of the plan
    • Lists item and page number
  3. The Business
    • Description: (description, product/service, markets, location, competition, risks/opportunities management, personnel, application for loan, summary).
      1. What businesses are you in or will be in?
      2. What is the status and form of the business?
      3. Will the business be profitable?
      4. When will your business open, and what are the hours of operation?
      5. Is your business seasonal?
      6. What are the products and/or services you plan to offer?
      7. What markets do you intend to service, the size of those markets, and your expected share?
      8. Why have you chosen your particular location?
      9. What management and other personnel are available and required?
      10. What (if appropriate) debt money or someone’s equity investment will make your business more profitable?
  4. Financial Data (funding capital equipment, balance sheet, breakeven analysis, income and cash flow projections, deviation analysis)
    • What are your current financial resources?
      • Land-based, family-based, currently underutilized resources, facilities/equipment, animals, management expertise
    • What is your established budget for marketing and promotion?
  5. Supporting Documents (personal resume, organizational chart, cash flow projections, informational sources, letters of reference, job descriptions, etc.)

        A business plan can be a great asset to help you look at what your business is really all about and what image you want to project to your customers. Make sure to keep accurate, well-kept records of everything in order to make your business a success.

Additional Resources:

Business Workbench

Create Your Own Business Plan

Key Points in Writing a Business Plan

Writing a Business Plan

Funded in part by the North Central Regional Center for Rural Development (NCRCRD)