The document provides guidance on creating an effective business plan in 3 sentences or less for each section. It emphasizes that a well-researched plan is essential to securing funding, convincing investors of the viability of one's business idea, and serving as a roadmap for success. Key sections include an executive summary, company overview, product/service analysis, market analysis, strategic plan, management profile, and financial projections. The document stresses realism, thoroughness, and customizing the plan for different audiences.

1. Birmingham Business Network Meeting May 2009 Business Plans

2. This is your business and your life! You can have great goals and a wonderful concept for your business, but without a well-done business plan, you’re going nowhere fast.

3. Parts of a Business Plan Executive Summary Company Summary Product and Service Analysis Market Analysis Strategic Plan Management Profile Financial Analysis

4. Business Plans A business plan is a road map. It’s your map for starting, developing, and growing your business. It’s your showpiece to let bankers, suppliers, and investors know you are not playing around.

5. Quality of your Idea The quality of your business plan communicates the quality of your idea. Plan serves as evidence you have what it takes to make it happen. It is a reflection of just how serious, how committed, and how prepared you are to not only get it up and running but to keep your business doors open when most new businesses fail.

6. Can you deliver? Your business plan is not a wish list. It is supported by serious research and thought. The worst thing you can do is over-promise and under-deliver. Instead, make a point in your plan and in your daily business to under-promise and over-deliver.

7. The difference You will ask serious people to give you serious money based on your business plan, so it’s not the time to cut corners. Having a professional, well done business plan means the difference between getting or not getting your start up loan and/or a line of credit.

8. Your plan can win over skeptics and doubters, but if it looks like a community college paper, you might as well beg on the corner for pennies. Win Them Over

9. Consider Your Audience Think about your reading audience. Your friends may buy into your business idea based off your enthusiasm, brilliance, and willingness to buy them lunch, but bankers and venture capitalists don’t step up if the numbers don’t add up.

10. They want to know your company’s fixed assets, including equipments and buildings. Bankers and investors want to feel assured that you are capable of repaying any loan at the going interest rate. They Want to Feel Assured

11. Getting Down to Business Putting together a solid plan involves some serious getting-down-to-business, but you’ll be glad you invested the time, energy, and you’ll gain proficiency with a calculator. Put on paper both the dreams and the realities of your business.

12. Good News You don’t need a MBA to put together a good business plan. We will now go through the essential elements of a solid business plan.

13. Executive Summary The most important section of your plan because a high % of people who read your plan will look at this first. If they don’t like what they are reading, they will bid you farewell…so… Write this section last, after you’ve seen how all the other sections come together.

14. Executive Summary It’s called the summary because it offers a brief nutshell look at what’s in the rest of the plan. You shouldn’t write your executive summary until you have all the other sections at least roughed out, just to make sure you have all your ducks in a row.

15. Don’t Fudge It’s tempting to project your dreams of huge sales and great earnings when writing your business plan. And you will probably be tempted to ask for more money than you need because you believe your business will take off like a rocket in the beginning. The problem is investors don’t buy into your dreams, they are investing or…

16. Not investing in the realities of your business plan. Go by the numbers, base calculations on realistic measures, stick with figures that don’t lie. You will deal with experienced accountants, bankers, and business persons that will not be fooled easily, so build your reputation right and start on the right foot. Be Realistic

17. Keep the Bells and Whistles to a Minimum Your business plan is not the place to make a sales pitch. While it’s important to show enthusiasm and present a strong case why your business concept will work, your plan should be straightforward in laying out the facts. Save the chorus line, sky-writing, and orchestra for later.

18. Make a Long Story Short Executive Summary should only be filled with hard information. Skip the adjectives, cute stories, and technical jargon. The quicker they get through your business plan, the faster they can make a decision to give you money.

19. Don’t Leave Out Anything Important Give yourself time to put your business plan together so you can think about ALL aspects of what you’ll be doing, producing, selling, offering, and delivering. Talk about it with family members and experience professionals you trust. Listen to their questions because the things they want to know will probably reflect what bankers, investors, partners, suppliers will want to see in your plan.

20. Tell Them What Makes Your Business Unique Anything that makes your product or service stand apart from the competition is really important and needs to be in your plan. Professional money lenders sniff this out because if there is something truly special about your company, for example, secret recipe, new formula, groundbreaking technology, it gives them all the more reason to buy into your plan. Let them know specifically how your product or service will stand out against your biggest competitors.

21. Make Sure You Know What You Are Talking About It wouldn’t hurt to have a TRUSTED advisor, professional friend, entrepreneur relative read over your Summary before you pass it around just to make sure you don’t make a foolish mistake.

22. Get it Out of Your Head and on Paper You’ve got an idea, the wheels are constantly churning. You think about how to make this idea work, the people you want to get involved, the contacts you need to make, how you will fund start up. Putting it on paper helps you see things more clearly, plus there’s something about putting it in writing that makes it seem more real.

23. Company Summary The nuts-and-bolts details of your business concept and a brief history of how you came up with it. Meet-n-greet section in which you introduce yourself, your top ranked employees, and your business. Include brief profile of yourself, other top executives, brief history of your business concept telling how the idea was formed.

24. Product and Service Analysis Presentation of your product or service and its unique aspects. Offer a straight up report on why you think there is a place in the market for your idea. Describe value or benefits, location, key technologies, detailed description or products or services, and potential future products or services. Don’t embellish on the facts, but do lay it out for your readers.

25. Market Analysis Where the rubber meets the road. Two out of three new businesses fail within five years primarily because of lack of in depth market analysis. Analysis industry you are in: historical cycles, future forecasts, list of all well known competitors. An in-depth look at the competition; their products, market share, profitability, competitive edge, how your product matches up with theirs.

26. Strategic Plan Where the action is…This is your war plan Cover your pricing strategies, marketing plans, distribution channels, sales strategies, promotion efforts, and forecasts for the next three to five years Make highly detailed to illustrate you’ve done your homework. For example, separate totals sales by product or department so you can spot trends and seasonal shifts.

27. Management Profile In this section, include profiles of department heads and other key players, particularly those with great credentials, awards, or high profiles in your field/industry. Many investors, bankers may be more interested in who is on your team than what you are selling. Investors are very interested in the management, so it’s important to have a good team around or to be a legend in your own right.

28. List every individual’s undergraduate and graduate degrees, work experience, awards, etc that you’d want to know if you were the banker or investor looking at this start-up. Also, include an organizational chart showing who reports to whom, with job descriptions and duties of each and every employee. Wouldn’t hurt to list potential consultants, advisers, board directors, lawyers, accountants, and technical experts you will call on when needed. Management Profile

29. Weaknesses or Missing Pieces Evaluate this section before you hand to outsiders. Are there any obvious weaknesses or missing pieces in your team? Does your team have up to date knowledge? Sales experience? Industry expertise? Marketing know-how? Diversity? Now look in the mirror. Do you have a good handle on your strengths and weaknesses? Are there team members whose strengths cover your weaknesses? Will your board challenge you and tell you the truth even if you may not want to hear it?

30. Financial Analysis Dial up the dollars Start-up financing Operating funds Cash Reserves Revolving credit Bankers, investors, partners also want to know the details: Your business and personal assets Your business and personal debts Financial projections from your market share

31. Projected equipment costs Projected supply costs Projected lease or mortgage costs Projected salary and benefit costs for all employees Projected manufacturing costs Projected delivery costs Projected costs of accounting, legal, and technological services Play it straight all the way…don’t play cute with this section. Public records are available to everyone. You may be required to consent to a credit and/or background check. Be prepared to answer any and all questions if you expect people to invest their money or time in your business. Financial Analysis

32. Financial Analysis Your analysis should include: Break-even analysis - projections of how much money you will have to put out before your business starts turning a profit. This is usually reached when sales revenues equal total costs. Balance sheet showing assets, liabilities, and equity for each quarter over the next three to five years. Cash flow schedule showing how cash will be spent and collected over the same period. Same analysis applies if you are buying an existing business. There should also be a profit and loss statement.

33. Sell what you’ve got, not what you hope to get Investors are far more interested in how you plan on making money than how much money you think you may be pulling in. When you write this section, impress them with what you know and understand about your business rather than with what you hope it will produce down the road.

34. Executive Summary Revisited Once you’ve completed all of these sections of the business plan, you are ready to go back and do your executive summary. Take your time and do it right. Here are key things to keep in mind when writing your plan:

35. Don’t Outsource It Out It’s okay to get help in certain areas, but this is something you should do yourself If you aren’t interested enough to do the business plan yourself, then it’s very likely you are in the wrong business. Writing a business plan forces you to look at all aspects of the operation. Any flaws will show up if you do your homework.

36. It could well be that in doing the business plan you lose your enthusiasm for this business concept. That’s not such a bad deal. It’s better to bail out before you’ve committed resources and other people have signed or loaned you money. If doing the plan only pumps you up more about the concept, that’s great! Writing a plan is hard work and if you’re still enthused about the idea, you are probably on the right track. If You Lose Enthusiasm

37. Check It. Check It Again. Check Your Checks Have someone else double check it too. Keep track of all your sources of information and hold on to them in case you need to verify something later. If your readers see a sloppy business plan, they will assume you are sloppy in your business dealings. Get in the habit of being this careful about everything you do in your business. Later on, even little mistakes can cost you big bucks.

38. Pumped and Tough Bankers and venture capitalists want to see you sweat. They want to make sure you know your business inside out, upside down, and sideways. They need to know if they commit their money, you will be committed to making your business work. Make a trial run or two with friends who are good at giving the third degree. Do whatever it takes to get ready, because these are critical meetings for you and your business.

39. Analyze Your Audience Because you want every person who reads your plan to buy into it, you should customize your pitch for each of them. Do some homework on the interests and backgrounds of each group. For example, a VC might have a special interest in high-tech companies or might prefer home products. A family member might be more interested in a short term return. An investor may be looking for long term investments.

40. Keep It Confidential People talk, they steal ideas. Sometimes it’s just a conversational slip about this “great idea” that someone else takes and runs with. To prevent this from happening to you, draft a confidentiality agreement. Before you present your plan to anyone, discretely ask that they sign a copy of that agreement. Professionals and people who really care about you and your success understand. Beware of anyone who balks at the idea, you do not want to do business with them.

41. Keep It Current Check your business plan on a regular basis, if not every quarter, every six months. Your target market may shift, the economy may rise or fall, new technologies come along, so you need to make adjustments to your plan accordingly. It’s also a good idea to go into your plan just to check your budget against actual performance and make an honest and detailed review of your business. You may discover you are keeping too much inventory, costs have crept up, or that your forecasts are way off.

42. It’s Good for You! Just like eating your vegetables, you may not enjoy doing a business plan but it’s good for you and your business. So…buckle down, do it right, and know that you are taking a big step on the path to your dreams as an entrepreneur!

43. Be Ready to Move and Groove Understand your business plan will always change. It may become an entirely different business. Be ready to move and groove. Be willing to go with plan B, C, D, E, F, and G so that you can adjust to new developments and circumstances. Business plans are made t be changed.