Short Form Business Plan
The components of the Short Form Business Plan (Washington SBDC):
Who Are You (1 page):
What Are You Going to DO (1 page):
How Will it Work (1 page):
Sources & Uses of all Funds Up to Start Day (1 page):
Cash Flow Forecast (2 pages):
Page 1 = First 12 months
Page 2 = Years 2-5: Cash only by items list. All cash in including paid receivables and all cash out except owners salary or draw. This should also show when you will break even and start generating profits. Details on your assumptions of why and how you will get the sales you are projecting has to be included in the text portion of your plan.
Assumptions to be addressed (1 Page):
Before you start writing your business plan….
These are questions intended to help you clarify your business idea and communicate it to others.
Who Are You (1 page):
- Opening One Sentence Pitch: This enables you & potential investors/lenders to quickly determine whether it’s worth their while to read your entire plan. Therefore put as much effort as you can into making it a strong pitch to keep reading.
- Company mission and vision: This is the biggest picture for your company -- the "why" behind what you do.
- Management team: Your expertise and the skills and background of your team members can mean the difference between a yes or no on funding. Even if your experience is limited, talk about anything that makes you and your team -- if there is one -- uniquely suited to make your company a success.
- Organization: The legal structure and location of your organization are important measures of how well you’ve planned for future growth. This can be a simple organization chart with short explanations of roles, along with the address of your operation.
What Are You Going to DO (1 page):
- Company overview: The main purpose of your company, including products and services as well as any proprietary technology or other unique features. This is also a good place to include information on the company’s history so far.
- Risk analysis and mitigation: This is the section where you show that you are aware of the risks and have thought about how to deal with or eliminate them. If the business fails, how does a lender reduce their risk.
How Will it Work (1 page):
- Market and competition analysis: This covers the size of your market and who your competitors are for your product or service.
- Project execution: Do certain projects need to be completed before you can generate revenue? List them here with a plan for getting them done. Project Planning/Gantt Chart.
- Marketing plan: This is the four Ps of marketing -- product, price, place and promotion. Remember that you'll want to prove that you know how to generate revenue for your business. This has to include details on your gross revenue assumptions. (Could go to additional pages)
- Operations: How your organization runs. Consider using a flow chart.
Sources & Uses of all Funds Up to Start Day (1 page):
- Investment rationale: Simply, how much you want and what you’re going to do with it.
- Financial plan: Layout your funding structure, which tells lenders/investors where they fit in the debt/equity of your company and/or how lenders will be paid back. List your expected start-up costs.
Cash Flow Forecast (2 pages):
Page 1 = First 12 months
Page 2 = Years 2-5: Cash only by items list. All cash in including paid receivables and all cash out except owners salary or draw. This should also show when you will break even and start generating profits. Details on your assumptions of why and how you will get the sales you are projecting has to be included in the text portion of your plan.
Assumptions to be addressed (1 Page):
- Illustrate your industry and market knowledge; research findings and conclusions+
- Industry description and outlook – size, growth rate, trends, characteristics. Major customer groups.
- The Need/gap in the target market, how your solution fills it?
- Expanding market? What is the rate of growth. Homeowners spending average of x annually.
- Pricing – more research on comparables
- Major factors contributing to projected success include knowledge and skill of the founder, uniqueness of design, and growth of market
- Marketplace needs trying to satisfy; how products and services meets these needs
- Specific consumers that you will serve
- Competitive advantages – location, personnel, efficient operations, ability to bring value to consumers
- Target market – distinguishing characteristics, needs of customers, demographics and where are they located
- Size of market, annual purchases, forecasted growth for group
- Design and manufacturing processes
- Competitive analysis – what is competition by product line and market segment
Before you start writing your business plan….
These are questions intended to help you clarify your business idea and communicate it to others.
- Write down in one sentence what your business will do. If you show it to your mother will it be clear to her what you are doing?
- Again in one sentence, who is your market? Age? Gender? Geography? Interests? “Everyone” is not an acceptable answer!
- How will you reach your market? Why will you use that method? Be specific! If you are using social media, publications, which ones? Why those?
- Who is your competition? “ No one” does not count as an answer. If no one else does what you do, what else competes for that dollar? If no one else does it, is there some barrier you have figured out how to overcome?
- Why will someone buy from you? Location? Name familiarity? Customer Service? There are others out there. What makes you better?
- How much is your product or service selling for in the market? Can you meet or beat that price? How do you know? Have you really priced it out?
- What money will you live on while you are building your business? Do you have a day job, or a working spouse or a trust fund or a pension?