Business Planning – an overview



Business Planning – an overview

By Veronica Timmons

There’s an old saying Failing to Plan is Planning to Fail. Planning to be successful in your home-based or small business on a Gulf Island means doing some creative thinking, some research and then doing a step-by-step business plan. Women usually start small and on average need $2-3,000 loan to get started or expand a business. If you fit this category you don’t have to write a hundred-page plan, you can probably get all the information on 4-5 pages. If you want to borrow money or get a grant it’s essential to tell the business plan reviewer (the funder) about your skills/knowledge, business goals, financial and marketing plans. You want them know that you are serious about growing a successful business/livelihood.

When you start developing a business it’s a good idea to think about the business as if it were a separate entity from you, even though you may be the sole owner, service-giver or maker of the products, the book-keeper, marketer and administrator. Whatever the product or service you provide, always think about and call your business by its name. Keeping it separate will help you make dispassionate decisions. Your passion maybe making and selling those pies or jams but you have to run the business as well. As a small/home-based-business owner you wear many hats!

There are four parts to a business plan:

1. Commercial Section - gives key information about the business

2. Financial Plan – outlines the money matters

3. Marketing Plan – outlines how you will promote and sell your product/service

4. Appendices

A business plan should contain only facts (not opinions about where things might go). If your business already exists you can use past financial and sales records when composing the plan e.g. sales and income for the past three years. Everything you write should be provable. Documents should be added to the Appendices. Look at what the funding source requires and make sure you complete every piece of information required.

1. The Commercial Section

Here’s where you tell the reader what the business is about:

✓ Title page

✓ Table of contents (optional in a short bus. plan)

✓ Introduction to the business: name, addresses, business (tax) numbers

✓ Type of bus. – proprietorship, partnership, cooperative, corporation?

✓ What does the business do – describe products or services?

✓ Which sector is it in e.g. agriculture, arts, tourism etc.?

✓ Where is the business housed? Rent? Own? Type of premises?

✓ What insurance does the business carry?

✓ What equipment and machinery is owned?

✓ What is the current value of the business?

✓ Who runs the business and what are their qualifications/skills?

✓ How long have they operated it?

✓ What are your business goals – next year, three years

✓ SWOT analysis – strengths, weaknesses, opportunities, threats

2. The Financial Plan:

✓ The budget

✓ A cash-flow forecast – current and projected revenue and sales

✓ Current financial circumstances – what is your investment? Profit?

✓ Financial requirements – how much do you need for start-up, expansion?

✓ How will you pay it back (if it’s a loan)?

✓ Who does the book-keeping?

✓ Use of outside expertise – e.g. accountant

3. Marketing Plan Section

✓ Describe your customers: who, ages, where located

✓ What’s the marketplace like?

✓ Who/what is the competition?

✓ Where do you sell your products (stores, email, farmers’ mkt, e-business)?

✓ How do you communicate with potential customers?

o Advertisements in guides, magazines, newsletters etc.

o Direct sales – farmers’ markets, in-home sales

o Internet sales: website, e-newsletter

o Home-sales-parties

o mail-outs

✓ How much do you spend on marketing: promotion and sales?

✓ What are your future marketing plans?

4. Appendices

✓ Company documentation: formation records, partnership agreements

✓ Info about products – price lists, samples

✓ Sales records and sales literature

✓ Accounting documents – financial statements

✓ Competitors price lists and records

✓ Resume of owner(s), letters of reference

Resources

There are a large number of resources to help you:

* Books * websites * cd’s with blank plans to complete *government agencies

* Business planning experts, lawyers, accountants, banks

Websites:

* Womens Enterprise Centre - womensenterprise.ca

* Canadian Womens Foundation – Funder -

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