4 | The Business Plan

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Chapter 4

The Business Plan


 

Go to The Business Plan Overview Video

Click the image above to play the "The Business Plan Overview Video"

Focus Area 1

Introducing the Business Plan

Roadmap and laptopIntroduction

This chapter introduces the business plan. The business plan is a road map for getting your business started. It provides specific information about what is needed to get your business up and running. It builds on information you gathered in Chapter 3: Business Feasibility.

A major reason businesses fail is lack of planning. The business plan helps you think about strategies and make decisions before you open your business. The business plan allows new business owners to make mistakes on paper before real money and customers are on the line.

Your business plan is a document that can be reviewed by different business experts so they can give you advice. It also contains information you’ll need to share with funding sources, like banks, before they’ll give you a loan.  

Click on the Parts of the Business Plan button for an overview of the business plan sections.

If you are unsure how to navigate this site, click on the Website Navigation heading at the very top of the page.

You can download a print-only version of Chapter 4: The Business Plan (PDF) for reference. You can download additional materials with this chapter including the Business Plan Outline (DOC).

 

Laptop with notebook next to itExecutive Summary

You will use the executive summary to convince your counselor, VR agency, and lenders that your business is worthwhile. Often, lenders use the executive summary as a screening tool to decide if they will review the full business plan. This is the first thing people will read about your business, so the executive summary needs to be clear, concise, and convincing.

Click on The Executive Summary button for a description.

 

Woman writing in lined notebookBusiness Description

The business description describes your business and how it fits within the larger industry. It is broken into different parts:

  • Company description
  • Business history
  • Form of ownership
  • Industry trends
  • Background information about the owner

Click on the Company Description and Business History buttons to learn about the first two parts of the Business Description. 

 

Business owner holds woodworkign utensilOwnership

Te ownership section is where you explain which type of business ownership you will use for your business. It also includes a list of all owners, shareholders or partners. Business ownership options include:

  • Sole Proprietorship

  • Partnership

  • Limited Liability Company

  • Corporation

Each form of ownership has advantages and disadvantages, depending on your specific business and financial situation. Identifying the business structure that’s best for you can be confusing. 

We recommend working with an expert, such as a Small Business Development Center advisor. If you receive SSI or SSDI payments, you should also work with a certified benefits planner so you know how your benefits may be impacted.

Click on the Ownership Types button to learn more about the different business structures and the pros and cons of each.

Click on the Resources button for links to help you learn more about business structures.

 

Chart showing upward trendIndustry Trends

The industry trends section of the business description is where you describe your business’s industry. This includes a description of your competition and possible barriers to entry. To do this, you will need to do some research about your industry.

Click on the Industry Research and Information Sources buttons to help you get started.

 

Woman talks on the phone at office deskOwner Capacity

This owner capacity section provides information about you, the business owner. It includes details about:

  • Your training

  • Your experience in the business industry

  • Your management experience

  • Your marketing experience

  • Other expertise or resources you will use, like business advisors

Use information from the About You worksheet you completed in Chapter 3 to help complete this section.

Folded corner on a book pageChapter Review

This chapter began with an overview of the business plan sections. Business plans usually include an executive summary, business description, marketing plan, operations plan, and financial plan.

The different parts of the business description section include:

  • Company description
  • Business history
  • Form of ownership and ownership interest
  • Industry trends
  • The business owner’s background

Click on the Prepare button to start writing your business plan.

Counselors, click on the Counselor Review button for things to consider as you discuss the client's Business Plan.

 

Focus Area 2

Check Your Understanding

Question mark drawn on paper Checking the Business Plan

This section helps you check your understanding of the material covered in this chapter. Click on the Check Your Understanding button and go through the questions on the slides. Write down your answers on a separate piece of paper. Check your answers by clicking on the Review Your Answers button.