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Posted by: Charles P Myrick CPA Posted on: Aug 13 2019 Posted in: small business

How to Write a Successful Business Plan For Your Company

As a CPA I help many small business owners with tax planning and filing. That means I see the businesses that succeed as well as those who don't. My advice is that if you’re a small business owner, you need a business plan. To write a successful plan you must know everything about your company, your product or service, and the market competition. 

 

How to Write A Small Business Plan

Before you start writing out your plan, you need to understand that not all business plans are created equal. A business plan that isn’t well-thought out, or that focuses on the wrong things, can end up doing more harm to your business than no plan at all.

For a business plan to be successful, it should first and foremost be realistic. Make a plan that can be executed; impossible deadlines, milestones, or forecasts will only lead to disappointment. At the same time, your deadlines, milestones, and forecasts should be concrete. Hard dates for when you will achieve certain objectives should be enforced, and you should have clear objectives that you can strive for.

Elements of a Traditional Business Plan

A traditional business plan is comprehensive and should be used if you plan to request financing from traditional sources. When you write your business plan, use the sections that make the most sense for your business and your needs. Traditional business plans use some combination of these nine sections.

Executive summary

Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

Company description

Use your company description to provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organization, or businesses your company plans to serve.

Explain the competitive advantages that will make your business a success. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths.

Market analysis

You'll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now's the time to answer these questions.

Organization and management

Tell your reader how your company will be structured and who will run it.

  • Describe the legal structure of your business. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you're a sole proprietor or LLC.
  • Use an organizational chart to lay out who's in charge of what in your company. Show how each person's unique experience will contribute to the success of your venture. 

Service or product line

Describe what you sell or what service you offer. Explain how it benefits your customers and what the product lifecycle looks like. Share your plans for intellectual property, like copyright or patent filings. If you're doing research and development for your service or product, explain it in detail.

Marketing and sales

There's no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs. Your goal in this section is to describe how you'll attract and retain customers. You'll also describe how a sale will actually happen. 

Funding request

If you're asking for funding, this is where you'll outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next five years and what you'll use it for.

Financial projections

Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.

  • If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.
  • Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly — or even monthly — projections. 
  • This is a great place to use graphs and charts to tell the financial story of your business.  

Appendix

Use your appendix to provide supporting documents or other materials were specially requested. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, or patents, legal documents, permits, and other contracts.

Source:  Small Business Administration

A small business advisor can play a significant role in your business planning and strategies. A well developed business plan will focus your efforts and give you concrete goals to work towards. It may be easier for you to make smart decisions and have a profitable company if you have a professional by your side.

Let us help you plan ahead for growth!

Charles

 

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Charles P Myrick CPA, specializes in accounting and business advisory services for new business start ups and entrepreneurs. If you are a small business owner, give us a call. We invite you to learn more about the small business accounting services that are available: (202) 789-8898.

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