“Why do I need a written business plan and how do I write a good one?” is a question that SCORE mentors often hear from people thinking about starting a small business.
According to SCORE’s guide to writing a business plan (tinyurl.com/k6plsmq) the value of creating one is the process of researching and looking at your business idea critically. It takes time upfront but avoids costly mistakes later. Many small businesses launch without a plan but if you need funding, a business plan is critical. The components include:
- Executive summary — A snapshot of your business and your profile and goals, usually written last.
- Market analysis — It’s essential to research your business industry, market and competitors before launching your business.
- Company description — Provides information on what you do, what differentiates your business from others and the markets your business serves
- Organization and management — Identify the best organization and management structure.
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- Marketing and sales — Explains how you plan to market your business and identifies your sales strategy
- Service or product line — Tells the story of what you are selling, and how it benefits your customers
- Financial projections — If you need funding, providing realistic financial projections is critical.
- Appendix — Optional, but a useful place to include information such as résumés, permits and leases.
It usually takes several weeks to complete a good plan. Most of the time is spent in research and re-thinking your ideas and assumptions. That’s the value of the process.
Diane Diamond is a mentor and vice president of media relations for SCORE Southern Arizona, a nonprofit group that offers free small-business counseling and mentoring by appointment at several locations. For more information, go to www.southernarizona.score.org, email mentoring@scoresouthernaz.org, or call 505-3636.