Small Business Plans
The Components of Small Business Plans
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A starting company or business needs a business plan. And most businesses start small, thus small business plans are needed. Commercial banks and lending companies as well as the Small Business Administration (SBA) requires a proprietor or company to submit a business plan in applying for a loan, together with other financial documents. The small business plan is used by these lenders in evaluating the borrower. A good small business plan can help you obtain your funding and also draw in investors into your business.
For starters, there are many resources that offer help in writing small business plans. There are different websites that offers guides and examples on writing good small business plans. Some companies or businesses also ask for professional assistance by hiring business writers to do the business plan for them
Commonly, small business plans contain the following information: a cover sheet with the purpose, a table of contents, and the body of the business plan. The body of small business plans typically has two parts. The first part describes the business nature. Stated in this section are the products, marketing plans, operating procedures, manpower, business insurance and competitors. The second part contains the financial aspects of the business plan. This includes balance sheet, cash flow analysis, loans, list of assets, break even analysis, revenue statements, and other financial data and statements. Some small business plans can have a third part containing other supporting financial documents and contracts like an appendix.
Also part of your small business plan is to decide on the type of business you want – single proprietorship, a partnership or a corporation. Business partnership is the mainstream in starting businesses nowadays. A partnership is having two or more individuals joining to start up a business wherein the revenues and expenses are split among them, or depending on their agreement. Members of a business partnership are brought together because of their need for each other in the business. Usually, one has the knowledge about the business while the other has the finances to start the business.
Choosing your business partner is also part of that unwritten small business plan. Not only does the internet offer help in writing small business plans, it also connects businessmen to the partner they’re looking for. Be aware, however, that while you’re looking for your business partner, you have to differentiate between an investor and a partner. Partners are investors but investors are not necessarily your partners. The difference is that partners operate the business with you and get a share from the profit while investors supply you with the funds but do not provide inputs nor get percentage from the business profit.
Choose your business partner wisely, and come up with a good small business plan to attract more investors and see your business grow.