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What's a business plan and do I need one?
Q: What's a "business plan" and do I need one?
A: A business plan is a structured document that is a sales pitch for your new or expanding business that you will use when attempting to obtain formal financing. 99% of small or home-based businesses will not need a business plan since either financing is not required or is being obtained other than by bank loans, etc.
A business plan is not a planning document and does not take the place of a strategic plan for your business. (Learn more about the importance of strategic planning in The Small Business Start-Up Guide).
The business plan is typically 10-50 pages in length and includes the following major sections. The actual length will be a function of the complexity of your business and how much money you are looking to obtain. A small home-based business looking for a bank loan would only require a "minimal" plan.
- Table of Contents
- Executive Summary - A short description of the business.
- Company Description - Details of what the business is about
- The Market - Who is going to buy your product/service and why
- The Product or Service - What you are selling
- The people - most important part of the plan! Who is going to make it all work.
- Sales and Promotion Plans - Details of how you will get the word out
- Financial Information - How the money will be used
- Miscellaneous - There are plenty of references (check the library and the Internet) for writing a business plan. Check them out.
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