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Editor's note: This article is excerpted from Rule's Book of Business Plans for

Startups , from Entrepreneur Press


For a startup business, creating a business plan is like creating a game plan
in sports. You need to scout out all the information to create a winning
strategy for the game. While business plans for existing companies may have
a special focus, such as setting overall goals, reviewing specific operations,
evaluating new products, assessing new technology in the industry, or some
other specific purpose, the business plan for a startup company is the
blueprint for its formation, its operation, and its success. A business plan
exposes a new company's strengths and weaknesses. It reveals ways to
capitalize on the strengths and minimize the weaknesses, uncovers every
facet of the business that can be developed, and points to the best method
for that development. It provides a structure for the company's pursuit of the
winner's trophy.
Even though creating a business plan takes time, thought and effort, and may
seem like an impediment to getting on with opening or growing your new
business, it is imperative in today's competitive business climate for you to
have all relative information available and evaluated before opening your
doors. With a thoughtfully prepared business plan you will enter the business
world prepared, ready to run your business and ready to compete.
Although researching and writing your business plan may seem like a
monumental task, with preparation it can be quite painless. As you go
through the process, you will develop your knowledge and understanding of
your business, improve your chances of success, and diminish your risks of
failure as a startup owner.
Prior to writing your business plan, there are several issues you must resolve.
It is beyond the scope of this text to cover all of these in depth; however, a
basic checklist with a few recommended reference books is provided, so you

can explore some of the subjects more thoroughly. As an entrepreneur of a


startup company:
Are you prepared to operate a business?
Have you already decided upon your product(s) or service(s)?
Have you investigated other types of businesses? Have you explored
the broad economic business sectors: manufacturing, wholesale, retail,
service ...? Have you considered other industries within the sector of
your choice? Have you thought about what types of businesses are
strongest now and for the future?
Have you checked out franchises? To check out the possibilities and
benefits of becoming a franchise outlet owner or franchisor, read Erwin
Keup's Franchise Bible and my books, No Money Down: Financing for
Franchising and The Franchise Redbook.
Do you have a location in mind? Have you researched the principles of
site selection: physical site needs (address, neighborhood, interior lot,
corner lot), cost effectiveness, interior space, exterior space, visibility,
traffic volume (which side of the street and times of the day), and
accessibility? Are you familiar with the advantages and disadvantages
of types of sites, such as freestanding buildings, storefronts, regional
malls, and many others? Are you familiar with the principles of lease
negotiation? See Luigi Salvaneschi's Location, Location, Location.
Have you located the necessary business consultants--accountant,
attorney, banker, and others? One resource is The Small Business
Insider's Guide to Bankers by Suzanne Caplan and Thomas M.

Nunnally.
Do you know your financial position, your credit rating, your investment
costs? The author's No Money Down: Financing for Franchising covers
these topics in detail for any business, not only franchising.
Before going forward, it is assumed you have done the basic homework for
each of the elements above and that:
You are ready to go into business
You have your basic business concept
You have decided on your basic product(s) or service(s)
You have your location and facility
You have a business accountant and attorney
You understand your financial position and your investment costs
While you may have already explored the following business concepts during
your startup stage, you will be reconsidering and reevaluating these as you
develop your business plan:
Vesting
Business objectives
Mission statement
Keys to success
Industry analysis
Market analysis

Competitor analysis
Strategies
Marketing plan
Management
Organizational structure
Operations
Financial pro formas
Break-even analysis
Financial requirement
Don't be concerned if you aren't familiar with all of these concepts. Writing a
business plan for your new business is a straightforward process that you can
move through step by step to completion. The whole process can be
accomplished in two to four weeks, depending on your business.

A Professional Presentation
In surveying many successful business plans, you will find that no one format
fits them all. Depending upon the nature of the business, certain topics take
precedence over others. Often the owners write their business plans, since
they know the most about their business operation and management and
they have learned what elements to include to make the best impression.
A complete business plan for a startup company is best organized according
to the logical development of the business and is comprised of at least 12
basic components.
1. Executive Summary: By definition, to summarize the elements of your
business

2. Company Description: For identification, to introduce your readers to your


company and your business concept
3. Industry analysis: To provide a picture of your industry and of the position
of your business within the larger framework
4. Market and Competition: To evaluate what you are getting into. While
some business plan proponents separate market and competition, it takes an
examination of both, together, to come to one very important final conclusion:
your market share. Consequently, it is best to examine and present them
together.
5. Strategies and Goals: To analyze the market and your competition in order
to determine how and where your company or products or services fit and to
maximize your position with your target market
6. Products or Services: To describe your products or services and how they
match your findings of your strategies and goals
7. Marketing and Sales: To market your products or services with the best
positioning and to forecast your sales based on the findings of categories
four, five, and six, in that order
8. Management and Organization: To present the management and
personnel who will run the show. This section can be separated into two
sections for more complex companies.
9. Operations: To explain how the business is run
10. Financial Pro Formas: To forecast successful financial performance for all
activities
11. Financial Requirement: To present the type and amount of financing
needed, based on the previous sections, to accomplish the whole plan

12. Exhibits: By definition, to close the plan and separate any supporting
materials that would otherwise interrupt the flow of the story
A professionally written startup business plan has all 12 of these basic
sections presented in the order of the outline. Most of the segments listed will
also be reflected in the same order of presentation, although there may be
slight variances depending on your type of business. When your business
plan is written to obtain financing, the financial requirement section may be
tailored either as a loan request or as an investment offering proposal, and
then titled accordingly.

A Winning First Impression


The saying, "There's no second chance to make a good first impression," is
highly appropriate when it comes to the opening sections of your business
plan and its overall appearance. With current desktop publishing, business
plans are looking more professional--prospects are competing for neatness
and an impressive presentation that sets them apart.
Format. As to format, the norm is to bind your business plan in booklet
form with high-quality materials. Better ones have quality report covers
in dark or rich colors and are labeled on the front. The title page serves
better than a label if laminated or positioned behind a windowed cover
or behind a full clear cover. Most types of binding are available at copy
centers: Ibico and GBC presentation bindings, Wire Bind, and
Velobinder are a few of the better ones. Some businesses go the extra
step to have printed covers or printed binding strips. Three-ring binders
have been used for years and are still acceptable, but you improve your
odds for making that favorable first impression by using the latest and
most professional-looking, high-tech materials available.
Page layout. Make sure the layout of each page is balanced and

artistically pleasing, with a lot of open or negative space--paragraphs,


lines, and characters should not be too closely spaced. With desktop
publishing, many types of fonts are available. The text is generally
easier to read if you use a font with serifs, such as New Times Roman,
Charter or Garamond, and the margins are justified. For a professional
quality, use a sans-serif font, such as Arial, Modern or Verdana, for
titles, sideheads, tables and outlines. Choose one of each and stay
consistent throughout the presentation.
Using the latest software printing design tools, such as boxes, borders,
shadow lines, and enlarged and bold characters, can add a professional look
if correctly done without drawing attention to their use and stealing the show
from the material itself. Color printing, judiciously placed, is being used more
all the time.
Tabs and titles. Each subject, with titled heading, should have its own
section and be separated with indexed partitions keyed to the table of
contents. Tabbed index partitions make it easier to locate information,
especially during a personal presentation. Another feature is to use
colored partitions, preferably muted or soft colors that coordinate with
the color of the cover and with the colors of any charts or graphs inside.
Instead of custom tabs, some plans are assembled with printed tab
indices with miniature plastic covers, but if you have access to
preprinted laminated tabs, they are preferable. Avery has Index Maker
dividers for ink-jet and laser printers that you can customize with basic
desktop software. A recent innovation is hidden tabs that protrude past
the pages but not the cover.
Within each section, set off subsections or segments with crossheads usually
set bold in a sans-serif font. When these are justified to the right or left

margin, they are referred to as sideheads.


Color and charts. Charts, graphs, and illustrations are commonly
acceptable if appropriate to the text. Color is often better than black
and white; however, choose reds and blues, not chartreuses, yelloworanges, or some other unusual color. In fact, if you are going to use
extensive colored charts and graphs, choose a theme of three or four
rich colors and use them consistently throughout the work. Reserve
photographic prints for the exhibits. Even then, they should be
presented in protective sheets or converted to color copies and labeled
or captioned in font styles consistent with the rest of the business plan.
If needed in the main body of the business plan, pictures look more
professional when scanned and merged into the layout.
Printing. Use laser or ink-jet printers to print on paper of stationery
quality. Paper should be the brightest white you can find, laser quality,
or one of the muted color rsum stocks in soft gray or ivory.
Staying consistent by using the same type of paper for text, graphs,
charts, and illustrations yields a quality professional look. Using bits and
pieces of different paper gives the impression the plan was thrown
together.
Proofreading and copyediting.Have your figures checked by an
accountant and the text proofread by an editor or proofreader. An
accurate, easy-to-read, and well-organized text will convey
professionalism and credibility. Too often this important step is avoided
or forgotten: despite all the work that has gone into creating an
impressive presentation, typos, missing words, poor sentence
construction, and figures that don't add up become a significant part of
that first impression made on a reviewer.

Important Points to Remember


An accurate, easy-to-read, and well-organized business plan conveys
professionalism and credibility.
You improve your odds for making a favorable first impression by using
the latest and most professional-looking, high-tech materials available.
Don't necessarily try to balance the material from section to section.
Place your emphasis in the proper perspective and accent the features
that are most important for your business.
Always include a cover letter with your business plan, because it may
get passed on to other staff members who won't know about your
venture.
Excerpted fromRule's Book of Business Plans for Startupsby Roger Rule, from
Entrepreneur Press