Build a Better Business Plan

Young, pre-launch businesses aren't the only companies that need a business plan. The business plan is integral to your company's success and a must-have if you seek a moderate to large small business loan from a bank or the U.S. Small Business Administration (SBA).

You may scoff at the notion of writing a business plan, knowing that your company has been running just fine without one for the last few years. Or, you may think you checked that To-Do item off your list years ago when your enterprise launched.

Think again. The business plan is a living document that is as vital to the business' first day as it is its tenth year.

The start of the New Year is a perfect time to either draw up a business plan, or update an old plan. This essential business document helps you track your business' developments, as well as clarify your short-term and long-term business goals.

It also acts as a calling card, introducing your company to outsiders and helping you recruit new personnel — and obtain financing. If you intend to apply for all but the smallest loans from the Small Business Administration, you must include a comprehensive business plan.

Getting Started

If you are having trouble getting started with your plan, QuickBooks Premier 2003 and QuickBooks Enterprise Solutions Business Management Software includes a new feature, the Business Planner. This feature includes all the tools you need to begin developing your document, and it helps you build a plan that is based on the SBA's recommended format.

Initially, the Business Planner leads you through a series of questions to gain information about the company, its assets, and its liabilities. The software also will jump-start your income and expense projections by automatically basing them on the historical QuickBooks financial data — potentially saving hours or even days of time. Combining this company information and financial data, the Business Planner creates the required 3-year projected balance sheet, profit-and-loss statement and statement of cash flows.

For many young, small businesses, projecting the long-term financial outlook is the most difficult aspect of the business plan. Start-up owners are unsure what to forecast for the required line items, and the Business Planner can ease this task.

One important item to note: the Business Planner allows you to adjust and customize your forecast. Even though you may be unsure what numbers to project for the three-year forecast, keep them realistic. Over-inflated numbers are disconcerting to loan officers.

Financial statements and projections are a valuable part of the business plan, but the document has other sections, too. The Business Planner includes a business plan template that will help you compose all the document's primary sections. These nine sections are:

• Cover page
• Executive summary
• The company description
• Management
• The product
• The market
• Competition
• Marketing
• Financial statements and projections

The Business Planner will guide you through each section, explaining the purpose and offering tips on what to include. If you find yourself with writer's block and need to jumpstart your creativity, click on "Example" and read the sample text. While it's tempting to lift the text and tweak it for your business, don't. This copy is meant only as a guide, and for your business plan, you should personalize the document. Take time to thoughtfully write a business plan that reflects your unique business.

When complete, the document should have no more than 30 single-spaced pages, excluding ancillary documents, such as an overview of competitors, analyst's market outlooks and projected finance reports. Use the full-color charts in the Business Plan feature to illustrate visually what your financial plans are. The plan should be easy to understand, and the writing should be active and exciting and use specific details whenever possible. Remember, this document represents your business and should be polished and professional.

Once you have completed your business plan, ask others to critique it. The information is confidential, so be careful who you choose to read the document. Friends, significant others, mentors and colleagues can provide much needed constructive criticism.