challenges of a business plan

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Challenges of a business plan academic ghostwriting websites us

Challenges of a business plan

The worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin. Market size, acceptable pricing, customer purchasing behavior, time to commercialization--these all involve assumptions. Wherever possible, make sure you check your assumptions against benchmarks from the same industry, a similar industry or some other acceptable standard. Tie your assumptions to facts. A simple example of this would be the real estate section of your plan.

Every company eventually needs some sort of real estate, whether it's office space, industrial space or retail space. You should research the locations and costs for real estate in your area, and make a careful estimate of how much space you'll actually need before presenting your plan to any investors or lenders. The plan includes inadequate research. Just as it's important to tie your assumptions to facts, it's equally important to make sure your facts are, well, facts.

Learn everything you can about your business and your industry--customer purchasing habits, motivations and fears; competitor positioning, size and market share; and overall market trends. You don't want to get bogged down by the facts, but you should have some numbers, charts and statistics to back up any assumptions or projections you make.

Well-prepared investors will check your numbers against industry data or third party studies--if your numbers don't jibe with their numbers, your plan probably won't get funded. You claim there's no risk involved in your new venture. Any sensible investor understands there's really no such thing as a "no risk" business.

There are always risks. You must understand them before presenting your plan to investors or lenders. Since a business plan is more of a marketing tool than anything else, I'd recommend minimizing the discussion of risks in your plan. If you do mention any risks, be sure to emphasize how you'll minimize or mitigate them. And be well prepared for questions about risks in later discussions with investors. You claim you have no competition. It's absolutely amazing how many potential business owners include this statement in their business plans: "We have no competition.

If that's what you think, you couldn't be further from the truth. Every successful business has competitors, both direct and indirect. You should plan for stiff competition from the beginning. If you can't find any direct competitors today, try to imagine how the marketplace might look once you're successful.

Identify ways you can compete, and accentuate your competitive advantages in the business plan. The business plan is really no plan at all. A good business plan presents an overview of the business--now, in the short term, and in the long term. However, it doesn't just describe what the business looks like at each of those stages; it also describes how you'll get from one stage to the next.

In other words, the plan provides a "roadmap" for the business, a roadmap that should be as specific as possible. It should contain definite milestones--major targets that have real meaning for your business. For instance, reasonable milestones might be "signing the th client" or "producing 10, units of product.

Smoothing Out the Rough Spots Once you know what mistakes not to make, there are still a few steps you need to take to make your business plan "bulletproof. Writing a business plan is hard work--many people spend a year or more writing their plan.

In the early, drafting stages, business plan software can be very helpful. But the hard part is developing a coherent picture of the business that makes sense, is appealing to others and provides a reasonable road map for the future. Your products, services, business model, customers, marketing and sales plan, internal operations, management team and financial projections must all tie together seamlessly.

If they don't, you may not ever get your business off the ground. Andrew Clarke is the CEO of Ground Floor Partners , a business consulting firm that helps early-stage, small and middle-market businesses grow through design and execution of sound business strategies.

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation. Business Plans. When it comes to creating a business plan that attracts investors, these tips will help you get it right the first time. Next Article link. Opinions expressed by Entrepreneur contributors are their own.

More from Entrepreneur. Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation. Learn More. Get A Quote. Discover a better way to hire freelancers. From business to marketing, sales, finance, design, technology, and more, we have the freelancers you need to tackle your most important work and projects, on-demand. The challenges of writing a business plan vary.

Do you have all the information about your business that you need? Does your industry have strict guidelines that you must adhere to? To help you prepare for some of the common issues you may face, we asked business owners, strategists, and experts what the most difficult part of writing a business plan is and how to overcome it. Here are 10 of the most common challenges you may face when writing your business plan. Lock yourself in a room, turn off your phone, and focus. It is difficult to project figures on a brand-new business with, possibly, a brand-new concept.

There is no roadmap, no one to follow. The best you can do is find a similar company and try to gauge what they are making. You need to know whom you'll sell to and how big the market is to estimate with some accuracy as to how many people you can reach and sell your product or service to. The more concise and focused a plan is, the more likely business owners are to achieve the goals they have set for themselves and their business. If you tell a lousy story, people won't want to invest.

When people can't see the vision of the plan, they won't take action to pursue the plan. In addition, by having set goals that align with your plan, you have measurable targets to track your progress. Entrepreneurs are, by nature, dreamers and optimists, and business plans require them to challenge their assumptions about market opportunity, the competition, the value of their product, and growth projections. That is where they get caught up in defining an aspirational but somewhat realistic business plan.

If you seek capital, numbers are of the greatest importance. Investors and lenders will look at projections and determine the business's prospects for profitability. They will want a return on investment over time, whether it be a year, five years or whatever the parties agree on.

There is a happy medium between these worlds, and this is where the most success can be found. Many companies create plans, but too often, those plans sit on the shelf with actions not done, targets not met. Although you won't accurately predict everything for your business, you can take pre-emptive steps to reduce the number of complications that may arise.

For example, familiarize yourself with the business plan process by researching business plans and identifying how others successfully executed their plans. You can use these plans as a basis, but Cottrell recommends taking it one step further: talk to small business owners and others who have experience. They can seek out capital innovation clubs in their area and get additional expertise.

If you research how to write a business plan and still don't feel comfortable writing one, you can always hire a consultant to help you with the process. Additional reporting by Brittney Morgan. Some source interviews were conducted for a previous version of this article.

How to overcome the challenges of writing a business plan. Skye Schooley. Staff writer. Write a business plan to establish a business focus, secure funding and attract investors. Common challenges of writing a business plan include identifying financials, demographics and workable goals. Some entrepreneurs struggle with creating a business plan that is concise, interesting and informative enough to prove that their business idea is viable.

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While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing. Spending your time soothing an irritated customer might help protect that one relationship - but focusing instead on recruiting the right salesperson could lay the foundations of substantial new sales for years to come.

For example, your business might be increasingly at risk unless you take steps to ensure your intellectual property is properly protected. If you are focusing on individual marketing campaigns, you might need to devote more resources to developing your brand. A disciplined approach to management focuses on leading employees, developing your management team and building your business strategy. Instead of treating each problem as a one-off, you develop systems and structures that make it easier to handle in the future.

All businesses produce and rely on large volumes of information - financial records, interactions with customers and other business contacts, employee details, regulatory requirements and so on. It's too much to keep track of - let alone use effectively - without the right systems. Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively.

The larger your business grows, the harder it is to ensure that information is shared and different functions work together effectively. Putting the right infrastructure in place is an essential part of helping your business to grow. Documentation, policies and procedures also become increasingly important.

The informality that might work with one or two employees and a handful of customers simply isn't practical in a growing business. You need proper contracts, clear terms and conditions, effective employment procedures and so on. Many growing businesses find using established management standards one of the most effective ways of introducing best practice.

Quality control systems can be an important part of driving improvements and convincing larger customers that you can be relied on. Investing in the right systems is an investment that will pay off both short and long term. You benefit every day from more effective operations. If you ever decide to sell the business, demonstrating that you have well-run, efficient systems will be an important part of proving its value.

Entrepreneurs are the driving force behind creating and growing new businesses. All too often, they are also the people holding them back. The abilities that can help you launch a business are not the same as those you need to help it grow. It's vital not to fool yourself into valuing your own abilities too highly. The chances are that you'll need training to learn the skills and attitudes required by someone who is leading growth.

To grow your business, you need to learn to delegate properly, trusting your management team and giving up day-to-day control of every detail. It's all too easy to stifle creativity and motivation with excessive interference. As the business becomes more complex, you also need to develop your time management skills and learn to focus on what's really important.

As your business grows, you may need to bring in outsiders to help. You'll want to delegate responsibility for particular areas to different specialists, or appoint a non-executive director or two to strengthen your board. As you start tackling a new opportunity, someone who has experience of that activity can be vital. For many successful entrepreneurs, learning to listen to - and take - advice is one of the hardest challenges they face.

But it may also be essential if you are going to make the most of your opportunities. Some entrepreneurs, recognising their own limitations, even appoint someone else to act as managing director or chairman. Complacency can be a major threat to a growing business. Assuming that you will continue to be successful simply because you have been in the past is very unwise. Regularly revisiting and updating your business plan can help remind you of the changing market conditions and the need to respond to them.

See the page in this guide on planning ahead. An up-to-date plan helps you identify what action you need to take to change your business and the way it operates, for example:. You need to be fully committed to your strategy, even if it takes you out of your comfort zone.

This may involve hard decisions - for example making employees redundant or switching business away from suppliers you have become friends with. But unless you're prepared to do this, you risk putting your business at a dangerous competitive disadvantage.

Our information is provided free of charge and is intended to be helpful to a large range of UK-based gov. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. As a result: The websites operators cannot take any responsibility for the consequences of errors or omissions.

You should always follow the links to more detailed information from the relevant government department or agency. Any reliance you place on our information or linked to on other websites will be at your own risk. You should consider seeking the advice of independent advisors, and should always check your decisions against your normal business methods and best practice in your field of business. The websites operators, their agents and employees, are not liable for any losses or damages arising from your use of our websites, other than in respect of death or personal injury caused by their negligence or in respect of fraud.

Click on one of the two buttons to access the content you wish to view. COVID Remote personalized support Our physical offices are closed, but our advisers remain at your disposal to help you plan the resumption of your activities. Guide The challenges of growing a business - and how to meet them Share on:. Keeping up with the market Planning ahead Cash flow and financial management Problem solving The right systems Skills and attitudes Welcoming change.

Changing to suppliers who can grow with you and meet your new priorities. As your business grows, consistent quality and reliability may be more important than simply getting the cheapest offer. Renegotiating contracts to take account of increased volume. Training and developing employees.

Your own role will also evolve as the business grows. See the page in this guide on skills and attitudes. Making sure that you keep up to date with new technologies. Share on:. Need help? Our qualified agents can help you.

Starting a business? And one of the first steps to taking on that challenge is creating a business plan, a task that can be pretty daunting no matter how great your idea is. What is the most difficult part of writing a business plan? Here are 13 challenges you will face writing your business plan. Lock yourself in a room, turn off your phone and focus. It is difficult to project figures on a brand-new business with, possibly, a brand-new concept.

There is no roadmap, no one to follow. The best you can do is find a similar company and try to gauge what they are making. The hardest but most important piece is getting your target demographics dialed in properly. You need to know who you will be selling to and how big the market is to estimate with some accuracy how many people you can reach and sell your product or service to.

Predicting the unforeseen technology variables that the future holds is a challenge. Most businesses that started nearly 10 years ago, there was no marketing on Facebook , Twitter and Instagram did not yet exist. One of the top challenges is keeping it short and sweet. The more concise and focused a plan is, the more likely business owners are to achieve the goals they have set out for themselves and their business.

The hardest thing about writing a business plan is being able to tell your story in such a way that people buy into your idea. Establishing clear, concise and understandable goals, these goals must also be realistic.

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Focus on your niche, what differentiates you from the competition, how you plan to compete in the marketplace and paint accurate picture of what the industry is like now and where you see it going in the future. Do not hide your weaknesses but do not highlight them too much. Every business has its weaknesses but by hiding them or highlighting them too much you will put off the investor. The only way to address these weaknesses is to include a detailed strategy of how you plan address these problems.

Have a secure plan how to provide your service or distribute your product. Including all possible channels in your plan without substantiating why these are the correct channels and how they will reach your target market will make the investor assume that you have just thought of the list off the top of your head. The ability to articulate your strategy about how your product or service will reach your client is vital. If you were an investor, would you want to read a page business plan?

Most investors have a mental checklist of 10 to 12 points that they are looking for in the plan, everything else just gets in the way. The purpose of your plan is not to demonstrate the depth of your knowledge but to focus on the key elements of your business. Clear and concise writing is always appreciated and if you have additional information which you would like to include in the document, create an appendix.

Highlighting different target markets, quoting conflicting statistics or having competing strategies within a plan will make an investor challenge whether you know your business and its market well enough. Sections of plans are often written on different days or by different people and then pasted together into one document resulting in inconsistency. Take time to review each section of your business plan.

Make sure you ask several people to review your plan before submitting it. It is easy for you to glaze over spelling mistakes and grammatical errors because you know the information inside and out. Another set of eyes will help your plan to look more professional and ensure that it reads correctly. No matter what stage of business, or what problem you face, Small Business BC offers a range of seminars and one-on-one advisory sessions to suit any business.

Note: you can withdraw your consent at any time - for more information see our Privacy Policy or Contact Us for more details. Planning ahead helps you anticipate your financing needs and arrange suitable funding. For many growing businesses, a key decision is whether to bring in outside investors to provide the equity needed to underpin further expansion.

New businesses often run in perpetual crisis mode. Every day brings new challenges that urgently need resolving and management spends most of their time troubleshooting. As your business grows, this approach simply doesn't work. While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing.

Spending your time soothing an irritated customer might help protect that one relationship - but focusing instead on recruiting the right salesperson could lay the foundations of substantial new sales for years to come. For example, your business might be increasingly at risk unless you take steps to ensure your intellectual property is properly protected. If you are focusing on individual marketing campaigns, you might need to devote more resources to developing your brand.

A disciplined approach to management focuses on leading employees, developing your management team and building your business strategy. Instead of treating each problem as a one-off, you develop systems and structures that make it easier to handle in the future.

All businesses produce and rely on large volumes of information - financial records, interactions with customers and other business contacts, employee details, regulatory requirements and so on. It's too much to keep track of - let alone use effectively - without the right systems. Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively.

The larger your business grows, the harder it is to ensure that information is shared and different functions work together effectively. Putting the right infrastructure in place is an essential part of helping your business to grow. Documentation, policies and procedures also become increasingly important. The informality that might work with one or two employees and a handful of customers simply isn't practical in a growing business. You need proper contracts, clear terms and conditions, effective employment procedures and so on.

Many growing businesses find using established management standards one of the most effective ways of introducing best practice. Quality control systems can be an important part of driving improvements and convincing larger customers that you can be relied on.

Investing in the right systems is an investment that will pay off both short and long term. You benefit every day from more effective operations. If you ever decide to sell the business, demonstrating that you have well-run, efficient systems will be an important part of proving its value. Entrepreneurs are the driving force behind creating and growing new businesses. All too often, they are also the people holding them back. The abilities that can help you launch a business are not the same as those you need to help it grow.

It's vital not to fool yourself into valuing your own abilities too highly. The chances are that you'll need training to learn the skills and attitudes required by someone who is leading growth. To grow your business, you need to learn to delegate properly, trusting your management team and giving up day-to-day control of every detail. It's all too easy to stifle creativity and motivation with excessive interference.

As the business becomes more complex, you also need to develop your time management skills and learn to focus on what's really important. As your business grows, you may need to bring in outsiders to help. You'll want to delegate responsibility for particular areas to different specialists, or appoint a non-executive director or two to strengthen your board. As you start tackling a new opportunity, someone who has experience of that activity can be vital. For many successful entrepreneurs, learning to listen to - and take - advice is one of the hardest challenges they face.

But it may also be essential if you are going to make the most of your opportunities. Some entrepreneurs, recognising their own limitations, even appoint someone else to act as managing director or chairman. Complacency can be a major threat to a growing business. Assuming that you will continue to be successful simply because you have been in the past is very unwise. Regularly revisiting and updating your business plan can help remind you of the changing market conditions and the need to respond to them.

See the page in this guide on planning ahead. An up-to-date plan helps you identify what action you need to take to change your business and the way it operates, for example:. You need to be fully committed to your strategy, even if it takes you out of your comfort zone. This may involve hard decisions - for example making employees redundant or switching business away from suppliers you have become friends with. But unless you're prepared to do this, you risk putting your business at a dangerous competitive disadvantage.

Our information is provided free of charge and is intended to be helpful to a large range of UK-based gov. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business.

Despite our best efforts it is possible that some information may be out of date. As a result: The websites operators cannot take any responsibility for the consequences of errors or omissions. You should always follow the links to more detailed information from the relevant government department or agency. Any reliance you place on our information or linked to on other websites will be at your own risk.

You should consider seeking the advice of independent advisors, and should always check your decisions against your normal business methods and best practice in your field of business. The websites operators, their agents and employees, are not liable for any losses or damages arising from your use of our websites, other than in respect of death or personal injury caused by their negligence or in respect of fraud.

Click on one of the two buttons to access the content you wish to view. COVID Remote personalized support Our physical offices are closed, but our advisers remain at your disposal to help you plan the resumption of your activities. Guide The challenges of growing a business - and how to meet them Share on:. Keeping up with the market Planning ahead Cash flow and financial management Problem solving The right systems Skills and attitudes Welcoming change.

Changing to suppliers who can grow with you and meet your new priorities. As your business grows, consistent quality and reliability may be more important than simply getting the cheapest offer. Renegotiating contracts to take account of increased volume. Training and developing employees. Your own role will also evolve as the business grows.

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To combat the noisy e-commerce space, Tan said e-commerce SMBs need to understand who they are targeting, so they can create a select group of customers who will be their constant source of revenue and their loyal shoppers. How are you supposed to get quality traffic to your site and turn visitors into customers if people can't find your site to begin with? It's a big issue for e-commerce businesses, and one that could make or break a business.

E-commerce companies should conduct keyword research, implement on- page SEO best practices and work on building high-authority links to their website. Anderson continued to say that if all of the above is done correctly, it will lead to higher search visibility and an increase in qualified leads. That sounds extreme, but it's true. In an ideal world, yes, there would never be an issue with the product you're selling, but that's not always the case. Sometimes the purchaser has buyer's remorse, or it wasn't what they thought it would be.

Make it easy to understand and not too strict so the customer won't have to go through hassles [to return an item]," Hassan said. The easiest way to find that fit quickly is to build a product that solves a problem you have. Finding the right market for your product isn't the easiest task, though.

Rubright offered insight into how to make it easier. When you finally do make a sale, try and understand everything you can about who bought your product and find more of those people by any means necessary," Rubright said.

Once you have your products figured out, your website set up and your marketing set, the next step is making sales! It seems like a no-brainer; however, it's not always that straight forward. Aside from customers already having you in mind when they need something and feeling positive about your product, your website plays a big part in how many sales you'll make.

Tan suggested asking yourself the following questions to determine the efficiency of your website:. Jennifer Post. Cybersecurity, competition and order fulfillment are the top three challenges facing e-commerce businesses. E-commerce has exploded, meaning there's more fierce competition now than ever before. Business News Daily Contributing Writer.

Jennifer Post is a professional writer with published works focusing on small business topics including marketing, financing, and how-to guides. She has also published articles on business formation, business software, public relations and human resources. Her work has also appeared in Fundera and The Motley Fool. Start Your Business. Updated How to build a winning SEO strategy for your small business.

These 22 online business ideas can be launched quickly and easily Small businesses have a lot to manage, including marketing. How to Open a Retail Store. Narrow down your target market before opening a retail location. What Are Loss Leaders? More information on agricultural budgets can be found in Budgeting for Agricultural Decision Making.

These documents will display the financial information in a form that lending institutions are used to seeing. If these are not prepared by an accountant, having one review them will ensure that the proper format has been used. Financial projections should be completed for at least two years and, ideally, for five years. In agricultural businesses, five-year projections are sometimes difficult to make because of variability in prices, weather, and other aspects affecting production.

One way to illustrate these risks is to develop several scenarios covering a range of production assumptions. This attention to detail will often result in a positive experience with lenders because they realize that the plan covers several possible circumstances and provides insight into how the business plans to manage risk.

More information on financing agricultural businesses can be found in the publication Financing Small-scale and Part-time Farms. A balance sheet is a snapshot of a business's assets and liabilities and its owner's equity at a specific point in time. A balance sheet can be prepared at any time but is usually done at the end of the fiscal year for many businesses, this is the end of the calendar year. Evaluating the business by using the balance sheet requires several years of balance sheets to tell the true story of the business's progress over time.

A balance sheet is typically constructed by listing assets on the left and liabilities and owner's equity on the right. The difference between the assets and liabilities of the business is called the "owner's equity" and provides an estimate of how much of the business is owned outright.

Owner's equity provides the "balance" in a balance sheet. Assets are anything owned by or owed to the business. These include cash and checking account balances , accounts receivable money owed to the business , inventory any crops or supplies that the business has stored on farm , land, equipment, and buildings.

This may also include machinery, breeding stock, small fruit bushes or canes, and fruit trees. Sometimes assets are listed as current those easily converted to cash and fixed those that are required for the business to continue. Assets are basically anything of value to the business. Balance sheets may use a market basis or a cost basis to calculate the value of assets. A market-basis balance sheet better reflects the current economic conditions because it relies on current or market value for the assets rather than what those assets originally cost.

Market values are more difficult to obtain because of the difficulty in finding accurate current prices of assets and often results in the inflation of the value of assets. Cost-basis balance sheets are more conservative because the values are often from prior years.

For example, a cost-basis balance sheet would use the original purchase price of land rather than what selling that land would bring today. Because purchase records are easily obtained, constructing a cost-basis balance sheet is easier. Depreciable assets, such as buildings, tractors, and equipment, are listed on the cost-basis balance sheet at purchase price less accumulated depreciation.

Most accountants use the cost-basis balance sheet method. Whether you choose to use market basis or cost basis, it is critical that you remain consistent over the years to allow for accurate comparison. Liabilities are what the business owes on the date the balance sheet is prepared. Liabilities include both current liabilities accounts payable, any account the business has with a supplier, short-term notes, operating loans, and the current portion of long-term debt, which are payable within the current year and non-current liabilities mortgages and loans with a term that extends over one year.

Owner's equity is what remains after all liabilities have been subtracted from all assets. It represents money that the owner has invested in the business, profits that are retained in the business, and changes caused by fluctuating market values on a market-basis balance sheet. Owner's equity will be affected whenever changes in capital contributed to the business or there are retained earnings; so, if your practice is to use all earnings as your "paycheck" rather than reinvesting them in the business, your owner's equity will be impacted.

On the balance sheet, owner's equity plus liabilities equals assets. Or, stated another way, all of the assets less the amount owed liabilities equals the owner's equity sometimes referred to as "net worth". The income statement is a summary of the income revenue and expenses for a given accounting cycle.

If the balance sheet is a "snapshot" of the financial health of the business, the income statement is a "motion picture" of the financial health of the business over a specific time period. An income statement is constructed by listing the income or revenue at the top of the page and the expenses and the resulting profit or loss at the bottom of the page. Revenue is any income realized by the sale of crops or livestock, government payments, and any other income the business may have including such items as fuel tax refunds, patronage dividends, and custom work.

Other items affecting revenues are changes in inventory and accounts receivable between the start of the time period and the end, even if these changes are negative. Expenses include any expense the business has incurred from the production of the products sold. Examples of expenses include feed, fertilizer, pesticides, fuel, labor, maintenance and repairs, insurance, taxes, and any changes in accounts payable.

Depreciation, which is calculated wear and tear on assets excluding land , is included as an expense for accounting purposes. Interest is considered an expense, but any principal payments related to loans are not an expense. As the income statement is created, the desired outcome is to have more income than expenses, so the income statement shows a profit.

If not, the final number is shown in parentheses signifying a negative number. Another name for this financial record is a "profit and loss statement. A cash flow statement is the predicted flow of cash into and out of a business over a year. Cash flow statements are prepared by showing the total amounts predicted for each item of income or expense.

This total is then broken down by month to show when surpluses and shortfalls in cash will occur. In this way, the cash flow statement can be used to predict when additional cash is needed and when the business will have a surplus to pay back any debt.

This monthly prediction allows the owner s to better evaluate the cash needs of the business, taking out applicable loans and repaying outstanding debts. The cash flow statement often uses the same categories as the income statement plus additional categories to cover debt payments and borrowing. After these financial statements are completed, the business plan writer will have an accurate picture of how the business has performed and can project how the business will perform in the coming year s.

With such information, the owner--and any readers of the business plan--will be able to evaluate the viability of the business and have an accurate understanding of actions and activities that will contribute to its sustainability.

This understanding will enable the owner s to make better informed decisions regarding loans or investments in the business. After the mission, background information, organization, and marketing and financial plans are complete, an executive summary can then be prepared. Armed with the research results and information from the other sections, the business will come alive through this section.

The next step is to share this plan with others whose opinions you respect. Have them ask you the hard questions, making you defend an opinion you have expressed or challenging you to describe what you plan to do in more detail. Often people are hesitant to share what they have written with their families or friends because they fear the plan will not be taken seriously.

However, it is much better to receive constructive criticism from family and friends and gain the opportunity to strengthen your plan than it is to take it immediately to the lender, only to have any problems pointed out and receive a rejection.

Once all parts of the business plan have been written, you will have a document that will enable you to analyze your business and determine which, if any, changes need to be made. Changes on paper take time and effort but are not as expensive as changing a business practice only to find that the chosen method is not viable.

For a proposed venture, if the written plan points to the business not being viable, large sums of money have not been invested and possibly lost. In short, challenges are better faced on paper than with investment capital. Remember, a business plan is a "road map" that will guide the future of the business. The best business plan is a document in continual change, reacting to the influence of the outside world on the business.

Once the plan is in place, the business will have a better chance of future success. Abrams, R. Palo Alto, Calif. Becker, J. Kime, J. Harper, and R. Understanding Agricultural Liability. University Park: Penn State Extension, Dethomas, A. Hauppauge, N. Dunn, J. Harper, and L. Harper, J. Cornelisse, L. Kime, and J. Budgeting for Agricultural Decision Making. Kime, L. Adamik, E. Gantz, and J. Agricultural Business Insurance.

Roth, and J. Starting or Diversifying an Agricultural Business. Lesonsky, R. Irvine, Calif. Peterson, S. Jaret, and B. Business Plan Kit for Dummies. Indianapolis, Ind. Shelton, H. Rockville, Md. Stokes, J. Hanson, J. Financing Small-scale and Part-time Farms. Prepared by Lynn F. Kime, senior extension associate; Winifred W. McGee, extension educator; Steven M. Bogash, former extension educator; and Jayson K. Harper, professor of agricultural economics.

Additional financial support for this publication was provided by the Risk Management Agency of the United States Department of Agriculture and the Pennsylvania Department of Agriculture. Department of Agriculture-Extension Service. By entering your email, you consent to receive communications from Penn State Extension. View our privacy policy. Thank you for your submission!

Home Developing a Business Plan. Developing a Business Plan. An important task in starting a new venture is to develop a business plan, which is a "road map" to guide the future of a business or venture. In This Article. Developing a Business Plan An important task in starting a new venture is to develop a business plan.

Using the Proper Format The presentation of the plan should be as professional as possible to portray your business in a positive manner. Sections of the Business Plan A business plan should be structured like a book with the title or cover page first, followed by a table of contents. Executive Summary The executive summary is placed at the front of the business plan, but it should be the last part written.

Mission, Goals, and Objectives This section has three separate portions. Background Information Background information should come from the research conducted during the writing process. Organizational Matters This section of the plan describes the current or planned business structure, the management team, and risk management strategies.

Marketing Plan Every purchase decision that a consumer makes is influenced by the marketing strategy or plan of the company selling the product or service. Financial Plan The financial plan and assumptions are crucial to the success of the business and should be included in the business plan. Financial Statements Balance Sheet A balance sheet is a snapshot of a business's assets and liabilities and its owner's equity at a specific point in time.

Income Statement The income statement is a summary of the income revenue and expenses for a given accounting cycle. Cash Flow Statement A cash flow statement is the predicted flow of cash into and out of a business over a year.

Putting It All Together After the mission, background information, organization, and marketing and financial plans are complete, an executive summary can then be prepared. Summary Once all parts of the business plan have been written, you will have a document that will enable you to analyze your business and determine which, if any, changes need to be made.