A business plan is a long-range map to guide your business to success. It details the what, why, where, how, and when. It's also the foundation of any financial proposal.
Plan vs. Proposal — Know the Difference
Business Plan
A long-range "map" to guide your business to your goal. Details what, why, where, how, and when — the success planning of your company.
Financial Proposal
A request for money based upon your business plan — your business history and objectives. Closely related but not interchangeable.
The 12-Section Structure
The best business plans run 25-30 pages. Here's the format:
Title Page
Business name, address, principal owner. Centered, page number.
Statement of Purpose
Simple statement of primary business function. Never more than 2 sentences. Follow with a brief explanation.
Table of Contents
List of chapter titles — check off as you complete each section.
Business Description
Product, production process, responsibilities, what makes it unique. Business beginnings, present position, future potential.
Market Analysis
Define your buyers, why they'll buy, how you'll reach them. Publicity, advertising, direct sales, dealer/distributor programs.
Competition
Identify competitors, their strengths/weaknesses. How you'll capitalize on weaknesses and match strengths. Survey indirect competitors.
Business Location
Physical location, facilities, lease/ownership details.
Management
People running the business — job titles, duties, résumés. Paint a strong picture of your team. People invest in people.
Current Financial Records
Profit & loss for past 6 months, business income tax records for previous 3 years.
Plans for Growth
Goals for years 1, 2, and 3. Detailed guide of what you'll do and how you'll increase profits.
Financing for Growth
Projected costs and income figures. List money sources: friends, stockholders, relatives, SBA, venture capital, advertising.
Summary & References
Brief overall summary. Business and personal references — people who've known you 5+ years.
Documentation Section
Include supporting documents:
Packaging Your Loan Proposal
Key elements your loan proposal should contain:
General Information
Business name, EIN, DUNS number, principals' names/SSN/ownership %, business address, purpose of loan, exact amount needed.
Business Description
History, nature of business, age, employees, current assets, ownership structure.
Management Profile
Short statement on each principal — background, education, experience, skills, accomplishments.
Market Information
Define products and markets. Identify competitors. Profile customers. Explain how you'll satisfy needs.
Financial Information
3 years of financial statements (or projected if new). Personal financial statements. Collateral you'll pledge.
Final Steps
A complete, detailed business plan is your basis for any financing proposal and a precise roadmap for success.
What's the core value proposition of your business? How will you articulate it to lenders?