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September 22nd, 2019

 

Guest Opinion:Business Planning 101

By Rhea Landholm, rheal@cfra.org, Center for Rural Affairs

The most effective development strategy for rural communities is small entrepreneurship – locally-owned and operated small businesses.

The first step in creating a small business is having a great idea. Next is writing a good business plan to help you make superior business decisions. Business plans are also crucial to obtain financing.

Think of a business plan as a resume for your business that should be written down and formalized. In general, it contains:

  • Executive summary: a concise overview of the entire plan.
  • Market analysis: a description and outlook of your industry, target market, and market test results, if available; lead times for your product or service; and evaluation of your competition.
  • Company description: the nature of your business, as well as the factors you believe will make your business a success.
  • Organization and management: the organizational structure and details about ownership, delineating roles and responsibilities.
  • Marketing and sales management: the marketing strategy (market penetration, business growth, distribution channels, and customer communication) and the business sales strategy (sales force and sales activities).
  • Service or product line: a description of products or services; copyright and patent information; and research and development activities you have done or will do.
  • Funding request: current and future funding needs, how you will use these funds, and any plans that will affect future funding needs.
  • Financials: historical financial data (income statements, balance sheets, and cash flow statements); prospective financial data (pro forma income statements, balance sheets, and cash flow statements); and capital expenditure budgets for any major investments.
  • Appendix: any additional information. This may include credit history, product pictures, letters of reference, legal documents, and a list of your attorney and accountant.

For more small business resources, visit cfra.org/small-business.

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