Some Thoughts on Business Plans

A complete business, plan i.e., one that includes a marketing plan, a manufacturing plan, financial plan, and an in depth analysis of all aspects of the business) will tell you how much you will need to start you venture. However, a business plan is a process, not a project. It is never completed. And you will have to make several passes with the first stage plan before you have a doable undertaking.

It is also the first test of your sincerity. If you get no pleasure from working on the plan, it is probable that you will not be happy running a company.

If your problem is that you don't know how to do a business plan, not to worry, courses and books on business plan writing are a growth industry. Every bookstore and library has books on the subject. There are also computer applications which will guide you through the process. Colleges, the Small Business Administration and Business Development Centers all have courses and seminars in business plan.

Basically, a business plan tells who you are, what your business is and why people should believe you can do what you say you will do in the plan, i.e. your previous experience. A second section of the plan shows how your business will work, what it will cost and how much it will make.

There are two ways of getting the numbers for this section. If your new venture is the same as a previous company, you can use your experience. If you have not run a company in that business before, you can use standard ratios for the industry. Here are some sources which may be available from your public library or university library:

Barometer of Small Business, published by the Accounting Corporation of America

Expenses in Retail Business, published by the National Cash Register Company

Key Business Ratios, published by Dun & Bradstreet,

Quarterly Report for Manufacturing Corporations, published by the Federal Trade Commission-Securities and Exchange Commission, and

Statement Studies, published by Robert Morris Associates.

All give financial ratios for a number of different industries.

In addition to those sources, industry trade groups and trade publications generally have useful industry cost and income figures which will give your business plan considerably more authority when you use it to help raise money.

Stewart-Gordon Associates, Inc.
P.O. Box 781992
Dallas TX 75378-1992
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e-mail Tom Stewart-Gordon