A Rough Outline for A Small Business Plan

I. Entrepreneur’s Background and Goals

A. Education related to the industry in which you want to compete

B. Work experience related to the industry in which you want to compete

C. The emotional/psychological motive: “Why do I want to launch a business in this particular industry at this particular time?”

D. Calculation of the “minimum amount of profit” that you consider acceptable: “How much do you need to make in order to feel well
compensated for working 100 hours a week in your own business?”

E. Complete the Entrepreneur’s Checklist (link not currently available) and determine whether you have “what it takes” to operate your own business

II. The Market

A. The local demographics and what they suggest about the demand for your product or services

B. The industry in which you want to compete:

(1) are revenues growing or shrinking?

(2) are profits growing or shrinking?

(3) is there much competition from foreign imports?

(4) is there much government regulation?

(5) are the number of competitors in this industry growing or shrinking?

(6) is there a trend toward industry consolidation? (i.e. are “big fish eating the little fish?”)

C. Local competition

(1) list five or six local businesses which appear to be potential competitors and, for each one determine (if possible):

(a) business age
(b) reputation in the marketplace
(c) sales volume
(d) marketing style
(e) hours of operation
(e) niches of the market that it serves
(f) pricing policy
(g) suppliers

(2) identify your strengths and weaknesses vis-à-vis each competitor.

(3) determine the ways in which you will compensate for your competitive weaknesses
(4) identify your unique competitive advantages and how you can best communicate these competitive advantages in a marketing campaign?

D. How changes in economic conditions (e.g. inflation, unemployment,interest rates) are likely to impact the demand for your product or services

III. Your Specific Location

A. Convenience to prospective customers: “Do major thorough fares connect your place to residential neighborhoods and to business complexes?”

B. Parking

C. Number of customers who can be accommodated at one time

D. Potential for accommodating future customer growth

E. At 100% capacity, how many customers will you have and how much revenue/profit can be generated?

IV. Start-Up Capital Budget

How much money do you need to open your business’s doors that first day?

a) business license and registration fees
b) franchise fees
c) legal and consultant fees
d) market research expense
e) rent deposits (if you are leasing space for your business)
f) leasehold improvements
g) office furniture and fixtures
h) office equipment
i) manufacturing or processing equipment
j) utility/delivery vehicles
k) continuing education (tuition and book expenses you incur to learn more about business, accounting and finance)
l) website development
m) marketing and promotional expense
n) working capital reserve equal to 6-10 months of operating expenses

V. Marketing Plan (and the Itemization of Projected Costs)

VI. The Assumptions Underlying Your Projections

VII. The Month-by-Month Projections: Cash Basis (for at least 36 Months)

VIII. The Month-by-Month Projections: Accrual Profit Basis (for at Least 36 Months)

Are there terms or concepts in this outline that are unfamiliar to you? If “yes,” then you probably need to upgrade your knowledge of accounting, finance and taxation. Give us a call. We want to help.

We stress again: this is a rough outline for a small business plan. We periodically change the material presented in this rough outline by “fleshing out” a different section of the outline. So check back in a week to see more detail in another section of the plan. If you want to develop a comprehensive business plan, please give us a call to set up an appointment. Call Ken or Kira at 650- 991-5103.