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Key Components of a Business Plan
Business Identification
Business name, address, phone number, fax number, Internet World Wide Web
site address
Business Tax Identification Number (IRS and state sales tax)
Organization Type (sole proprietorship, partnership, corporation)
Names, home addresses, home phone numbers, and Social Security Numbers of
all proprietors, partners & shareholders
Citizenship of proprietors, partners and shareholders (if not U.S. citizens,
provide alien registration numbers, E-1, E-2, or L-1, L-2 or TN visas)
Names, addresses and phone numbers of accountants, attorneys and insurance
agents
Names, addresses and phone numbers of any affiliated businesses, with a
description of the relationship
Business Description
Detailed description of products and services sold (this should be very
specific)
Description of manufacturing or value-added services performed
Description of facilities, including size, location, specialized equipment,
and any branches or sub-locations
Number of employees (indicate full-time and part-time separately
For established businesses, a history of the business, including when
started and changes in products or services produced
For franchises, a franchise agreement and Federal Trade Commission statement
For business purchases, a copy of the sales contract
Management Description
Resumes, including educational backgrounds, on each principal, partner,
executive, and key manager, explaining their specific skills to help this
business
Specific industry product knowledge and experience to assure adequate sales
to repay the loan
Description of community and industry relationships that will benefit the
business
Marketing
Define the product and how purchasers use it
Describe the market, including size, scope (local, regional, national or
international), and growth history
Describe social or economic trends that affect potential sales of the
product
Describe the competition. Who are they? How many? Where are they located?
How long have they been established? How big are they? It is not recommended
to claim there is no competition, even if the product or service is new or
if there are no local competitors. If this is the case, describe how
potential customers are getting along without the product or service.
Define the target market. What kind of customer buys the product or service?
How many are in the area? Are they are willing and able to buy the product
or service?
Describe how the product or service will be advertised, packaged and
distributed. Include any market research studies that have been conducted, including a summary of the results.
Loan Information
Purpose of the loan - describe in detail what it is needed for
Amount required (no 100% financing)
Description of how and when the loan will be repaid
List of assets to be used as collateral
Financial Information
Business plan must demonstrate the ability to repay the loan from the cash
flow of the business.
For established businesses, current (within 90 days) balance sheet and
income statement, tax returns for the past three years, financial reports
for the past three years
For business start-ups, balance sheet for the day the business starts,
income statement or profit & loss statement projection for 2 years, cash
flow analysis month by month for 2 years, personal tax returns of owners and
principals for the past three years, personal financial statements of owners
and principals
Personal credit history of owners and principals
Amount of equity provided by owners:
- New business: 1/3 to 1/2 of total project cost.
- Buying an existing business: 20-30 percent of selling price.
- Franchise: 25-30 percent of total project cost.
- 100 percent financing usually will not be considered.
Financial ratios for the business. Show how the business compares to
industry averages for the same type of business. Normal industry ratios can
be obtained from:
Other financial questions to be answered:
Does the business cash flow adequately? If not in the first month, when?
When will the business break even?
Are there cash reserves to cover inadequate cash flow and unforeseen
expenses?
Is there a contingency plan if business is slower than expected or takes
longer than expected to develop?
Executive Summary
Description of the business
Repayment plan
Amount of loan requested
Security for the loan
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