This is the last part in a 4 part series on how to write a business plan. Note that the appendices can be a place for you to really show things about your business that do not shine well elsewhere.
Operational Plan
This section
gets down to the nuts and bolts of the daily operation of your company. It
includes everything from personnel to policy and legalities to light fixtures.
In the
operational plan, you will want to describe the legal aspects of your business.
This includes licensing, permits, regulations, zoning, insurance, trademarks,
and more.
You will also need to describe the personnel involved in your business.
Also include information concerning the use of contract workers such as
contractors, painters, or landscapers.
Inventory is
another part of your operational plan. You will need to list the types of
inventory you will have on hand and how much you will have invested in the
inventory at any given time.
Do you have
any suppliers? You will also want to list:
- Inventory
- Credit policies
- Responsible nature of the company
Another
factor to consider is your credit policy.
When a bank lends you money, they want to know who will actually run the
business because this can make a difference in its success or failure. This
section explains who runs/manages the business day-to-day and what experience
this person has doing so. You can also list any core competencies or skills
this person has that are specific to the job at hand.
Finally, you will want to list any members of your support team.
Bankers will
need to know what you have personally since you will be using your assets as
collateral on your loan. You will need to know your net worth even if you are
not getting a loan since you will be using your assets to keep the company
afloat in the beginning stages of start up.
Startup Expenses
No matter what business you start, you
will incur expenses even before you ever open your doors. Be sure to explain
how you came up with the item list and expenses associated with these items.
Just
as you had to have a marketing plan, you will need to have a financial plan.
The plan will show what you expect to profit/lose the first year and over four
years, a projection of cash flow, a projected balance sheet, and, finally, what
it will take to break even.
These
projections will help you to predict your company’s future.
12-Month Profit and Loss Projection
A
12-month profit and loss projection puts all the numbers together to give you
an idea of what it will take to make a profit. This is done on a month-by-month
basis as you forecast the following:
- Sales
- Cost of products sold
- Expenses
- Profits
In
addition to a spreadsheet with these items, it is a good idea to use a
narrative to explain how you came to these particular estimations.
Projected Cash Flow
A
business is unsuccessful when it runs out of money. A projected cash flow can
help you to foresee such an event.
Your
projected cash flow will include:
- Start up money
- Operating expenses
- Reserves
Opening Day Balance Sheet
This
is just a spreadsheet that shows your companies assets versus its debts. When
you subtract your debts from your assets, you get your equity.
Break-Even Analysis
This
is just a prediction of what you will have to do in sales to cover your costs.
It gives numbers to what it will take to operate at a profit.
You can
complete your business plan by using appendices. These can include such things
as:
§ Your promotional materials
§ Industry studies
§ 
Articles
Articles
§ Letters showing support of your
company by past or future clients
§ Formal research studies
If you have read all 4 parts in this series, you have a great outline for your own business plan. Feel free to contact me for any suggestions or ideas regarding your plan!
