Why are business plans necessary?
Business plans focus the owners on key elements of the business. It requires them to analyze the business model, products, marketing, financial data, and other important aspects of operating their business. A business plan provides for opportunities to forecast and outline business goals. Business plans are great tools for self analysis and highly recommended for startups as well as preexisting businesses.
Business plans are also necessary when seeking capital from banks or investors. A business that wants to issue a private placement memorandum to acquire funding from investors will find the task much easier with a business plan already drafted. A private placement memorandum requires information typically found in a business plan and usually includes the business plan as an attachment.
Business plans are also necessary when seeking capital from banks or investors. A business that wants to issue a private placement memorandum to acquire funding from investors will find the task much easier with a business plan already drafted. A private placement memorandum requires information typically found in a business plan and usually includes the business plan as an attachment.
How do I start a business plan?
There are several companies and websites that provide template business plans for a large array of industries. Paying for a template or downloading a free template might be a good starting point. However, a business plan should be specific to the owner's business and location. A business plan for a hot dog cart in Austin, TX, will be different from a similar business plan in Sacramento, CA. For example, a good business plan will take into consideration the median income, population size, and local competition within a five mile radius of the store front.
There are companies that draft individualized business plans. The costs for these plans vary, but a specific business plan will likely result in a better outcome for the business.
There are companies that draft individualized business plans. The costs for these plans vary, but a specific business plan will likely result in a better outcome for the business.
What should be included in a Sacramento business plan?
Generally speaking, a business plan should include:
- an executive summary;
- a table of contents;
- identify the business's management team;
- identify and describe each of the business's products and services;
- discuss expenses and overhead costs;
- identify the target market;
- identify the competition and, if applicable, barriers to enter the market;
- discuss the marketing plan and pricing structure; and,
- discuss the current and projected financials.
A business owner can ignore some of the aspects listed above when drafting a business plan for their own benefit and not to raise capital. However, its imperative that every business draft projected profit loss statements and cash flow statements. A business owner should be able to answer questions about break-even points and any assumptions made towards the financial projections.
Competition is another key aspect of the business plan that is imperative. A business owner should thoroughly define the target market and identify competitors. How will the business differ from the competition? Is the competition growing? What are the competitions' sales prices and revenues? Without knowing the competition, a business will surely fail. For example, it would be detrimental to charge $5 for a coffee when there are three other coffee shops within 2 miles selling equal quality coffee for $3.
SCORE provides a free business plan template. This is a general template that can be used as a starting point.
Competition is another key aspect of the business plan that is imperative. A business owner should thoroughly define the target market and identify competitors. How will the business differ from the competition? Is the competition growing? What are the competitions' sales prices and revenues? Without knowing the competition, a business will surely fail. For example, it would be detrimental to charge $5 for a coffee when there are three other coffee shops within 2 miles selling equal quality coffee for $3.
SCORE provides a free business plan template. This is a general template that can be used as a starting point.
Contact Sacramento's Business Attorneys
Drafting a business plan is a necessary aspect of starting and operating a business. Our Sacramento business lawyers have personally reviewed countless business plans and work in numerous industries. The wide range of experiences offers our business attorneys an insightful understanding to help throughout the process. Our Sacramento business attorneys draft and review business plans. Our lawyers also draft private placement memorandums and can help raising capital for businesses. Our Sacramento attorneys also draft confidentiality agreements for business plans.
If you're interested in discussing Sacramento Business Plans, please contact Sacramento's business attorneys to set up an initial meeting.
If you're interested in discussing Sacramento Business Plans, please contact Sacramento's business attorneys to set up an initial meeting.
Call Us: (916) 669-8400
*The information provided in this post does not constitute legal advice or opinion. The information is for guidance purposes only. Individual situations vary and you should contact us for a consultation. Sacramento's Business Lawyers on Sacramento Business Plans.