Lenders, others want to know the plan Where to Get Help for Business Plan

Posted: March 23, 2003

So you want to start a business?

Among other things - like an idea, money and a whole lot of moxie - you should have a business plan.

The plan is a formal document that fleshes out the details of a business idea. Lenders often require one before making a loan. And prospective employees might be enticed into a new venture by what they read in the plan.

"You can start a business without a business plan, and a lot of people do so successfully, but the business plan is a great tool to be sure you dot all the i's and cross all the t's," said Elizabeth McCrea, who teaches courses on new ventures in the graduate school at Pennsylvania State University's Great Valley campus.

Plans can run from a few pages to a few hundred. A Small Business Administration guide to writing business plans - available on the Web at www.sba.gov/starting/indexbusplans.html - sets out in detail what information has to be included. These key elements are included, according to the SBA:

Description of the business. Ask yourself, "What business am I in?" Describe the product and market, and what makes your business unique enough to succeed.

Marketing plan. Your business won't promote itself. Identify the customers and how you will reach them. How will the business be advertised? How much will your product or service cost?

Financial plan. Figure out how much money it will take to start the business. Do you need a loan or other investment? How will the money be spent? And how long before you turn a profit?

Management plan. Say who will run the business and what his or her duties will be. If it's you, what qualifies you to be the boss? What can't you do, and who will you get to do it? What other personnel will you need, and how much will you pay them?

Why so much fuss? Experts say the need for a business plan is rooted in the school of hard knocks. Business people have learned over the years that without a written plan, they easily lose direction.

"It's like planning your swim across the English Channel," James Klingler, who teaches entrepreneurship at Villanova University, said. "You know where you want to go, but once you get in the water and the waves get to breaking, you're just swimming" to stay alive. Also, Klingler said, "if you want somebody else's money, you're going to have to prove to them that you have a snowball's chance of success."

And write the plan yourself, counsels Klingler. "You can hire somebody to write a business plan, but a business plan not written by the entrepreneur is not worth much," he said.

"Starting a business is so personal," due primarily to the way different people handle financial and personal risks, he said. "The way I would start my pizza parlor is not the way somebody else would start their pizza parlor."

Contact staff writer Reid Kanaley at 215-854-5026 or rkanaley@phillynews.com.

At the Web site, www.sba.gov/starting/indexbusplans.html, the Small Business Administration provides a 32-page guide to writing a business plan. Included are checklists for collecting and organizing the financial, logistical, legal and other information needed for the plan.

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