Business Plan Checklist

Many people mistakenly assume that to write a
successful start-up business plan they should
dazzle their readers with complicated technical
jargon, complex corporate structures and fierce
non-disclosure pledges. Yet the truth is that
this type of approach can actually alienate po-
tential investors, who may be neither technical-
ly oriented or knowledgeable about your particu-
lar industry. The purpose of a well-prepared
business plan is not to show how sophisticated
you are as a writer, but how practical and at-
tainable your goals are.

Whether you’re trying to raise $20,000 or
$2,000,000, you should be sure to address cer-
tain crucial areas that convince investors your
business is a good risk. Following is a general
approach that you can use as a foundation. How-
ever, you should tailor your plan to meet the
specific circumstances of your business, empha-
sizing its strengths and addressing the poten-
tial problems and challenges to be faced.


The summary should concisely describe the key
elements of the business plan. For the firm
seeking financing, the summary should convince
the lender or venture capitalist that it is
worthwhile to review the plan in detail. The
summary should briefly cover at least the

* Name of the business;
* Business location and floor plan description;
* Discussion of the product, market and compe-
* Expertise of the management team;
* Summary of financial projections;
* Amount of financial assistance requested (if
* Form of and purpose for the financial assist-
ance (if applicable);
* Purpose for undertaking the project (if finan-
cial assistance is sought);
* Business goals.

The Company

This section provides background information on
the company and usually includes:

* A general description of the business, includ-
ing the product or service;
* Historical development of the business, in-

– Name, date and place (state) of formation;
– Legal structure (proprietorship, partnership,
– Significant changes (including dates) in own-
ership, structure, new products or lines, and
– Subsidiaries and degree of ownership, includ-
ing minority interests;
– Principals and the roles they played in the
formation of the company.

The Product or Service

Describe the present or planned product or ser-
vice lines, including:
* Relative importance of each product or service
including sales projections, if possible;
* Product evaluation (use, quality, performance);
* Comparison to competitors’ products or services
and competitive advantages over other producers;
* Demand for product or service and factors af-
fecting demand other than price.

The Project

If financing is sought for a specific project,
describe the project, the purpose for which it is
undertaken, its cost and the amount, and the form
and use of the financial assistance.


* Organizational chart;
* Key individuals (include supervisory personnel
with special value to the organization):
– Responsibilities;
– Personal resumes (describing skills and experi-
ence as they relate to activities of the business);
– Present salaries (include other compensation
such as stock options, bonuses);
-Planned staff additions.
* Other employees:
– Number of employees at year end, total payroll
expenses for each of previous five years (if ap-
plicable) broken down by wages and benefits;
– Method of compensation;
– Departmental or divisional breakdown of work
* Planned staff additions.


* Names, addresses, business affiliations of prin-
cipal holders of subject’s common stock and other
types of equity securities (include details on
* Degree to which principal holders are involved
in management;
* Principal non-management holders;
* Names of board of directors, areas of expertise
and role of board when business is operational;
* Amount of stock currently authorized and issued.

Marketing Strategy/Market Analysis

* Description of the industry. Include:
– Industry outlook;
– Principal markets (commercial/industrial, con-
sumer, government, international);
-Industry size – current as well as anticipated
in the next 10 years (explain sources of pro-
– Major characteristics of the industry. Effects
of major social, economic, technological or regu-
latory trends on the industry.
* Description of major customers. Include:
– Names, locations, products or services sold to
– Percentage of annual sales volume for each cus-
tomer over previous five years (if applicable);
– Duration and condition of contracts in place.
* Description of market and its major segments.
– Principal market participants and their per-
– Target market;
– Customer requirements and ways of filling those
– Buying habits of customers and impact on custo-
mers using your product or service.
* Description of competition: companies with which
your business competes and how your business com-
pares with these companies. This section is a
more detailed narrative than that contained in
the description of the product or service above.
* Description of prospective customers. Include
reaction to your firm and any of its products or
services they have seen or tested.
* Description of firm’s marketing activities. In-
– Overall marketing strategy;
– Pricing policy;
– Method of selling, distributing and servicing
the product;
– Geographic penetration, field product support,
advertising, public relations and promotions, and
priorities among these activities.
* Description of selling activities. Include the
method for identifying prospective customers and
how and in what order you will contact the rele-
vant decision-makers. Also describe your sales
effort–sales channels and terms, number of sales-
persons, number of sales contacts, anticipated
time, initial order size–and estimated sales and
market share.


* Describe technical status of your product–idea
stage, development stage, prototype–and the rele-
vant activities, milestones and other steps neces-
sary to bring the product into production.
* Present patent or copyright position (if appli-
cable). Include how much is patented and how much
can be patented (how comprehensive and effective
the patents or copyrights will be). Include a
list of patents, copyrights, licenses or state-
ments of proprietary interest in the product or
product line.
* Describe new technologies that may become prac-
tical in the next five years that may affect the
* Describe new products (derived from first gene-
ration products) the firm plans to develop to
meet changing needs.
* Describe regulatory or approval requirements and
status, and discuss any other technical and legal
considerations that may be relevant to the tech-
nological development of the product.
* Describe research and development efforts and
future plans for research and development.

Production/Operating Plan

* Explain how the firm will perform production or
delivery of service. Describe in terms of:
– Physical facilities–owned or leased, size and
location, expansion capabilities, types and quan-
tities of equipment needed. Include a facilities
plan and description of planned capital improve-
ments (if any) and timetable for those improve-
-Suppliers: names and locations, length of lead
time required, usual terms of purchase, contracts
(amounts, duration and condition) and subcontrac-
– Labor supply (current and planned): number of
employees, unionization, stability (seasonal or
cyclical), and fringe benefits.
– Technologies/skills required to develop and manu-
facture the products.
– Cost breakdown for materials, labor and manufac-
turing overhead for each product, plus cost versus
volume curves for each product or service.
– Manufacturing process.
* Describe production or operating advantages of
the firm; discuss whether they are expected to
* Specify standard product costs at different
volume levels.
* Present a schedule of work for the next one to
two years.


* Auditor: name, address;
* Legal counsel: name, address;
* Banker: name, location, contact officer;
* Controls: cost system used and budgets used;
* Describe cash requirements, now and over the
next five years, and how these funds will be used;
* Amount to be raised from debt and amount from
* Plans to “go public” — relate this to future
value and liquidity of investments;
* Financial statements and projections for next
five years:
– Profit and loss or income statements by month
until breakeven point, and then by quarter;
-Balance sheets as of the end of each year;
– Cash budgets and cash flow projections;
– Capital budgets for equipment and other capital
– Manufacturing/shipping plan.
If financing is sought, most lenders and venture
capitalists require:
* A funding request indicating the desired finan-
cing, capitalization, use of funds and future
* Financial statements for the past three years,
if applicable;
* Current financial statements;
* Monthly cash flow financial projection, includ-
ing the proposed financing, for two years;
* Projected balance sheets, income statement and
statement of changes in financial position for
two years including the proposed financing.

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SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

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