Writing an Effective Business Plan

Why do I need a Business Plan?
A business plan is often the entry-level requirement to getting government money, investor capital or bank loans. Although you may have a complete picture of the business in your head, investors and bankers need to see if you have an understanding of the business and have thought it through. The plan provides you with the direction of your company and is a guidepost for your employees, too.

What is in a Business Plan?

  1. Cover Sheet
    Name of business, address, telephone number and the name(s) of principal(s). Include any pertinent contact information (cell phone, fax, etc.).

  2. Executive Summary -- Statement of Purpose
    A summary of the business covering at least the following items: the name of the business, the legal structure, the amount and purpose of a loan request, a repayment statement, the business concept; product information; current stage of business (start-up, developing or existing); and anticipated financial results and other benefits

  3. Table of Contents

  4. The Business
    • Description of business: What product or service will you provide?
    • Historical development: List the name, date of formation, legal structure, subsidiaries and degrees of ownership within your business.
    • Product/service lines: What is the relative importance of each product/service? Include sales projections based on research conducted to identify the market.
    • Market segment: Who will buy your product? How many of them are there and why will they want what you are offering?
    • Competition: Describe competing companies and how your business compares. Remember to include all substitute product/service providers.
    • Location: Describe the location and its appeal to your target market.
    • Operation: Hours of operation.
    • Marketing: Multi-media, specialized publications, billboards, networking.

  5. Management
    • Business format: Describe your legal structure and explain why you chose this form compared to others.
    • Organizational chart: Who are the key individuals and planned staff additions? How many and of which type will you need at the different stages of the business cycle?
    • Experience: Describe the past experiences of partners and employees, and how will they contribute to the success of the company.

  6. Finance
    • Description of the project.
    • Total estimated project cost. DO NOT expect the lender to tell you how much money you can borrow. Explain how much money you need and WHY.
    • Breakdown of the proposed uses of project funds. Consider presenting the total project in stages or phases of development to better identify cash requirements.
    • Lending institution participation, including terms and conditions.
    • Equity participation of the owners and investors.
    • Projections and assumptions for:
      • two years of both Profit and Loss Statements and Balance Sheets
      • one year of company Cash Flow, month-by-month
    • Personal financial statement of owner

  7. Production
    • Description: Describe how production or delivery of services will be accomplished.
    • Capacities: Describe the physical facilities, suppliers, patents, labor and technologies that exist or will be used.
    • Capital equipment: Type and amount of machinery and durable equipment needed to operate the business.
    • Supplies: Describe where and how you will obtain your components and day-to-day supplies and services.

  8. Supporting Documents
    Include personal resumes, personal financial statements, cost of living budget, letters of reference, letters of intent, job descriptions, copies of leases, contracts and other legal documents that help convey an accurate picture of the business. Also include descriptive drawings to identify proposed site plan of facility and floor plan of operations.

Who can help me write a plan?
Preparing a plan is a long and daunting task, but there are resources for you and your business. Read on for a list of available free and low-cost resources.

A. If You Are a Novice&
If you have a business startup idea and need help writing a business plan, here are some first steps.

  1. Renaissance Entrepreneurship Center - nonprofit organization that provides small business training and support services
    Contact: 275 Fifth Street, 2nd floor, 415-541-8580, www.rencenter.org
    Class: Business Planning is a fourteen-week class that meets twice a week and focuses on helping students create a practical, effective business plan for their businesses. The class addresses every aspect of starting and developing a small business including marketing, management, finance, and tax and record keeping. If not already in business, candidates for this class should plan on launching their business 3-6 months after completing the class.
    Cost: $750, and scholarships are available based on income and personal need with the appropriate documentation (e.g., pay stubs, tax returns).
    Registration: www.acteva.com/go/rec

  2. San Francisco City College
    Contact: www.ccsf.edu
    Class: SMBS 135. Ownership and Operations of a Small Business (3). An introduction to organizing and managing a successful small business enterprise. Emphasis on formulating a business plan, preparing financial statements, conducting marketing research, finding sources of financing, developing marketing and business strategies, and responding to legal and ethical issues.
    Cost: 3 credit class
    California Residents:
    Enrollment fee per semester unit: $20.00
    Residency is established by physical presence in California for One year and one day prior to the first day of instruction.
    Non-California Residents:
    Tuition fee per semester unit: $ 179.00 + $ 20.00 enrollment fee per unit.
    Registration: Registration Help Phone Line
    Phone: (415) 452-5630
    Available Mon-Thu 8:00 - 5:00pm, Fri 8:00-4:00pm
    or email register@ccsf.edu

  3. Women's Initiative for Self Employment (WISE) - nonprofit organization serving high-potential, low-income women who want to start or expand their own business
    Contact: 1398 Valencia Street, 415-641-3460, www.WomensInitiative.org
    Class: Three-Stage Business program that includes a FREE "My Business Action Plan" session
    Cost: 1st stage: Free, 2nd stage: $25 fee for workbook, and $75 class fee for 20-sessions. Free for eligible high-potential, low-income women who want to become financially independent and start or expand their own businesses.
    Registration: www.WomensInitiative.org or 415-641-3460

  4. SBA Entrepreneur Center
    Contact: 415-744-6771, 455 Market Street, 6th floor in downtown San Francisco, Montgomery Muni/BART is the closest stop
    Classes: a wide variety of Business Start-up and Management Classes
    Costs are Free except otherwise stated on registration page.
    Registration: www.acteva.com/go/sba

  5. San Francisco Main Public Library
    Contact: Fourth Floor Business Center, 100 Larkin St. (at Grove),
    Class: Business counseling Sessions every Wednesday, Event Time: 10 a.m. - 3 p.m. SCORE (Service Corps of Retired Executives) offers free, one-hour business counseling sessions from 10 a.m. to 3 p.m.
    Cost: FREE
    Registration: To schedule an appointment with a SCORE counselor, call (415) 744-6827.
    For more resources and information, visit the Business Center at http://sfpl.lib.ca.us/librarylocations/main/bst/bst.htm

B. If You Have A Draft Business Plan&
If you have a draft business plan in hand, are already in business, or thinking of buying a business, contact SBDC and/or SCORE for a consultation.

  1. Small Business Development Center (SBDC) - source for Free Professional Consultants
    Contact: 300 Montgomery Street, Suite 789, 415-841-4050, www.sfsbdc.org

    Available Class: Step-By-Step Business Planning. Marketing and finance are emphasized because both are necessary for good business management. The planning steps are mixed with exercises, videos, techniques, and marketing & finance discussions.
    Cost: $50, followed up with a FREE one-on-one counseling from their professional small business consultants
    Registration: www.acteva.com/go/sba

  2. SCORE - Your source for General Business Assistance
    Contact: 455 Market Street, Suite 600, 415-744-6827, www.sfscore.org
    How to Write an Effective Business Plan (doc)

    Available Class: Writing Effective Business Plans, Tuesdays from 9am-4pm (call and check online for exact times and dates). This is a hands-on workshop where they will demystify the process using case studies and exercises. You will also develop a template for your business that covers products, organization, marketing, customers, finances, and market research.
    Costs: $50 in advance, or $60 at the door
    Registrations online at www.acteva.com/go/sfscore



Small Business Assistance Center, City Hall, Room 110, 1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102
Phone: 415-554-6134 Office Hours: M-F 8 AM - 5 PM