Business plan essential in raising startup capital

Entrepreneurs often ask, "Is it really worth my time to write a business plan?"

Yes! A well-thought-out, persuasive business plan is a valuable company tool for several reasons:

It serves as your principal sales tool in raising capital. It shows you are serious and allows others to determine whether they are interested in supporting your venture.

It provides an objective, unemotional and broad perspective that will help keep you and your business team on track. A good business plan is a living document that is clear, concise, logical and realistic.

It shows how much your business venture will cost to start, how much it will cost to operate, at what point it will begin to show a profit and how much profit it will make.

It serves as a management guide and lets you anticipate whether you will be in a healthy cash-flow position. Cash is the lifeblood of your business. Adequate planning and documentation for cash-flow maintenance is a primary key for business success and is critical in getting a loan request approved.

Cash receipts and expenditures are estimated, then compared with actual receipts and expenditures so that you can anticipate necessary adjustments. It is wise to work closely with an experienced small-business accountant to develop your financial projections.

Remember that financial projections are only as good as what your market research can support.

Research, research, research. The research phase should be your most time-consuming task. Gather primary data, and develop a fact book with the most current and relevant information concerning your venture.

Good business resources and market demographics are available at public libraries, chambers of commerce, professional organizations, trade associations and the World Wide Web.

University of Missouri Outreach and Extension Business Specialists, Missouri Small Business Development Centers, the U.S. Small Business Administration and the Missouri Department of Economic Development provide business training and are ready sources of accurate business information. Entrepreneur Inc. (800-421-2300) publishes business plan start-up manuals for hundreds of different businesses.

Writing the plan. Your plan does not have to be long, but it does need to tell your story with convincing appeal. Use appendices to keep your text concise and readable.

Show publication clips, pictures, graphs, drawings, principals' resumes, letters of intent from prospective customers, job descriptions, tax returns, contracts, licenses, leases, client testimonies, personal financial statements, credit reports, letters of reference and other such documents that lend credibility to your business.

Give enough information so that the only questions a reader would have are smart ones.

Sections of a business plan. You will need a cover sheet