How to Create an Effective

Business Plan
By: Josephine S. Galanza

Practical Research 2, January 2018

How to Create an Effective Business
Plan?

One of the most difficult and time-consuming

processes facing the small business owner is the
creation of an effective and comprehensive
business plan.

Business plans differ in size and scope

depending on the type of businesses involved as
well as the operating history of the small
business.
How to Create an Effective Business
Plan?

1. The first step of the comprehensive business plan is to

state the mission of the business.
a. Company’s purpose
b. Future goals

2. The second part of the business plan should include a

detailed description of the proposed (or actual)
business.
a. Type of business form
b. Type of business
How to Create an Effective Business
Plan?
3. The third step is the description of the company’s
history.
a. Startup
b. Existing

4. The fourth step that must be considered while

constructing a small business plan is product or service
being offered by your company.
a. A description of how the product or service you intend to
offer (or are) offering will benefit the consumer.
b. A description of the anticipated demand for your product
or service.
How to Create an Effective Business
Plan?
c. potential cash flow from your product or service.
d. Product process.
e. Strategic location.
f. Potential barriers.
g. Pricing.
h. Funding/Budget/Financial Projection.
i. Costing and Inventory Control.
How to Create an Effective Business
Plan?
5. Another integral part of a small business plan is a description of how
the employees and staff will play an important role in the total
operation of your business. Among the factors that should be
considered are:
 How does your or your employee’s background and business
experience help you in this business?
 What are your strengths and weaknesses and how can you
compensate for them?
 What are the duties of all of the employees and how do they fit into
the long term plan for the organization?
 Do you have all of the employees you need? Must you hire and train
additional personnel? Will they be ready in time to help your
business?
How to Create an Effective Business
Plan?

 What salaries, benefits, etc. will you are offering your

employees? Will they be competitive with the other
companies in your field?
 What will you do to keep your employees happy and
productive?
Elements of a Business Plan
1. Cover sheet
2. Table of contents
I. The Business
A. Description of business
B. Marketing
C. Competition
D. Operating procedures
E. Personnel
F. Business insurance
Elements of a Business Plan
II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss
statements)
F. Pro-forma cash flow
Elements of a Business Plan
III. Supporting Documents
Tax returns of principals for last three years
Personal financial
For franchised businesses, a copy of franchise
contract
Copy of proposed lease or purchase agreement for
building space
Copy of licenses and other legal documents
Copies of letters of intent from suppliers, etc.