So with a weird turn of events this week, I am veering from my typical media-explosion blog and turning my attention to small business. After reading an interview with Ron Johnson concerning his recent appointment as CEO of J.C. Penney’s, I began thinking about business as a concept and more specifically, entrepreneurship in general. Having previously read a blog written by my boss about how he does not actually write out a business plan, I have been thinking that I could not do that. I am a person who would need that physical guide to know where I am at, where I am going and most importantly, something tangible in my hands to know how I am supposed to get there. After doing a web search, I found it exceptionally difficult to locate a guide about what actually belongs in a business plan. Printready.co seems to be a perfect place for this type of guide.

A business plan is a road map, a tool for you to use as you pursue the goals of your business. It is also a tool which investors will use (along with interviews and industry insight) to decide if your idea is worth an investment.

A business plan will make or break even the most innovative, precisely planned idea.

But what the hell is it? In the past, I thought I had ideas that could be implemented at a profit. But I didn’t know where to go with them. I believe if there had been a simple guide to writing a business plan available to me, perhaps I could have followed them to conclusion. So my research into this matter can benefit you.

In the most basic terms, a business plan shows that you have followed an idea to its practical application. Any solid business plan can be seen to contain six parts. Most of them are simple, but all require thought to design, clear writing and a clear pathway to implementation. These are the most basic elements:

Cover sheet

A cover sheet is just that. It is simple and contains important information. It should state the name of your business and your contact information. It should be cleanly organized. Plan on catching attention with professionalism rather than loud colors or ornate design, especially if you are planning on taking it to an investor.

Disclaimer

This is designed to make sure the ideas contained in your business plan are safe. You’ve put time and energy into creating an important document and you do not want people taking your idea. The disclaimer should state clearly that the information contained within is your own research and projections and all innovations are your property.

Index

This is for ease of use for a potential investor and to find specific information quickly.

Executive Summary

The could possibly be the most important part of any business plan. Ideally, it will summarize all the information contained in your plan in no more than 4 pages and be approximately 1400 words. It should be noted that large, easy to read type should be used as potential investors will probably not read more than these few pages before determining if they are interested in your idea. In fact, the idea of the executive summary is to get a potential investor interested enough in your idea to read the next section. You should choose your words carefully and use simple words, sentences and paragraphs. The executive summary is very detailed and I believe it contains very important parts best listed separately from this generalized list as a whole.

What type of business do you propose creating? Is it a tradition production-type business? Or is is service oriented? What will your business do?

What is special or unique about your business? Or your method of conducting the business?

What is your experience in the field? You should briefly relate why you are in a unique position to operate this business by explaining your experience.

Explain the upside potential of your chosen market. What opportunities to be profitable have you located within your market?

Explain what changes or trends or gaps in this market have created this particular opportunity? Also be very forward with your unique disadvantages. If you’ve never managed a company, say so. Investors will certainly see it and want to know that you understand your weaknesses.

Main Body

While the executive summary is the most important part of a business plan, the main body fleshes out your ideas and provides specifics about how you plan to implement your idea. The main body should explain who your market is, how you plan to market your idea, relevant research about your potential client base, how you will produce your service or goods, reasonable financial information including a monthly plan for the first year and annual plans for the next four years. It should also explain your expansion and growth strategy. In this section it is also important to explain who is running things and why they are in that position and if you are seeking investment capital, how much of the company you are willing to give up. You should also detail how much money you have to implement the idea.

Exhibits

This is where you can organize your market research, but do ensure that you haven’t overstated your market. Show off what you have discovered and how you know your idea will work.

This is a simple guide for developing your small business plan. Just be sure that you have done your research, have a good idea and be realistic with your financial projections. Good luck!