Business Plan

Gregory J. Cook, EA, CPA+ Accredited Tax Advisor Past President Alabama Society of Enrolled Agents Past President Alabama Association of Accountants

Business plans are used for a variety of purposes. Lenders and investors often require submission of a written business plan before considering funding an enterprise. Cook and Co. develops business plans to help predict whether a business idea will be profitable. We create business plans for our clients use in budget projections and setting sales goals. The most effective business plans are tailored to fit a specific need.


A business plan can also be valuable as a management tool. Although a business plan is based on predictions and actual results may differ, the process of writing a business plan can help a business owner or CEO identify potential problems as well as opportunities.

BUSINESS PLAN – SAMPLE OUTLINE

COVER SHEET: Company name, phone and name of owner(s). If there are concerns about keeping the information confidential, a reference number conspicuously placed on the cover sheet will indicate that the company is monitoring the location and status of the business plan. Legitimate reader will be more careful with the document, and those who might misuse the information will be hesitant to do so.

TABLE OF CONTENTS: Plan’s major sections and subsections referenced by page numbers. It should be concise, descriptive, and easy to follow.

PLAN SUMMARY: Brief description of what is covered in the business plan. Perhaps the critical part of the business plan; an effective plan summary will create a good first impression, capture the reader’s attention, and set a positive tone for the reader when reviewing the remainder of the document.

THE COMPANY: Overview of the company policies, business philosophy, and relevant background information. Should include a comprehensive description of the management team (lenders and investors often consider the management team the most important factor in evaluating a company), brief description of the product or service, marketing strategies, and mission statement. Also include the developmental history of the company, including legal structure and any prior significant changes in ownership.

PRODUCT OR SERVICE: Detailed description of the product or service. Relevant topics include sales history, sales projections, profitability and competitive advantages. Independent evaluations of the product or service, which indicate quality can be included in this section. If the company is developing a new product or service; use this section to demonstrate that there is a market for the product of to the new customer within a reasonable period of time.

MARKET ANALYSIS: Explanations of why people pay for a particular product of service. Should include a summary of the industry with which the business is associated; analysis of current customers and their buying habits; and identification of potential customers through market projections. Include a list of major customers, the amount of business they provide, and a description of any sales contracts currently in effect. Other possible topics include analysis of competition and comparison of products or services, pricing, advertising policies and distribution. Market analysis is usually the longest section of the business plan.

FINANCE: Show a thorough presentation of financial statements, the break-even point and profit forecasts for the business. Include quarterly or monthly statements of cash flows and income, and yearly balance sheets for the previous five years (or as long as business existed). Provide current financial statements, as well as cash flow and income projections for three to five years into the future. Discuss expected capital requirements, and list all major anticipated expenses. Explain the company’s system of financial controls. Include the names, addresses, and phone numbers of key legal and financial advisors.

PROJECT: When seeking financing for a specific project, describe the project in detail including a stand alone break-even analysis. Show the amount of financing needed, the manner in which the money will be used, and the overall effect the project will have on the company cash flows.

OWNERSHIP: Names and addresses of owners/major stockholders and the nature of their involvement with the business. Provide the names and addresses of the board of directors. Show amount of stock authorized and issued, and address any significant ownership changes that may be imminent. Include a detailed explanation of any buy/sell agreements or succession plans currently in place.