Business Plan
Preparing Your Business Plan
Too many people think strategic planning is something meant only for big businesses, but it is equally applicable to small businesses. Strategic planning is matching the strengths of your company to available opportunities. To do this effectively, you need to collect, screen, and analyze information about the environment of your company.
Outline:
1. Executive Summary: Write this last. It’s just a page or two of highlights.
2. Company Description: Legal establishment, history, start-up plans, etc.
3. Product or Service: Describe what you’re selling. Focus on customer benefits.
4. Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.
5. Strategy and Implementation: Be specific. Include management responsibilities with dates and budgets. Make sure you can track results.
6. Web Plan Summary: For e-commerce, include discussion of website, development costs, operations, sales and marketing strategies.
7. Management Team: Describe the organization and the key management team members.
8. Financial Analysis: Make sure to include at the very least your projected Profit and Loss and Cash Flow tables.
Get organized!
It is not recommend developing the plan in the same order you present it as a finished document. For example, although the Executive Summary obviously comes as the first section of a business plan, I recommend writing it after everything else is done. It will appear first, but you write it last.
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Register your business – Don’t overlook it; it’s not only the law, but it also affords several benefits. For instance, it will enable you to open a business bank account, write off business expenses, and help you leverage competitive pricing agreements with wholesalers. Registration involve several steps, not all of them necessary, but important to be aware of:
Register a “Doing Business As” Name - If you are operating an online store under a name other than your own, you may need to register a “Doing Business As” name, also known as a DBA, trade name or assumed name. You can do this directly with your local government. If you’re not sure whether you need to register a DBA, check with your local government office.
Choose a Business Structure – Many small businesses operate as sole proprietorships, meaning there is no legal difference between your business and you, as an individual. You’ll also file your business taxes on your personal income tax. No formal action is needed to form a sole proprietorship. Often, online marketplace business owners file for incorporation or become an LLC to help separate their business and personal finances and gain legal protection as a business entity. Consult a lawyer or legal expert to help you determine the pros and cons of incorporation and how to register.
Obtain Licenses and Permits – These are a necessary part of doing business and are required by your state and local government. Even online and home-based businesses cannot operate legally without them. Use SBA’s License and Permit tool to find out what’s required.
Get a Sales Tax ID or Permit – You’ll need a sales tax ID in order to collect and pay sales tax. The law about collecting sales tax online can be confusing and is explained here. Many online marketplaces offer tools to help you calculate sales tax, but as of now, it’s your responsibility to pay it. In order to collect sales tax, your state may require you to obtain a sales tax permit. You can find SBA’s links to state tax resources here.
Get a Federal Tax ID – If you have employees or are structured as a partnership, corporation or other types of organization, you’ll need to get an Employer Identification Number (EIN) from the IRS. It’s the business equivalent of a social security number. You can apply for an EIN from the IRS online.
While these are some of the main legal steps you’ll need to follow, there are other important considerations, including:
- Pay estimated taxes
- Maintain good records so you can maximize your tax deductions
- Separate your personal and business finances – Open a business bank account(this will help you facilitate PayPal transactions) and apply for a business credit card
- Engage the experts – Consult a tax specialist or accountant. They don’t have to be on retainer, but can provide great advice as you get started in business. Local resources including Small Business Development Centers, and Women’s Business Centers, offer free training and counseling to small business owners.
