Log In× Close
July 15, 2024
by John Hemak and Mike Koch
Over the years, we have been asked the same question many times, both from customers looking to start up a new business and existing customers looking to expand their business: “Why do I need a business plan?” A solid business plan is important because it addresses every aspect of the commercial venture you are about to undertake. The plan describes your business, it identifies its operational and financial goals, and, most importantly, it helps you determine the best course of action to achieve success for your business.
With this blog, we hope to provide an outline for developing an effective business plan, as well as point out several resources available to help you formulate your own plan.
First, write an executive summary. This is your pitch to provide more information about your business to people. Key items you should include are a mission statement, a brief description of products or services to be offered, and your intended customer base.
Next, describe your company in detail. You will want to include in this description your business’s registered name, business location, and the key employees comprising the business. Your company description should also define your business structure, such as sole proprietorship, partnership, limited liability company, or corporation. If there are multiple owners in the business, this is the perfect time to specify the percentage of each owner’s stake in the company. It’s important to highlight the ownership team’s strengths that will give your business an advantage over your competitors.
Now that you’ve completed a description of your business, it’s time to state your business goals. These should include short-term and long-term goals. These goals can be numbers-based and will recognize the financial and profit goals of the business, as well as strategies to create brand awareness. Explain how you will achieve these targets, either by attracting new customers, adding investors, or obtaining a business loan.
The fourth item is to describe your products and services. This section can be a bit overwhelming, but it is necessary to explain how your product or service works, provide a detailed pricing model, cover your supply chain, and order fulfillment strategies. You should also go into greater detail about the customer base you wish to service.
The last step is to outline financial plans by providing a prospective statement for the next five years. Include forecasted income, operational costs, and cashflow statements. Include a section on unanticipated costs, as it’s important to factor in potential costs so you are not caught unaware if something does come up, and you have a contingency plan in place. You will also want to consider a capital expenditure budget, to ensure the business is able to support future capital projects, such as equipment, personnel, or real estate acquisitions.
The bottom line is that business plans are important because growing a business requires a vision and establishing a business plan will help set you on a successful path.
If you’re looking to get started on your own business plan, there are a several resources available to assist you in developing your business plan:
John Hemak is a Vice President of Commercial Lending for New Tripoli Bank and sits on the board of the East Penn School District Education Foundation. He has been involved in commercial lending for decades and has been a commercial lender for New Tripoli Bank for over 11 years.
Mike Koch is New Tripoli Bank's Business Development Manager and has previously served as a Branch Manager and Assistant Branch Manager. He has been a member of the New Tripoli Bank team for almost 20 years and has decades of experience working with business customers.
Log into Online Banking