Owning a business is the American dream. It has its rewards, but it also has its challenges. Having a business plan and access to financial resources can keep your dream moving forward.

Writing a business plan is the first step in getting your business started and potentially securing bank financing. An effective business plan can serve not only as an ongoing management guide to help you establish your goals and measure your performance, but also can demonstrate to prospective lenders that you are prepared to run a successful business.

Your business plan should be well-conceived, well-organized and thorough. To make sure you present the best plan possible, enlist the help of your accountant or a consultant at a small business development center.

Your business plan should include the following:

• Title page: List the name of the business, the owner or owners, the address, telephone and facsimile numbers, e-mail address and Web site, if applicable.
• Executive summary: Include a brief summary of the plan, telling the reader how the plan is organized. Write the executive summary last so you can use what you have already prepared as a guide. The summary will tell who you are, the function of the company and a brief explanation of your reason for borrowing.
• Company description: Provide an overview of the function and history of your company, its size, products or services and markets.
• Market analysis: Offer a summary of your market research and a look at the trends within your specific industry. Review the market for your product or service and the demand for it. Examine the competition and explain how your company differs from others, as well as what distinguishes you from your competitors.
• Products and services: Describe your product or service and its function.
• Operations: Explain how you make your product or provide your service. Include specific information such as where you get your raw materials, the stages of manufacturing (if applicable); the location of your store if you’re a retail business owner; how you chose the site; where your inventory is stored.
• Marketing plan: Indicate how you plan to promote your product or service and whom you are targeting. Include information on your distribution plan, advertising and sales force.
• Ownership: Describe the ownership arrangements of your business. Is it a sole proprietorship, a partnership or a corporation? If you have partners, who are they? What percentage of the company do they own? How did you choose them as partners? What have they invested in the company?
• Management and personnel: Who runs the company? Who else works for you and why did you hire them? How will their experience benefit your business and contribute to its success? Include resumes of all the employees, including yourself.
• Funds required and expected use: Explain why you need a loan and how you will use the money. How much are you asking for? Offer a realistic and sound repayment plan and a contingency plan in case your initial plan doesn’t work out.
• Financial statements and projections: Include a personal financial statement, personal tax returns and business financial statements, including a balance sheet, profit and loss statement and a cash flow analysis for the last three years, if you have been in business that long. Also include projections for the business for the next three years. It is especially important that this section be complete and accurate since it will demonstrate your grasp of financial concepts and practices.
• Appendices and exhibits: Include here any information that doesn’t fit into the main part of the plan, such as distribution agreements, contracts for the purchase of your product and operating licenses.

Once your business plan is complete, you can approach a banker, who will then have a better understanding of you and your business when making the decision to approve your loan request. To learn more about writing a business plan, you can visit the Small Business Administration web site at: www.sba.gov or the Business Resource section of the Service Corps of Retired Executives (SCORE) web site at www.score.org.

This article is provided by M&T Bank through the efforts of Robert Topper, Vice President, Central Maryland Commercial Region. For more information go to M&T Bank’s web site at www.mandtbank.com.