Your business ownership structure will be included in this section. A business is a legal entity. It can own property, hold bank accounts and is required to pay taxes. There are different types of business entities, each with unique benefits and limitations.
Get to know the business structure options and discuss them with your advisors to determine which will be best for you. Things to consider when making your decision include:. Sole Proprietorships are owned by a single person or a married couple. These businesses are inexpensive to form and there are no special reporting requirements. The owner is personally responsible liable for all business debts and for federal taxes.
The business has limited legal liability like a corporation, but has fewer governance requirements. For federal taxes, LLCs are typically treated like sole proprietorships if there is one owner, or like partnerships if there is more than one owner. However, by filing an entity classification election form with the IRS, LLCs can be treated like corporations for federal tax purposes. Although not required, forming an LLC should be done with the help of a qualified legal professional.
General Partnerships are like sole proprietorships with more than one owner. Partners share managerial duties, profits and losses, and each is personally responsible liable for all business debt. Because the actions of one partner can result in personal liability for the others, partnerships have become less popular since LLCs have been around.
For federal tax purposes, the business is required to file a partnership return, with the income or loss going to each partner based on how much of the business each owns. Corporations are more complex structures than the others. As with LLCs, corporations have limited legal liability. To form a corporation, you must file with the Washington Secretary of State and you must create a governance document — which, in this case, would be bylaws. Corporations also have other requirements, such as issuing stock certificates, holding annual meetings and keeping minutes, electing directors, etc.
Working owners of corporations are employees and must have federal payroll taxes withheld and reported the same as other employees. Corporations file federal corporate tax returns with the IRS. Although not required, forming a corporation should be done with the assistance of a qualified legal professional. Limited Partnerships LPs are not used very often for small businesses, although they are common for real estate ownership.
LPs are composed of one or more general partners and one or more limited partners. The general partners manage the entity and share fully in its profits and losses. To protect themselves from liability, general partners are often corporations or LLCs rather than individuals. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment.
Limited partners are usually not involved in the day-to-day operations of the entity. Get legal advice before choosing an LP structure for your business. Corporations have bylaws that outline governance. Typically managed by directors who are elected by shareholders. If one LLC member, typically pay taxes as individual. If more than one member, typically pay taxes as partnership. Can elect with IRS to pay taxes as a corporation either c- or s-.
If standard corporation c-corp , taxed as a business. If dividends are distributed to shareholders, dividends are taxed at the individual level. Can elect with IRS to be taxed as an s-corp. This information is for reference only, for detailed considerations contact your trusted legal or tax advisors. A market analysis will help you determine if there is a need in the marketplace for your product or service, who would be most likely to buy your offerings, and where your customers are located.
Most new businesses start small and grow. When you do hire, having employees with the right attributes and skills for your business will be very important to your success. There are resources to help you with employment planning, including Labor Market Information.
Employment is an area that has a lot of regulation, including minimum wage, overtime pay, paid sick leave, employment of minors and family members, workplace safety, etc. The use of independent contractors is a frequently misunderstood area. Generally, state and federal law would require that an individual be treated as an employee unless the individual:. Being an employer also requires you to keep detailed records and fulfill your tax reporting obligations.
If your business is new, this will include projected cash flows, capital expenditures, and the balance sheet. It will also include forecasts as to when the business will break-even. If you lack business or financial education, it is never a bad idea to enlist the help of an accountant to assist with the financial analysis portion of the plan. The above sections are the broad components of the business plan.
These sections in turn break down into the following seven sections, which we will, in order, focus on writing next: Company description, market analysis, organization structure and management, products and services, marketing and sales, and request for funding.
Format your document correctly. Format section titles in Roman Numeral order. Write your company description as the first section. To do this, describe your business and identify the marketplace needs for your product or service. Briefly describe your key customers and how you intend to succeed. Write your market analysis. The purpose of this section is explore and demonstrate knowledge of the market your business is operating within. You should be able to answer questions like, who is your target market?
What are their needs and preferences? How old are they, and where are they located? Make sure to include a competitive analysis that provides research and information on immediate competitors. List your main competitors strengths and weaknesses and the potential impact on your business. This section of the business plan focuses on key personnel. Include details about the business owners and its management team.
If the owners and managers and have extensive backgrounds in the industry or a track record of success, highlight it. If you have an organizational chart, include it. Describe your product or service. What are you selling?
How will customers benefit? How is it better than your competitors products or services? Do you currently have or anticipate developing a prototype, or filing for a patent or copyright? Note all planned activities.
For example, if you are writing a plan for a coffee shop, you would include a detailed menu that would outline all your products. Before writing the menu, you would include a short summary indicating why your particular menu sets your business apart from others. Our wide variety will be a key competitive advantage as we can provide a diversity of product offerings that our main competitors are currently not offering".
Write your marketing and sales strategy. In this section, explain how you intend to penetrate the market, manage growth, communicate with customers, and distribute your products or services. Will you use sales representatives, billboard advertising, pamphlet distribution, social media marketing, or all of the above? Make a funding request.
If you will use your business plan to secure funding, include a funding request. Explain how much money you need to start and maintain your small business. Provide an itemized summary of how start-up capital will be used.
Give a timeline for your funding request. To accurately complete this step, in some cases it might be necessary to hire an accountant, lawyer, or other professional. For one full year, provide monthly and quarterly statements. Each year after that, yearly statements. These documents will be placed in the Appendix Section of your business plan. Include projected cash flows for at least 6 years or until stable growth rates are achieved and if possible, a valuation calculation based on discounted cash flows.
Write the executive summary. Your executive summary will serve as an introduction to your business plan. Remember to place this section at the beginning of your document. When was the business first conceptualized? What are some notable growth benchmarks? Start-ups will focus more on industry analysis and their funding goal.
Existing businesses and start-ups should highlight any major achievements, contracts, current or potential clients and summarize future plans. Potential investors might want to see this information before making a decision. The documents you include here should support claims made in other sections of the business plan. There should a section clearly outlining the risk factors affecting your venture and your mitigation plans. This also indicates to the reader how well prepared you are for contingencies.
Review your business plan for spelling and grammatical errors. Do this several times before deciding on the final version. Rework or completely rewrite content to ensure it works from the perspective of the reader. This is especially true if you are creating a "presentation plan". Read your document aloud. This allows you to detect if any sentences do not flow together well, and it also makes any grammatical mistakes more obvious.
Make a copy and give it to a trusted friend or colleague to proofread and provide feedback. Create a cover page. The cover page identifies your document and gives it aesthetic appeal and professionalism. It also helps your document to stand out. Your cover page should include: The words "Business Plan" centered in large bold font, along with your company name, company logo, and contact information.
Not Helpful 11 Helpful What is a marketing business plan sample for a boutique and fashion store? Not Helpful 14 Helpful You can start with something small. Business cards, website, or anything that will alert people about your company.
You can even post flyers at your local church or grocery store. A business must be registered to make sure that it is legal and a viable choice for investors and customers. Not Helpful 3 Helpful Follow the steps in this article but craft it to make it specific to hardware.
The more you pay, the more advanced business plan options you get. The easy-to-use app guides users through a series of simple questions and prompts. Your answers are used to develop a summary business plan, complete with revenue projections and full-color graphs and charts.
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A business plan is a written description of your business's future, a document that tells what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've . The business plan is the blueprint for your business. You wouldn't walk over to an empty lot and just start nailing boards together if you wanted to build a house. Starting a business without a business plan is just as foolish. .
A business plan gives you direction, helps you qualify your ideas and clarifies the path you intend to take your business. This article will explain some of the most important reasons you should slow down and create a plan to guide your small business journey. Oct 23, · Remember, your business plan is a tool to help you build a better business, not just a homework assignment/5().