Ew Businesses or Businesses Seeking Funding

The executive summary is arguably the most important section of the business plan. It must be concise, specific, and well-written. It

summarizes the highlights of the completed business plan and provides a brief snapshot of the plan, with sales, spending, and profit

summary figures. The summary emphasizes those factors that will make the business a success. It must contain sound numbers

for market size, trends, company goals, spending, return on investment, capital expenditures, and funding required.

For new businesses or businesses seeking funding, credibility and excitement are key elements of the executive summary. Venture

capitalists receive hundreds of plans each month, and just a few are actually being read from cover to cover. A quick 20-second scan

of the executive summary is the basis for screening which plans to read and which companies to interview for investment. When the

plan is the vehicle used to attract financing or investment, the executive summary should make it clear to the reader who is a

potential source of funds why this is a sound investment.

Business Background

The business background section of your business plan generally consists of two to four sections that present information that is

specific to your business. You may have gathered substantial information about competitors and the industry in general in the

course of considering your business plans. This is not the place for that information. Instead, concentrate solely on those

characteristics of your business that are specific to your particular business.

The business background generally includes the following:

a document describing the business entity and its general operation

a document describing the product or service that your business will provide

a document describing your facilities, if appropriate

a document describing the people in your organization, if appropriate

The Business Entity

The business entity portion of the plan provides information that is specific to your business. This document sets forth the current

status of operations, the management structure and organization, and the identification of key personnel. If the plan is being created

for an existing business, historical information is also included. The business background provides the reader with information

regarding:

the type of business (e.g., wholesale, retail, manufacturing, service, etc.)

type of legal entity (e.g., corporation, partnership, sole proprietorship, etc.)

when the business was established

where it is located

the type of facilities, if any (e.g., retail establishment, manufacturing plant, etc.), although you may need to devote a separate

section to this subject if your facilities are very important to your business

the number and type of employees

the organizational structure (table of organization showing who is responsible for what)

operational information, such as a schedule of the hours the business is open

identity of key employees, including a description of their abilities that make them vital to the success of the business. You

may decide to devote a separate section to employees, if you think they are key to your success.

The information provided should go beyond a simple statement of facts. For example, if you chose to incorporate rather than to

operate as a sole proprietor, what factors influenced your decision? Explaining why a particular decision was made goes a long way

in helping the reader understand your decision-making process.

Don't forget yourself when you think about key employees, particularly if you're starting a new

business. You need to present your educational background and prior business experience in a

way that establishes your ability to succeed. While you probably won't include a copy of your

resume, much of the information that appears on your resume will appear in the plan. Don't be

afraid to present yourself in the most favorable light that you can honestly and objectively

portray.

The business background is also the place to identify the goals and objectives of the business by explaining in general terms what

business you are in or want to be in. How is it unique and why will your goods or services appeal to customers? This requires

consideration of competitors who are appealing to the same customers. Why will customers prefer your business to theirs?

Note that startup businesses face a special challenge when drafting the business background. In the absence of an existing

business, the background will be couched in terms of what the business will do, not what it has done. This makes it even more

important to have a clear picture in mind of how your business will look and operate once it's up and running. When you have a track

record, it's easy to point at the results you've achieved as an indication of your potential for success. Without any history, you'll have

to work a little