How to Write a Business Plan

290 Pages·2010·3.02 MB·English

® “ An essential book to help entrepreneurs.”
N O L O
DALLAS MORNING NEWS
10TH EDITION
A MM
LL OO
How to Write a LL FFOORRMMS ON CC DD--RR
Business
Plan
• Write a winning proposal
• Prepare cash fl ow and profi t & loss forecasts
• Get backers to invest
THE LEADING
BUSINESS PLAN
BOOK FOR
25

YEARS
Mike McKeever
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Th e Story
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LOS ANGELES TIMES
10th edition
How to Write a
Business Plan
by Mike McKeever
TENTH EDITION JANUARY 2011
Editor RICHARD STIM
Cover Design SUSAN PUTNEY
Production MARGARET LIVINGSTON
Proofreading CATHY CAPUTO
CD-ROM Preparation ELLEN BITTER
Index MEDEA MINNICH
Printing DELTA PRINTING SOLUTIONS, INC.
McKeever, Mike P.
How to write a business plan / by Mike McKeever. -- 10th ed.
p. cm.
Includes index.
Summary: “Contains the detailed forms and step-by-step instructions needed to prepare a well-thought-out, well-
organized business plan. Th e 10th edition has been completely updated with the laws, banking regulations, and
resources”--Provided by publisher.
ISBN-13: 978-1-4133-1280-5 (pbk.)
ISBN-10: 1-4133-1280-2 (pbk.)
ISBN-13: 978-1-4133-1297-3 (e-book)
ISBN-10: 1-4133-1297-7 (e-book)
1. Business planning. 2. New business enterprises--Planning. 3. New business enterprises--Finance. 4. Small
business--Planning. 5. Small business--Finance. I. Title.
HD30.28.M3839 2010
658.15’224--dc22
2010021162
Copyright © 1984, 1986, 1988, 1992, 1999, 2002, 2004, 2007, 2008, and 2010 by Mike McKeever.
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Dedication
This book is dedicated to the memory of my late grandmother,
Elizabeth Eudora Woodall Darby, whose influence I acknowledged only
recently.
Acknowledgments
After more than a decade of working with many people, I am amazed at the
uniform spirit of goodwill and cooperation.
My first editor, Ralph “Jake” Warner, showed patience working with a
first-time author. My second editor, Lisa Goldoftas, challenged the grammar
while gracefully deferring to my knowledge about the subject.
Also at Nolo: Steve Elias designed many charts; Adam Stanhope
educated me about computers; Mark Stuhr tuned sections on computer-
related material; Stephanie Harolde worked her word processing
wonders on the manuscript; Terri Hearsh designed the book; Eddie
Warner gave helpful suggestions on online information; and many more
folks at Nolo improved the book greatly.
A special thanks to a number of generous individuals, each of whom
knows a great deal about starting and operating a small business. Peg
Moran, Terri Hearsh, Roger Pritchard, Jason Wallach, Harry Keller,
Dan Peters, Sharyn Simmons, Larry Healy, and finally, Hugh Codding
and Leroy Knibb of Codding Investments. For these and all my readers,
clients, and students who have shared their hopes, dreams, and problems
with me over the years, thank you for your help. The best parts are
yours—all the mistakes are mine. Many of your stories and suggestions
appear here in disguised form. I hope all the readers will profit from
your wisdom and generosity.
Mike P. McKeever
Santa Rosa, California
About the Author
Mike P. McKeever’s education, work experience, business ownership,
writing, and teaching careers give him a broad and unique perspective
on business planning. He has a BA in Economics from Whittier College
and a Master’s in Economics from the London (England) School of
Economics, and has done postgraduate work in financial analysis at the
USC Business School. Mike has taught classes at numerous community
colleges in entrepreneurship and small business management. He has
published articles on entrepreneurship for Dow Jones publications,
the Sloan Publications Business Journal, and numerous newspapers and
periodicals.
Mike has successfully purchased, expanded, and sold a number of
businesses, including a manufacturing company, tune-up shop, gas
station, retail store, and commercial building. He has worked for a
variety of companies ranging from small groceries to multimillion-dollar
manufacturers. As an independent business broker, he assessed the
strengths and weaknesses of hundreds of companies. As senior financial
analyst for a Fortune 500 company, he wrote and analyzed nearly 500
business plans.
Currently, Mike enjoys email correspondence with a few readers
relating to business plan issues. He also acts as consulting controller and
financial advisor to an online retail business. You can contact him at
[email protected].
Downloading Forms and Other Materials
The printed version of this book comes with a CD-ROM that contains
legal forms and other material. You can download that material by going to
www.nolo.com/back-of-book/sbs.html. You’ll get editable versions of the
forms, which you can fill in or modify and then print.
Table of Contents

Your Legal Companion ..................................................................................................................1
1
Benefits of Writing a Business Plan ..................................................................................5
What Is a Business Plan? ...................................................................................................................6
Why Write a Business Plan? ............................................................................................................6
Issues Beyond the Plan ......................................................................................................................8
2
Do You Really Want to Own a Business? ..................................................................11
Introduction ..........................................................................................................................................12
Self-Evaluation Exercises .................................................................................................................13
How to Use the Self-Evaluation Lists .......................................................................................17
Reality Check: Banker’s Analysis .................................................................................................17
3
Choosing the Right Business ..................................................................................................21
Introduction ..........................................................................................................................................22
Know Your Business ..........................................................................................................................22
Be Sure You Like Your Business ..................................................................................................24
Describe Your Business ...................................................................................................................24
Taste, Trends, and Technology: How Will the Future Affect Your Business? ........30
Break-Even Analysis: Will Your Business Make Money? ................................................34
What You Have Accomplished ...................................................................................................47
4
Potential Sources of Money to Start or
Expand Your Small Business ...................................................................................................49
Introduction ..........................................................................................................................................51
Ways to Raise Money .......................................................................................................................51