At The Jayson Law Group LLC we want our readers to understand our passion about New Jersey business law and if we can pass on some helpful information in the process, even better. This article is designed to assist you start a business. Whether you need investors or you are starting the business with your own funds, a business plan is invaluable. The content of your business plan depends on the audience with whom you are addressing.
If You Plan on Attracting Investors
You should design your business plan to demonstrate to skeptical potential investors or partners that you have found a product or service that is in demand and that you are the right person to build a success from the idea. This means your business plan should include:
- A persuasive introduction with a statement about the purpose of your business and request for funds
- A detailed description of how the business will work, including your product or service, employee base, suppliers and your business location.
- An evaluation of your market, including who your customers and competitors are
- A description of your marketing plan (how you intend to reach your customers and deflect competitors)
- A resume detailing your previous business accomplishments
- Detailed financial records, including your best estimates of start-up costs, revenues and expenses, and ability to make profit
Since you are submitting your business plan to people you probably do not know very well, make sure that the writing and format of plan are polished, professional, understandable, and accurate.
When you plan on partnering up with investors, it is a good idea include with your business plan a draft of the By-laws of a Corporation or the Operating Agreement of an LLC in order to give them an idea of what their contribution to the financial beginnings as well as any other responsibilities they may be involved with in the business. Many investors also like to see business plans in order to plan for tax treatments and what to do if you conduct business out of state, and other legal concerns.
If You are not Looking for Outside Investors
You will not be focusing on selling your business idea, or polishing your resume. However, you will be focusing a great deal of attention on your financial projections. They should include:
- A break-even analysis: Use income and estimated expenses to determine, in theory, whether your profit will at least meet your necessary costs.
- A profit-and-loss projection: Further refine your sales and expense estimates into a formal, month-by-month projection of profits in your business’s first year.
- A cash flow forecast: Even if you project profit, your revenue may be wrapped up at times when you need cash on hand for monthly expenses. A cash flow forecast lets you know if you will need a credit line or other arrangements to cover those monthly expenses.
- A start-up cost estimate: This is simply a total of the expenses incurred before your business opens. These may need to be included in your month-to-month cash flow forecast as well.
Even though you may not be talking to investors, you may still need to show your business plan to potential suppliers, contractors, employees and even customers, so make sure it is comprehensive enough and well-written. A particularly impressive business plan may even attract offers for mergers or acquisitions.
When you decide to go into business for yourself, then your business plan should include a draft or copy of the By-laws of a Corporation or the Operating Agreement of an LLC in order to plan for employee or partner provisions and tax treatments. Plus, it allows you to include benefit program rules, and plan for taxes, benefits, and insurance payments.
Click here or call us today at (908) 258-0621 to speak to a Newark, NJ business attorney for more information.