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Whether you're starting a new business or growing an existing one, a well-constructed business plan can help you define your products and services, determine your target market, scope out the competition and create a structure for success. If you're looking for financing, it's essential—lenders will analyze your business plan to help determine if you're a good credit risk. Knowing the time and effort required to create a business plan will go a long way in allowing your business to be successful!

What's included in a business plan?

Each business plan is unique, but here are some common elements:

  1. Mission statement—one or two sentences summarizing your business goals and philosophy. For example, Harley Davidson's mission is to "fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments."
  2. Business concept—the description of your products and services, facilities (home or commercial office, factory, garage, restaurant, retail shop, etc.) and day-to-day operations.
  3. Management team—roles and brief biographies of you and anyone else involved in management of the business. Focus on the experience and expertise that will help move your business forward, especially if you're looking for financing.
  4. Industry analysis—trends in the industry, what the competition is doing, how you will differentiate your business and expectations for growth.
  5. Financial analysis—projected income and expenses for one to three years, current financing needs and growth expectations for the future.
  6. Marketing and sales—how you will position and market your business, using traditional advertising (print, TV, radio, direct mail) and/or online marketing, such as a website, social media and search engine optimization.
  7. Why you'll succeed—positive—but realistic—assessment of why your venture will be successful. Include your passion for the business, the need or niche market you'll fill, and the demographics of your target market.
  8. Executive summary—a one-page summary of the above information.
  9. Appendix—any charts, graphs, spreadsheets or other supporting information, such as copyright or patent filings and research and development activities.

Putting it all together

If this sounds like a lot of work, it is. Getting all this information down on paper may seem a bigger challenge than coming up with your business concept in the first place. But it's a necessary and valuable step toward developing a business model that works.

The good news is that you don't need to do it alone. You can find help online at the U.S. Small Business Administration and at any of its district offices throughout the country. In addition, SCORE, a nonprofit organization dedicated to supporting small businesses, offers free advice and mentoring, along with initiatives specifically for military veterans.

Finally, Navy Federal offers members a wealth of business solutions, including assistance with preparing business loan requests in order to help maximize your chances for loan approval. So if you're in the business of starting or growing a business, contact us today.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.