You will now be able to use all the work you have done up to this point to do your first draft of your plan. You will need to take all the notes you’ve made in each section, and put them into sentences in an order that will make sense to your reader.

For the first draft, don’t worry about grammar or the language used. Don’t feel that you have to use all the information you put down in your notes. Use just the material that makes your case compelling. Just get all the relevant data down in sentence form in proper order. Using a computer will make this process much easier since you will be able to make changes without starting over each time.

Once you have done that, you are ready for a second draft. In this draft, look for what is missing in your argument - what may not logically follow or won’t give the whole picture to your reader.

Third draft - this time try to take out extraneous words and add language that brings life to your plan.

For your final draft, incorporate comments from others, number the pages, and add a table of contents and cover page. Pull together all the information for your appendices. You are now ready for the final step: The Executive Summary.

Use high impact words like:
Capitalize
Flourish
Expertise
Specializes
Experts
Full-service
Assembled
High-visibility
Real-time
Secured
Commitments
Nationally-recognized
Strong
Growth
Reputation
Development
Trends
Quality
Perform
Impact
Significant
Analysis
Potential
Strategy
Full-scale
Projects

TIP: Don’t forget to use the name of your company often, and perhaps in distinctive typestyle like in these examples. Add graphic interest to show your personality without distracting from your message. Otherwise, use only one or two typefaces (like Times or Helvetica which are among the most easily readable). You also don’t need special paper (use white only, except for the cover) or a special binding (a spiral or comb binding available at any copy store is best).

A balance sheet is a statement of what the company owns and what it owes at a fixed point in time. It remains important to look at changes occurring from month to month because there is a direct relationship between changes in your balance sheet and your cash flow.

The Year at a Glance Balance Sheet allows you to track balance sheet accounts for trends. It also allows you a measurement system to track goals you may have to decrease inventory, or decrease accounts receivable (both of which would increase your cash).

The most important accounts to focus on are cash, accounts receivable, inventory, fixed assets and accounts payable. If accounts receivable go up—your cash goes down
• If inventory goes down—your cash goes up
• If accounts payable goes down—your cash goes down
• If fixed assets go up—your cash goes down.
ASSETS
Current Assets
Cash
Accounts Receivable—money owed to you by your customers
Inventory—your product waiting to be sold, either at your location or at a store
Prepaid Expenses—items such as insurance or taxes (example: an insurance premium is paid up front for a whole year; this entry spreads it out over the policy period)
Other Current Assets—miscellaneous items like rent deposits
Fixed Assets—real property, equipment and leasehold improvements
Accumulated Depreciation
Net Fixed Assets
Intangible Assets—good will, intellectual property—rights to something, trademarks, patents
LIABILITIES
Current Liabilities—an amount you owe to someone else, generally to be paid within 1 year
Notes Payable
Accounts Payable
Accrued Liabilities
Long Term Debt
EQUITY
Retained Earnings—the amount of net income the company has earned and kept since the first day of the business, less dividends to shareholders

Start-up Costs
Starting a new business is particularly costly because there are costs that only occur once - when the business is new, and before it opens for business. Just list these with dollar amounts in the body of your plan. These include:

Legal, Accounting and other professional fees
Lease deposits
Equipment
Licenses/permits
Insurance deposits
Salaries

KEY MISTAKE: Underestimating the amount of money you will need to start and operate your business for the first year or more until you can exist with a comfortable cushion from your own profits. Most business plan writers underestimate their start up costs, and the amount of time it will take to bring in a steady stream of revenue.

How to Begin Your Spreadsheets
You have two main categories of items you must project for your income statement: revenue and expenses. How much money will come into your business from selling to customers, and how much will go out in what you must pay to keep your business going.

The income statement includes costs that start THE DAY you “open” for business. The start-up costs are all the costs incurred before that day.

Income Statement: Making Revenue Projections

Projecting revenue can be an educated guess if you are just starting your business, but you must base them on something. Also, it is highly unlikely that you will start your first month in business at maximum sales capacity. Show a reasonable ramping up to your sales target over the first few months or even the first year. Base your revenue projections on what you do know: your pricing (average size of check in a restaurant, average invoice per client for a consulting firm) times your volume (number of tables in a restaurant, number of clients for a consulting firm).

Income Statement: Making Expense Projections

Expense Categories
Circle the categories that apply to your business and add to the list any categories that you will need. Then consider when you will have the expenses in each category.

Cost of Goods Sold (for product-based businesses)
Materials purchased
Finished Inventory
Production supplies
Shipping supplies

Personnel
Salaries and wages
Bonuses
Payroll taxes
Employment expense
Training
Group medical insurance
Temporary Help
Workers Comp insurance
Other Benefits

Sales and Marketing Expenses
Direct Mail
Advertising
Publicity
Consulting expenses

General and Administrative Expenses
Facilities:
Rents/mortgage payments
Property taxes
Repairs and maintenance
Utilities
Property and liability insurance
Administration:
Automobiles
Bank Charges
Computer supplies
Dues & licenses
Professional services
Office supplies
Telephone
Travel
Entertainment and Meals

KEY MISTAKE: Underestimating the amount of money you will need to start and operate your business for the first year or more until you can exist with a comfortable cushion from your own profits. Most business plan writers underestimate their start up costs, and the amount of time it will take to bring in a steady stream of revenue.