Business Planning 101

By Rhea Landholm - Center for Rural Affairs

The most effective development strategy for rural communities is small entrepreneurship – locally-owned and operated small businesses.

The first step in creating a small business is having a great idea. Next is writing a good business plan to help you make superior business decisions. Business plans are also crucial to obtain financing.

Think of a business plan as a resume for your business that should be written down and formalized. In general, it contains:

— Executive summary: a concise overview of the entire plan.

— Market analysis: a description and outlook of your industry, target market, and market test results, if available; lead times for your product or service; and evaluation of your competition.

— Company description: the nature of your business, as well as the factors you believe will make your business a success.

— Organization and management: the organizational structure and details about ownership, delineating roles and responsibilities.

— Marketing and sales management: the marketing strategy (market penetration, business growth, distribution channels, and customer communication) and the business sales strategy (sales force and sales activities).

— Service or product line: a description of products or services; copyright and patent information; and research and development activities you have done or will do.

— Funding request: current and future funding needs, how you will use these funds, and any plans that will affect future funding needs.

— Financials: historical financial data (income statements, balance sheets, and cash flow statements); prospective financial data (pro forma income statements, balance sheets, and cash flow statements); and capital expenditure budgets for any major investments.

— Appendix: any additional information. This may include credit history, product pictures, letters of reference, legal documents, and a list of your attorney and accountant.

For more small business resources, visit

Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.

By Rhea Landholm

Center for Rural Affairs