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Building a Business Plan If youíve ever tried to get funding for your business ó either from lenders or from investors ó you know that the first thing they want to see is your business plan. Most of us are so busy running our businesses that we donít have the time to research what goes into a business plan, let alone pull together the material in a coherent format. Enter the Business Plan Tool in QuickBooks Premier and QuickBooks Enterprise. The Business Plan Tool uses your QuickBooks data and walks you through, step by step, creating a business plan that you can present to lenders or investors with confidence. The plan that the tool builds is based on the format that the Small Business Administration recommends for lines of credit or loan applications. The Business Plan Tool can seem overwhelming because there are lots of screens to step through, but you can stop and return later to finish. In this article, weíll show you how to fill in enough data to get a sense of how the tool works. Weíll show you how to provide enough financial data to get started building the plan, and weíll show you how to export your plan to Word and Excel. You also can save your plan in PDF format so that you can e-mail it to anyone who wants to see it. Describing Your Company To start building your business plan, open the Company menu, point to Planning & Budgeting, and click Use Business Plan Tool. The QuickBooks Business Planner loads. This tool is actually a separate program that integrates with QuickBooks; if you look at the Windows Task Bar, youíll notice two QuickBooks icons, one that represents your company data and the other representing the Business Planner (see Figure 1).
Figure 1. The Business Planner is a separate program that integrates with QuickBooks. (click to enlarge) The Business Planner operates like a wizard, walking you through the process of creating a business plan. On the opening screen, you see the major steps involved in creating the plan; as you step through the Business Planner, youíll find that each major step consists of several screens of information that you need to complete. Click Next to begin. In the Company section, you provide your company name, contact information, and the plan start date. You also identify your tax form to include your business organization in the plan, and you describe your credit policy. The Business Planner fills in much of the information for you using the information contained in your company data file. Youíll find yourself simply clicking Next and confirming that most information is correct. When the Business Planner asks you to describe your credit policy (see Figure 2), it provides you with information to help you provide accurate answers. For example, if you offer terms to all of your customers, enter 100% in the Sales on credit box. The page explains that cash, checks, and credit card sales are not considered sales on credit, and if you accept only those methods of payment, you should enter 0% in the Sales on credit box.
Figure 2. As the Business Planner prompts you for information, it also explains concepts to you. As you work through a section, you can determine how far along you are in that section by the progress indicator that appears in the upper right corner of the screen (refer to Figure 2). And, if you need to postpone completing the plan, simply close the Business Planner using the X in the upper right corner of the window. When you reopen the Business Planner at a later time, the Business Plan tool automatically displays the screen where you stopped previously. The Income Section A business plan projects future income, and in the Income section (see Figure 3), you identify the income categories to include in the plan; using the Projection wizard, QuickBooks suggests that you include all accounts in your company data file that are Income accounts. Also using the Projection wizard, you can apply an annual growth rate.
Figure 3. Use the Income section of the Business Planner to identify income categories and project growth. (click to enlarge) The Expenses Section The Expenses section (see Figure 4) works very much like the Income section of the Business Planner. You use the Projection wizard to identify expense categories and project the growth of your expenses. In the Expenses section, the Business Planner guides you through selecting expense categories appropriate for the plan; you shouldnít select expenses such as bad debt or depreciation, because the Business Planner calculates those values for you.
Figure 4. Use the expenses section to identify expenses and project growth. (click to enlarge) The Interview Section In the Interview section, you walk through another wizard to supply asset, liability, and equity information about your company; the Business Planner uses this information to calculate the cash you will need at the start date you selected for your plan. The wizard of this section asks questions about beginning account balances, minimum cash balances, inventory and terms offered by your suppliers, whether you need to invest cash at the beginning of your plan to meet your planís goals, and whether you have that cash available. When you complete the Interview section, you will have entered sufficient information for the Business Planner to produce reports and graphs using the assumptions you provided to see the impact on your financial statements. You can print the following reports:
The reports, with the exception of the Business Plan report, are financial reports that, for the most part, show month-by-month projections. In Figure 5, you see the Profit &Loss Statement for the third year of the plan.
Figure 5. The Profit & Loss Statement shows a month-by-month projection. (click to enlarge) You also can print a variety of graphs:
The Business Plan report produces the actual business plan that you can print; before we look at the Business Plan report, weíll briefly review the Plan section of the Business Planner, where you provide the text associated with your report. The writing section is split into three sections: the Outline section, the Topic Guide/Example section, and the Text Entry section (see Figure 6). The Outline section lists the major sections of your business plan, and you use it to navigate in your plan. The Topic Guide/Example section offers advice on completing each section of your business plan, and you do your writing in the Text Entry section, which works like a word processor. Using the toolbar, you can insert reports or graphs into a section, check spelling, or even search a section.
Figure 6. You can prepare the text that you need for the various sections of the plan using the Plan tab. (click to enlarge)
If you want, you can export your business plan to your
default word processor and Microsoft Excel. You will find the option to
export the plan when you preview the plan on-screen (see
Figure 7); on the same preview
screen, you can save your plan as a PDF file.
Figure 7. You can save your business plan as a PDF file or export it to Excel and your default word processor. (click to enlarge) Summary The Business Planner makes it easy to create a viable business plan, removing much of the guesswork from the process. With a business plan, you will be in a better position to obtain financing for your business or plan for future purchases or expansion.
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