Analysis of Your Present Situation

Whether you're in business now or you're just beginning, the starting point of writing a plan includes a thorough analysis of where you (and your business) stand.

This is a time to be brutally honest with yourself. Consider your present financial circumstances. Exactly how much do you have in the way of personal (and business) assets and liabilities? For the business, you may make a detailed assessment of your current financial position to gain some insight into how to gather and analyze the required information. You'll also want to take a look at your personal financial assets, to see how much you can realistically invest in the business (or how much the business must contribute to your personal budget).

If you're currently in business, you'll want to create a snapshot of its activities, personnel, operating methodology, and other nonfinancial factors. This is particularly important if the business plan you're working on involves expanding the scope or extent of the activities that your business performs. If you personally participate in or direct those current activities, how much time will you have for the newly planned business idea? How about your employees? Obviously, if you're just getting ready to go into business, your current situation analysis won't include this type of operational analysis.