Creating a business plan can be a rewarding experience for entrepreneurs planning to start their own business. Although a business plan is not a legal requirement for LLCs, members can gain the same benefits from business planning as partners and sole proprietors. LLCs go a step further than many private businesses in their planning activities, since LLCs are required to draft a formal operating agreement in most states.
One of the main purposes of a business plan is to attract funding from loans, grants and direct investment. Since LLCs do not have the ability to sell shares of stock or bonds like their corporate counterparts, this unique business structure relies to a greater degree on the type of funding that a business plan can help to secure.
Business planning can also help to walk LLC members through the vital components of business start-up, forcing them to confront issues that may have slipped through the cracks during informal planning sessions.
Business plans can vary in their form, but most plans follow a fairly standard format. Plans generally begin with an executive summary. Created after all other sections, the executive summary serves to entice readers to delve deeper into the plan, highlighting portions from each section that appeal to the specific reader. Plans include a company summary, detailing the name of the company, the fact that it is an LLC, and any mission or vision statements.
Business plans also include sections on marketing, finance, short- and long-term strategy, and a professional biography of the members. LLC business plans should specify which members will be active in managing the company, as well.
LLC members can choose to create their own business plan from scratch or take advantage of numerous free templates. Starting from scratch may be best for experienced entrepreneurs who know exactly what information they wish to convey in their plan. Using a template may be better for new business owners who want a bit more guidance.
Create two copies of your business plan; always have a printable version and a slide-show version to suit the different situations in which you will pitch the plan.
The LLC operating agreement is a vital document for all LLCs, and attaching your operating agreement to your business plan for internal purposes can help you to get a more comprehensive strategic overview of your LLC. Operating agreements set forth rules and guidelines for members, covering the distribution of profits and responsibility, as well as the contributions of each member and provisions for dissolving the business.
Read More: Can an LLC Operating Agreement Be Amended?
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