Startup basics: considering opening a business? Start by getting a plan on paper and exploring funding.

How to start writing your business plan

A first step to starting any small business is developing a business plan. Putting your plan on paper will force you to think through important issues you may not otherwise consider.

The plan will become a valuable tool as you set out to raise money and it will provide milestones to gauge your success.

While plans vary, the Small Business Administration advises that every plan contain details about these basics:

* A description of the business

* Marketing

* Finances

* Management

The plan should include an executive summary. Supporting documents, the SBA says, should also be included, such as tax returns of the principals for the past three years, personal financial statements and resumes of the principals, copies of any proposed lease or purchase agreement for building space, copies of licenses and other legal documents, and if it's a franchise, a copy of the franchise agreement and related documents.

There are several SBA-related Web sites to help:

SCORE, an SBA resource partner, has created an online gallery of business plan templates (www.score.org/templategallery.html) that can help you navigate the writing process. It contains business plans and financial and accounting statements created by the SCORE counselors.

SCORE also has an online workshop (www.va-interactive.com/score) on writing a business plan.

The SBA's Web site also offers information on startup basics, an online business startup guide and online workshops (www.sba.gov/starting_business/startup/guide.html).

The site also has articles that can help assess whether entrepreneurship is for you.

What lenders want to see in a loan proposal

After you've written your business plan, if you're seeking funding, a well-crafted loan proposal is your next step.

A loan proposal must answer:

* Who are you?

* How much money do you need?

* How are you going to repay the loan?

* What happens if you can't repay it?

The SBA advises that a loan proposal contain:

A summary. This should be clear, concise, accurate and inviting. Summarize how the loan will be used and repaid.

Top management profiles. You will need resumes, a summary of experience, and the qualifications and credentials for owners and key members of management.

Business description. Include a brief overview of the history and a summary of current activities. Demonstrate that you understand your field. It is also helpful to include letters from suppliers, customers and other business references.

Projections. Include projected income and cash-flow statements for two to three years. Your assumptions should be clearly stated and realistic.

Financial statements. Include business and personal financial statements. Make sure you understand the "story" that your financial statements tell.

Purpose of the loan. Present a detailed statement of how you will use the loan proceeds. Include proceeds of the loan in your cash-flow projections (and the interest in the projected income statement).

Amount. When determining the amount, ask, "How much money do I need, and how much will they lend?" and not, "Will they lend it?"

Repayment plans. In the first package, you will propose the terms you want, but ultimately this will be a point that will be negotiated with the bank.

This information is from www.sba.gov. Read more about loan proposals and other finance topics at www. sba.gov/.starting_business.