Every entrepreneur has heard of needing to write a business plan, the bad news is that you should really be writing two business plans.  They are your operational business plan and your financing business plan.  The reason is that the business plan has two distinct audiences, and you should tailor each version of your plan for the audience it is written for.

The Operational Business Plan:

The operational business plan is what most entrepreneurs think of when it comes to writing a business plan.  This plan will focus on how you plan to grow and run your business and really should be reviewed on a periodic basis to determine how you are performing to plan and what changes may need to be made both to the plan, but also to how you operate the business.  The key sections of an operations business plan include:

Business Overview: Including a description of the business, its strategy, marketing, personal, and growth plans.

Financial and Quantitative Data: This is how the organization measures itself, both in terms of where its been but where it is going.  This should include both financial and non-financial measure (i.e. number of employees, regulatory milestones, etc...).

The Financing Business Plan:

The financing business plan is the document you would give to a prospective investor prior to them making an investment decision.  As such it will have a number of similar items to your operational business plan (including description of the business, competition, personnel, marketing, etc...), but will most likely not have the same level of granularity as your operational business plan.  Remember, you want a potential investor to be able to understand the business, not to have so much information that they can get lost in it.

In a financing business plan there will need to be a large emphasis placed on financial metrics and plans, and it should include:

Profit and Loss (Income Statements) for three years if available

Balance Sheets for three years if available

Pro Forma income projections for five years

Pro Forma cash flow projections for five years

Cash flow break-even Analysis

Monthly projections for the first year of projections

Key assumptions upon which the projections are based

An overview of the capital structure (detailing key and large investors)

Current assets (cash, receivables and inventory)

Valuation metrics for a potential liquidity event