Do you need a two year business plan? These are not typical documents, but they do exist. In most lending scenarios, loan officers at a bank or representatives from the Small Business Administration will require a three-year scenario. On the other end of the spectrum, private investors, angel groups, or venture capital firms almost without exception require a five-year financial forecast. In some cases where the business proposal gives only very basic information germane to the start-up or expansion, you will see only a use of funds table showing where the investment goes (i.e., no financial projections at all), but these “less than one-year plans†are rare. So what's in a two year business plan? There's no hard and fast answer, but typically these documents need to cover each of the following:
• When in the first year do you anticipate break-even?
• What new market will you explore?
• Which marketing campaigns will go into place during Year 1 or Year 2?
• Do you need to bring on staff during that time, and what does the personnel plan look like?
• Do you encounter a new competitor?
• What trends in the recent history of your industry bear on your success in the coming 24 months?
Two year business plans are generally shorter and most concise that standard 5-year documents or bank-ready 3-year plans. They focus on market expansion opportunity by giving an overview of the market and industry, and investigate competitors with regard to their weaknesses for the next 24 month period. Also, if a full financial model is included, an estimate of what Year 3 would look like if you do not intend to exit the business could be prudent, depending on your audience. If you have additional questions about what should go into a two year business plan, or simply want to discuss your business idea with a trained professional, call MasterPlans at 877-453-2011. We have produced more than 8,000 full plans with a great success record and we can help you too.
