A business plan starts with a strategic review of the business which involves discussing Strengths and Weaknesses (internal review) and Opportunities and Threats (external review). It is called a S.W.O.T analysis and helps to set the strategic direction of the business. This is especially important in today’s business environment which is changing at almost warp speed. Every attempt should be made to identify what is happening in the overall environment in general and for the industry of the business in particular.

The strategic analysis is then followed by the financial plan. This starts with a forecast of the Income Statement, then the Balance Sheet, and from those documents flow the financial relationships and cash flow.