A business plan can be used to attract business partners or secure loans and investment capital. A comprehensive plan is especially important if you have a new business because it shows that you have worked out any potential problems and developed a strategic plan of operation. Established companies can also benefit from a business plan. Putting intentions and goals down on paper can be helpful when it comes time to track progress, establish alternatives, and show clients or employees where the business is going.

Developing a business plan takes both time and careful thought, but it is not nearly as difficult as most people think it is. In only five easy steps, you could have a business plan that is respectable enough to present to potential business partners, investors, clients, and employees.

Step One: Create a Cover Sheet and Statement of Purpose

The cover sheet, or title page as it is also known, should be simple and to the point. It should include the name of your business as well as the words “Business Plan”. The statement of purpose should be written on one sheet and immediately follow the cover sheet. Your statement of purpose should also be kept short–about half a page will do. This statement should sound professional and include a short description of your business (what you do, sell, or market), your current business position (age of your company, phase of operation, etc.), a short blurb about principal owners and key employees, and major achievements (patents, prototypes, awards, crucial contracts, focus group results, etc.). If you are applying for a loan or trying to secure capital or a business partner, you should also include a short line describing what you need. For example. The XYZ Company is seeking a short-term loan for $100,000 to purchase inventory, secure premises, and provide adequate working capital.

Step Two: Describe Your Business

The first actual “section” of your business plan should include a more comprehensive description of your business. You can offer a brief account of how your business got started and present an outline of your goals and business strategy. You can also use this section to explain what sort of need your business fills and describe the way it differs from similar businesses. Other information that should be included: biographies of the management team and key personnel, market potential for your product or service, advertising and marketing strategies, and basic operating procedures.

Step Three: Prepare Financial Information

This section is one of the most tedious to prepare, but it is also one of the most important aspects of a good business plan. It should begin with a summary of your financial standing, a three to five year financial forecast, and an estimate of your financial needs. Do not hesitate to go into detail here. This section will help others determine whether or not you have a viable and profitable business idea. You should also provide an income statement that includes revenues, expenses, and profits for a specific time period (usually six months to one year for a new business, broken down by month), a cash flow projection statement that estimates how much money will be coming and going from your business on a monthly basis, and a balance sheet that summarizes business assets, liabilities, and equity.

Step Four: Collect and Organize Supporting Documents

Supporting documents are a must if you are trying to secure a loan or investment capital. Basic documents include tax returns, personal financial statements, business licenses, franchise agreements (if applicable), and necessary purchase agreements. You may also need to submit a loan application, letters of intent from suppliers, and other legal documents supporting statements you have made in the business plan.

Step Five: Proofread and Write the Table of Contents for Your Plan

The final step involves proofreading your work–you don’t want your business plan to be riddled with typos or grammar errors–and creating a table of contents. These tasks can be performed simultaneously. The table of contents should be broken down by section (statement of purpose, business description, financial data, and supporting documents) and include identifying page numbers for important information in each section.

Additional Help

If you need more help getting your business plan together, you can check out one of the many free online courses and workshops designed to guide you through the process. The Massachusetts Institute of Technology offers a 31-page Business Plan Tutorial as well as Seminar in the Nuts and Bolts of Business Plans. The U.S. Small Business Administration also offers a self-paced online training course titled How to Write a Business Plan. Finally, it may be a good idea to explore a few sample business plans on the web. Seeing what others have done may give you the ideas and motivation you need to begin writing your own comprehensive business plan.

Guest post from education writer Karen Schweitzer. Karen is the About.com Guide to Business School. She also writes about pharmacy technician training for PharmacyTechnicianCertification.com.

I remember when I became a student (many years ago). Instead of worrying about what study equipment I need, and how much time I’d spend studying at weekends, the first thing I was interested in was when was I going to get my first car.

I had it in my head that being able to turn up to university in a shiny car would somehow enhance my learning experience. I suspect things are fairly similar with today’s youth, although there are of course some very practical reasons to owning a car whilst studying.

Getting to and from your place of study is perhaps the most urgent reason, but also it makes it easier to carry things around, and travel to and from home if your are studying a little way from your family home.

Buying a new car can be a daunting experience however many cars you have driven in the past, but when you are buying your first ever it can be a very worrying task indeed. So what advice would we give to a student looking for their first car? We have put together what we think are some of the most important things to know.

What Exactly Do You Need?

The first thing you need to get clear in your mind is what sort of vehicle you need. Note the word “need” as opposed to want. When you are a student and on a lower budget you have to be realistic in your choice of vehicle.

You are looking for something sturdy, safe, and affordable. With your first car looks really should be way down on your list of priorities. As much as we would all love to be driving that racy red sports car, your dream car will have to wait.

How Are You Going To Finance The Car?

The chance that financing your first car is going to be the biggest stumbling block is one you will need to overcome. As a youngster obtaining a car loan is going to be very difficult. Most car loan companies will only lend to people who are employed in full time work, and earning above a certain amount of money each year.

One of the main reasons loan companies will not give car loans to students is for their lack of credit history. Whenever you apply for any form of credit, the potential lender will run a credit check on you to check your suitability as a borrower.

As a student you may not have had any credit before, and this will mean very little for lenders to make a judgement on. One good tip for students in this situation is to build up some sort of credit history by taking on a pre-paid student credit card.

These give you the opportunity to build up a financial reputation whilst not risking getting into any debt. This process does take some time, and will not help you finance a car in the short term.

If you do happen to obtain credit, you need to ensure that you are in a position to pay the debt off. If you default on your payments not only will you damage your credit rating but you will also lose your vehicle.

Buy With Cash

If at all possible it is your best option to pay for your first car with cash. That way you are debt free, and if something does happen to go wrong with your car you are not going to be stuck paying off a car loan for a vehicle you no longer have.

Insurance is Expensive

Motor insurance is notoriously expensive for younger drivers. Younger males are most likely to pay the most for their insurance, and it is not unusual for a student’s average yearly premium to run into the thousands of dollars.

The age, engine size, and model of your car will also affect how much you pay for insurance. The bigger and more powerful your car is the more you are going to have to pay to insure it. This is another reason why it is sensible to stick to a modest car when you are starting out.

Consider the Cost of Maintenance

Another issue that students often overlook when buying a vehicle is the cost of maintenance.

There are many relative costs involved with maintaining a car. Not only is there the fuel (which is very costly nowadays), but then you also have to think of replacement tyres, oil, and yearly testing.

There is also the cost of repairs that you might need if something goes mechanically wrong with your car.

When you are budgeting for your first car it is good to try and factor in some sort of monthly maintenance costs to your equations. Have a look at how much different car parts would cost.

Some cars are more expensive to maintain, so doing your research will help to ensure you buy a vehicle that you can afford to look after.

Be Careful Where You Buy

There is no real blueprint for buying a car safely without being ripped off. Some people would argue that you are as likely to get a bad deal from a car dealership as you are if buying a car privately.

You should always try to buy your vehicle from a recognised seller, or somebody whose contact details you can get access to. It is not advisable to buy a car from somebody you just met in a bar!

If you can get some sort of guarantee with the vehicle then you will have a little peace of mind that the car is in fairly sound condition. If you know somebody with experience with cars, or maybe even works in the automotive trade then it is a good idea to take them with you to view the vehicle. They may spot something you would not have looked for.

One of the most important pieces of advice for students buying their first car is to buy with your head and not your heart. It is very easy to fall in love with a car that is way over budget, expensive to insure, and hard to maintain. Buy sensibly and you will save a lot of money, and heartache.

This article was written by Timothy Ng who is a regular personal finance writer and part of the team at CreditCardComparison.com.au a 100% free Australian credit card comparison and application service. Visit the Credit Card Comparison website for more information and resources.

I went for lunch with a friend of mine a few weeks ago. Our conversation usually revolves around the typical 20-something male topics, with a tad bit of business talk. The business talk of course turned to day trading. This friend expressed his deep issues with the hit that this portfolio has taken in the past year. I didn’t have anything mind blowing to add to the discussion because I’m fairly boring with my investments. I do own a small portfolio of stocks, but the majority of my money is in a online savings account. My friend was really stressed out with his complex stock trading system. I on the other hand didn’t show any concern over my simple financial formula.

I often praise online savings accounts here. I don’t want to become a shill for online high interest accounts, but I do believe in getting the message across. You don’t need to create a complex financial system that involves day trading and short selling. A simple financial house is perfectly cool.

A few months ago I shared some important information with you guys about what you need to know about online bank accounts. Today I wanted to share a few extra reasons why you should consider an online savings account:

Unlimited control.

The money is yours. You can invest the money or you can just let the money sit in the bank account for the next 5 years. The control is in your hands. The money is also fairly liquid (aside from the 3-5 day wait). You don’t need to sit around biting your nails hoping that someone will purchase your shares. Don’t you have better things to do?

You can do what I do. I like to organize my money into many sub-accounts for the many different areas of my life (emergency fund, random savings, vacation account). This way I try to be fairly prepared for the many random situations that life can bring us.

Unlimited options.

The one issue with stocks and other investment vehicles is that the money is tied up and there’s always the risk of fluctuation. With your hard earned savings available at your convenience, you can do as you please with your money. You can use the savings to go on a trip, take a course, or to invest it into your side business. I don’t know about you guys, but these options are much more attractive to me.

Less stress.

Can you handle all of the market swings? Will you pull all of your money out of the market? The problem with trading stocks and other investment options is that one must be pretty risk adverse to deal with the ups and downs. It’s easy to smile when everything is running smoothly. The real question is: can you handle the stress of the unknown?

Has the current economic climate got you considering other investment options? Are you still not impressed with the low interest rates that online bank accounts offer?

There are simply things in life that some of us would never spend a dime on. Some readers would never ever pay for cleaning services. On the other hand, some readers couldn’t imagine living without this expense.

Think about it. How many times have you laughed at your friend that collects shoes? How many times have you snickered when your friend upgraded their cell phone? I’ve laughed at people that spend money on car upgrades, when I get my haircut weekly and eat out more often that I should. We all have different (and unique) spending habits.

I wanted to throw out a few items from off the top of my head that I would never pay for:

Banking. Well actually this is something I wouldn’t pay for AGAIN. I’ve paid for it for MANY years. I’ve spent more money on banking then I care to admit. However, some people are cool with paying for banking because of the features that their bank offers. Are you willing to pay for banking services?

Online music. When I’m on the computer I prefer to turn on YouTube and blast random songs. On my iPhone I love to listen to podcasts. I know that it’s fairly inexpensive to download songs off iTunes, but I just can’t bring myself to it.

Personal training. I’ve been working out ever since I can remember. I’ve spent ridiculous amounts of money on supplements, gym memberships, and other gym related stuff. I’ve never spent a penny on personal training. In fact, I actually got my license to be a personal trainer back when I was 18. For me a personal trainer is nothing more than a glorified workout buddy.

These are just a few items from the top of my head that got me thinking about what I wouldn’t spend my money on.

What do you pay for that others probably don’t? What would you never pay for? What are you willing to consistently spend more money on?

Yes, I’m waiting for the first smart ass to write in sex.

I was unable to post a link roundup this weekend because I was away at Niagara Falls for a few days. I had a fun weekend as usual. There was just one thing that caught my eye once again– the sheer amount of people in the casino spending money at all hours of the day.

I wanted to look at a few tips to ensure that you don’t lose your savings at the casino.

Yes I do realize that gambling is a serious problem, which should be treated by a professional. These are just tips for beginners who are just getting into gambling. If you have a serious gambling problem (or if a friend does) then help should be found immediately.

Only spend money you have.

I have a friend that brings a certain amount of money with him to the casino every time. He calls this his “entertainment money.” It’s the money he would normally spend on entertainment on a weekend night. If consciously set aside some money for your entertainment then you won’t get yourself into serious trouble. If you are in credit card debt and at risk of digging yourself deeper into debt, the risk associated with gambling isn’t worth it.

Avoid excessive drinking.

After a few drinks you drop your inhibitions. You make decisions very lightly. That $50 on the blackjack table doesn’t seem so risky anymore. I realize that drinking can be fun and that gambling can be fun. However, when you mix both you’re only setting yourself up for a potential disaster.

Don’t go looking for a payday.

No matter what type of gambling you’re into, you should necessarily view it as a payday. If you enjoy the camaraderie of spending an evening with your friends at the casino then that’s fine. One thing most people had in common this weekend was that they were planning on winning money at the casino. I don’t want to be the bearer of bad news– but if the casino’s weren’t turning a profit, they wouldn’t be around this long.

Those are just my quick thoughts on how you can gamble without losing your savings. I hope I didn’t come off as a preacher. I just want to make a few observations.  Do you guys have anything to add?

A few links from the past week…

What P90X Can Teach You About Becoming a Successful Entrepreneur — I always enjoy me a good motivational post. I personally tried this work out for a few months and I really liked the pump it gave me. I’ve since moved on to different workout programs. I recommend everyone give the workout and the post a look.

How to Pay Off Your Credit Card Debt Fast — As you grow older and want to enjoy what life has to offer, you want to work on paying off your credit card debt ASAP. If you find yourself in credit card debt, don’t worry because there’s lots of help available for you. You can start off by reading this article and checking out the kill debt section here!

What is a Really Good Credit Score? — I know that in the heat of the summer the last thing on your mind is your credit score. I just want everyone to keep in mind that your credit score will become extremely critical to your life within the next few years. Your credit score can affect everything from landing your dream job to get interest rates on mortgages.

Myths and generally accepted axioms extend way past just financial matters. Mainstream knowledge isn’t always the most accurate (trying telling that to the guys spending a $400 on an outfit just to meet girls). Commonly accepted “facts” about dieting, life, love, and fitness, have been circulating through society since the beginning of time. Some of these “facts” are easy to accept, while others come off as a complete myth.

I read a very thought-provoking piece over at GRS lately about money myths and the importance of thinking for yourself. Since I took a look at college personal finance myths a while back, I wanted to open this discussion to other commonly accepted money myths.

Let’s look at some money myths…

You need money to make money.

This one is a classic. You need time to make money. You need ambition to make money. You need motivation to make money. You need great ideas to make money. In 2010 you don’t really need big money to make more money. Sure it helps to have a heavy amount of capital waiting on the side to invest into a McDonald’s franchise. It helps but it isn’t necessary. Don’t let your lack of funds discourage you from pursuing your dreams. Not everyone is going to be born into money.

A bad credit rating is permanent.

This is only true if you don’t change up your financial habits and take responsibility for your finances. Over time you can surely improve your credit rating. How? Well you can start off by consolidating your loans. Then you should strive to pay off  your debt (and make payments on time). Once you get things in order and begin to eliminate your debt, your credit rating will slowly improve. It won’t improve over night, but you also didn’t destroy your credit rating over night.

It’s always better to buy than rent.

There is no one-size-fits-all answer when it comes to renting or buying. There are so many factors at play that I will only list three for the sake of brevity.

1. How stable is your job? You don’t want to be building the home of your dreams on a salary that comes from an uncertain job. Job stability plays a MAJOR role when deciding on whether you should rent or buy.
2. What city do you live in? Depending on the  city you live in, it might be much easier to make your final decision. Many of my readers from the Bay Area have stressed the savings that come from renting as opposed to buying in their community. Every city is different and nobody knows your own city better than YOU.
3. What are your goals in life? Do you want to start a family? Do you want to travel the world? The guy that plans on starting a family soon might want to settle down and buy a home. The 25 year old bachelor might just need a place to store his stuff while he travels the globe.

Check out the ultimate home buying guide for more detailed information on this topic.

Saving money is pointless because you can lose it all one day.

With this logic in place let’s look at other areas of life: Why bother eating healthy? Why bother taking care of yourself? Why hang out with family and loved ones? I certainly agree that life is too short to stress about minor stuff. However, there’s nothing wrong with at least attempting to save 5-10% of your annual salary “just-in-case-shit-happens.”

There are no guarantees in life (aside from taxes and death) so if you’re concerned about losing your money in the future, what will you do when an emergency comes and you need liquid cash to bail you out?

What money myths have I missed?

You’re finally making some decent money, so of course you’ve decided to move out of your parents place and enjoy your life a little. This is what happened to one my friends recently. He got out of his parents place and found his own pad.

I’ve covered the topic of real estate and moving out here in some depth. Let’s now look at some of the hidden costs of moving out.

First and last month’s rent.

This shouldn’t come as a major shock to anyone. Some people do forget to budget for this added expense and it becomes a huge burden. The extra couple of hundred bucks could go a long way when it comes to  buying stuff (hint: Plasma TV or a few bottles of wine) for your new pad.

Food.

Not just your breakfast, lunch, and dinner. Your first grocery bill will likely stun you. This is when you go out and purchase the bare basics. You’d be surprised to find out how much it’s going to cost you to stock up on just condiments and essential cooking supplies– or you could just eat out every meal, which is another cost to itself.

New furniture.

There will be items that will not fit, need to replaced, or that you never had before. You may get sick of your futon and realize that it’s time you got yourself a queen sized bed. You might hate the empty space on the back wall and decide to buy a fish tank. The possibilities are endless. Don’t be naive and ensure that you budget for new furniture for your new place.

Deposits and connection fees.

From the deposit on your new internet router to the connection fees to get your various utilities running. You’re looking at spending a few extra bucks just to connect to the world again.

(Or you could do what my friend recently did. He moved out to a new apartment and decided that he didn’t need the internet or cable. It was probably the best decision for his productivity.)

Bills that your parents have traditionally covered.

There’s going to be bills and fees coming your way that you never thought existed. Leaving your parent’s nest means that you’re all on your own now. This means everything. Something as simple as buying new light bulbs or a new mirror for your bathroom becomes your responsibility. This doesn’t seem like much but over time the small costs and random purchases will add up.

(Note: I intentionally omitted the obvious costs of moving out: paying the movers, monthly rent, owning vs renting, etc.)

Are there any other “hidden” costs of moving out that I missed?

Do you want to ruin your financial life by the age of 30? What a stupid question, right? Well this isn’t something that we plan. It just happens.

Frugal Dad put together a very thought provoking piece not too long ago– 44 Ways To Ruin Your Financial Life By Age 30. I wanted to highlight and comment on some of the points that really resonated with me:

Take out three times as much in student loans as your first year’s salary.

Paying back student loans can set you back a LONG time financially. I understand that a post-secondary education is extremely valuable and often times needed, but there are ways around acquiring massive amounts of debt for college. As honorable as it is to follow your passions and get into a high-reward/low-profit field, but hopefully you can do this without putting yourself deep into debt.

Form a partnership with three old fraternity brothers from college.

Friends and money does NOT work, will NOT work, and should NOT even be attempted. Just because you enjoy drinking with your buddies, it doesn’t mean that you’ll enjoy working with them. I’ve seen moving in together ruin friendships. I can’t imagine what starting a business together would do.

Borrow money from your parents.

Isn’t that what parents are for? Nope. Their job is raise you. A 20-something should never rely on their parents. It’s beneficial to have a supportive family. Money could dramatically alter family relations as you grow through your 20s. Do you really want to rely on your parents financially as you hit 30? Or even worse, do you want your parents to delay their retirement because they gave you money?

Drive like an idiot.

Driving tickets can do some serious damage to your record. Not only will your car insurance rates go up, but you’ll have to pay some pretty hefty fines. The absolute worst part is that these charges will stick to your record for a few years. You’ll be paying higher insurance rates for a few years just because of a mistake you made at a young age.

Marry the wrong person for the wrong reasons.

Don’t marry for money or because you feel stuck. Life is short. Weddings are expensive. Divorces are even more expensive.

Share a mortgage with your boyfriend/girlfriend.

Ouch. This happened to one of my friends last year. Purchased a condo with his long term girlfriend (NOT wife!) and moved in together. Everything was fine… until they broke up. Selling a condo while dealing with a breakup is not easy by any means. Watch out who you share a mortgage with and make sure that you’re always protected. You could also save up more money and buy that new condo on your own, instead of with your casual girlfriend.

Eat out every single meal.

I understand that it’s difficult to cook for one. There’s nothing wrong with preparing small meals or eating left overs for a few days. Eating out 3-4 times a day could obliterate your wallet and eventually your financial situation.

What else do you think can be done to ruin your financial life by the age of 30?

A recent post at Budgets Are Sexy (how rich are you?) passed along a link to an interesting site: Global Rich List.

On the site, you simply type in your annual salary, along with the country you live in, and it shows you where you rank in terms of money earned in the whole world. It’s a cool little tool with an accompanying site with lots of interesting facts about finances from around the world.

A scary little stat on rich people:

The world’s 225 richest people now have a combined wealth of $1 trillion. That’s equal to the combined annual income of the world’s 2.5 billion poorest people

Here’s another scary stat from the website:

$2400 could buy you a second generation High Definition TV OR schooling for an entire generation of school children in an Angolan village.

With these two facts in mind, I wanted to ask the Studenomics’ readers– how rich do you want to be?

Do you want enough money to fulfill you every want and desire?

Do you want that 4,000 square foot home with that BMW on the driveway? Do you want to cruise the world on a luxury ship? Do you want to enjoy the finest dining that this world has to offer? If you fall under this category then that’s completely cool.  A lot of recent college graduates will likely fall under this category.

Do you want a million dollars or do you want million dollar experiences?

I would probably fall under this category. I often lean more towards new experiences than I do money. Sure I want to have enough money to live comfortably and have all of my bills paid on time. I would rather sacrifice owning expensive items (home, clothing, cars, etc.) to have amazing experiences.

Do you want enough money to pay the bills and live a fulfilling life?

I’ve had discussions with readers that simply want to be debt free and spend life with their loved ones. If you know someone that falls under this category, please never judge them. I must admit that I personally am a bit too greedy to fall under this category. I would love to live a debt free life, but I would want a little more out of life as well.

Now I turn it over to you guys– how rich do you want to be?

Congrats to all of the new college grads of 2010! After 4 years of late night study sessions, Doctor’s notes, last minute exam cramming, nervous breakdowns, and never-ending semesters, it’s all finally over! What’s next? Hopefully plenty of riches and good times ahead.

BUT– before you begin the rest of your life, you need to ensure that you don’t make the same mistakes that most college graduates have made:

1. Accepting the first job that comes your way.

I’m not saying this to judge those that work an unrelated job to pay the bills. We all need to pay the bills and I certainly don’t subscribe to the “quit your job” mantra.  I’m referring to the related jobs that:

• a. Pay a high salary for you to perform a job that you hate.
• b. Offer absolutely no growth within the company.

It’s too early in your life to get involved in either of the above options. Making lots of money to perform a job that doesn’t drive you will eventually trickle down and affect other areas of your life. You may find yourself coming home from work miserable or over indulging on the weekends. Is this really the life you want in your 20s?

A job with no growth will only leave you feeling stagnant. Too often do I run into old friends that only want to complain about their work. I don’t know about you, but that’s the last thing I want to talk about (miserable work).

2. Being “too good” for a job.

If a major company offers you a lower salary or a lower position within the company, don’t treat this as an insult. One of my marketing professors once told me that he felt insulted when his Marketing Degree got him a job in a mega corporation…working front line sales. He said he hated it at first, but five years later he found himself with front line experience and lucrative office position. The point here? Never look down on a job because of a low starting salary or starting position.

3. Expensive clothing.

I agree that you should dress for the job you want and not the job that you have. This does not justify spending $200 on a new dress shirt or a couple grand on a new wardrobe. I fully support dressing well and feeling good at all times. I, however, don’t support spending a fortune early on in your working life just to look good in your new Armani suit.

4. Spending too much money.

It’s really tempting to start spending all of your new found money. It really is. I’m fairly guilty of this myself. I love to go on trips and I certainly enjoy my entertainment. I’ll skip the preaching that most personal finance bloggers do with the young crow and I’ll just leave a few links for you guys to check out.

Are 20-somethings not saving money?
Best online bank accounts
Money saving techniques that work and do NOT work
Money management advice for college graduates

What other mistakes do you notice young college graduates making? Please share with us…