Creating a Business Plan For Your Business
Every business will benefit from a written business plan. It will help provide direction and revaluation. if you are considering investors, a business plan is a must.
Where do you start?
Before you can start a business plan you need to research. You must know your company, your product, and the market. It’s your responsibility to know everything you can about your business and the market that you’re entering into. The internet has made it easier to research markets and your competition.
Why are you writing the business plan?
Is it for yourself or is it for others? This will determine the style of the writing.
There should be a title page with a table of contents depending on how long the business plan is.
Let’s review the parts of the business plan.
Although the executive summary is first on the list it is actually written last. It is a summary of the other parts of the business plan. The executive summary summarizes the key elements of the entire business plan and is the first thing anyone looking at your business plan. It is important that you spend time with this section, first impressions matter.
This should be a concise description that includes information such as
The company itself.
The mission of the company. What are you trying to achieve? What is the goal of your company?
The management of your company.
The products and services that your company offers.
How your company will offer and advantage over your competitors.
What are the projected sales targets?
Describe the financing of your company. Are you bootstrapping it or will you need financial help.
The company profile will provide information about the business itself. This section will describe the business.
Some information you might want to cover in this section include,
The history of the company.
The products and services that you are offering.
Your target market.
Buyer personas. Describe who will buy your product. This needs to be researched. Just because you have an idea for a product does not mean people will buy it.
Do you have a prototype. Have you tested the market? Did you make changes accordingly?
Through research, surveys, and interviews you will know what type of people will want your product and where you will find them. Your research will help show why their interested, what are their pain points.
What problem will you solve for them?
By explaining why you care about your business you create an emotional connection with others so that they’ll support your organization going forward.
A’lot of information in the company profile can be placed on the “about page” of your website.
Products and services
What are your Products or services will you be offering.
How will they solve your target markets problem.
What are your competitive advantages?
How are they unique?
How will your product and services differ from what is already out there.
Ownership and management
This area should include the legal structure of the business. Sole proprietor, S Corporation, C Corporation or LLC?
Management positions are noted. D
Describe managers and their roles, key employee positions, and how each will be compensated.
What experience does that person need to bring to the business?
Include brief resumés.
What external help will you need. Will you be using an advisory board, lawyers, accountants and consultants
The operating plan outlines the requirements of your business to run on a day to day basis. This area should include information on the,
The physical address including square footage and pricing.
Special permits or licensing that is needed.
Legal factors you need to consider? For example permits, licenses, health codes.
The equipment needed
Supply chain of your company.
How you products are produced.
What is involved in producing these products from start to finish
What can influence production
How you would handle large orders
Inventory that you have
Staff that is needed, their duties and how they will be trained.
This section should include market trends, information about your competitors and industry sales.
Is there any statistical data available? If so, include it in your business plan.
Look at trends of your industry.
Trends should include demographics and economic influences.
You will need to describe how your company fits in to the existing market and what makes your product and serves unique. What will be you selling advantage.
Write what you know about the target market.
Show that that there is enough demand for your product or service to make your business sustainable.
You will need an estimation of market size.
How many repeat customers would you expect?
This section should `include any potential problems with distribution such as regulations.
Are there any restrictions and laws that may interfere with business?
Define how you set the price of your products and services.
The competitive analysis includes an assessment of your competition and how your business will compete.
You need to distinguish your business from the competition.
What are your competitors weaknesses?
Who are your competitors?
Visit them, know how many customers they get per day?
What are their daily/monthly sales?
What are their prices?
Explain your method or methods for setting price your price of goods and services.
Can you estimate your planned monthly sales for a year?
Think in terms of number of units sold per day/month.
Keep notes, you will need to be able to explain how you arrived at your sales numbers.
A marketing plan will work better if you have defined goals.
A business plan should include a strategic marketing plan.
This typically includes,
The what and why of your products
Who are your customers?
Where are they?
How many will you get?
How you will reach your customers
How new products will be introduced
How the company will keep current customers
Expansion into new markets
Cross selling and upselling.
You will need to know who your competitors are if you are going to have a successful marketing plan.
Sales and Marketing Plan
This section will include information as to how you will sell to your customers.
What will you use? For example your website, email marketing and social media.
Will you have business cards and brochures.
Will you be going to trade shows.
A detailed explanation of your sales strategy
Will you provide samples and or product demonstrations.
The cost of marketing should be included in the financial section but you can mention the budget
Show how will you service or product differ from what is already on the market.
The financial plan section is the most important section of the business plan if you are seeking outside investors. Investors will only give you money if you have shown that your business is likely to be profitable. It may be a good idea to overestimate expenses and underestimate cash flow to have some room.
The financial plan will help analyze the potential income and determine the company’s success. Will there be a profit and if so what is the expected profit? These records will show how likely you are to get outside investments.
You will need to include information such as,
Personal Financial Statement
Credit card statements
How much money do you have to invest in your business?
How much money do you need to live per month?
How much is your lease? What are your monthly expenses including health insurance, and business subscriptions.
Include any assets you have in your business.
Are you planning on taking courses? All of this adds up. It will help to have these expenses incorporated into your monthly expenses.
How many units are you expecting to sell within a 3 month time frame? How many units will you sell within a year?
How many sales will you need to make a profit, this is referred to as a breakeven analysis.
What are projected revenues?
Projections should be accompanied by a narrative explaining the assumptions used to estimate these numbers.
How did you come up witt these numbers?
What did the research suggest?
Show your work as to how you estimated company income and expenses.
Expenses to profits
Think in terms of a year
If you do not anticipate your expenses, it is more likely that your business will run out of money.
Businesses fail because they can’t pay their bills.
Startup Expenses and Capitalization
How much will it cost to start your business?
How much money do you need to have before your business starts making money?
This section might include information that is relevant to the rest of the business plan such as
Resumes of management
Detailed information about the products including all the market research.
Detailed market research and analysis of competitors.
All expenses that are expected such as rental agreements and equipment needed.
Samples of the marketing materials as well as links
In summary the parts of the business plan are,
- Executive summary which is a summary of your business
- Company description
- Market analysis – research on your industry, market and competitors
- Organization and management
- Service or product
- Marketing and sales
- Funding -How much will you need?
- Financial projections
- Appendix -optional but can help with organization and funding.