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Business Plan Essentials

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25 views

Business Plan Essentials

Uploaded by

Creww Weet
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BUSINESS PLAN ESSENTIALS

Writing a business plan is THE fundamental starting point for ALL entrepreneurial efforts. It is
thought to be the single most controllable factor relevant to the success or failure of any business.

While creating the Plan takes time and effort, this work has great value for an Entrepreneur. It
forces you to study and research every element of your business and examine your ideas critically,
avoiding costly, perhaps disastrous, mistakes later. The Plan is also an excellent organizing tool,
simplifying and clarifying the goals and strategies of your new venture and serving as an operational
guide for the first months and years.

A well‐written Plan tells the story of your business, clearly demonstrating that there is an
opportunity worth exploiting and explaining, in detail, how you intend to do this. It should be clear,
concise, readable and persuasive. A good Plan will enhance your ability to attract financing and key
employees.

Keep it short. Unless you are proposing a new kind of business or industry that requires lots of
explanation, you can probably cover everything you need to convey in 20 to 30 pages of text, plus
appendices. To great extent, the purpose of your plan determines its length. If you are seeking
millions of dollars in seed capital, greater detail may be needed. If the Plan is solely for internal
purposes, a more abbreviated version should be fine.

Should you be seeking funding, here are some key questions that investors and lenders will
expect to be answered in your Plan. Keep them in mind when writing the Plan.

• Is there sufficient demand for your product or service? You'll need to provide evidence that
there is a customer base for the product or service you want to offer. If the product exists
today, provide market potential data, market share breakdown, sales history and sales
projections for the product/service. If this is a new concept, you'll want to conduct some
market research and present results of surveys, focus groups, or test markets.
•
• Do you have a sustainable competitive advantage? Is your product or the process for
manufacturing your product sufficiently may be unique to be awarded a patent that provides
you with protection from "copy cats" for a maximum of seventeen years. Maybe your
location is protected from allowing additional competition. Or, perhaps you provide your
service in such a way that makes you the cost leader.
•
• Are you being realistic? Although investors and lenders love to back businesses with high
growth potential, they are also skeptical when the projections seem too good to be true. This
is a flag to them that you may be overly optimistic, naive, or worse, deceitful. Make sure you
can back up your projections with reliable data.

While every Plan will be different, according to the nature of the business involved, the
following elements are essential.

The Cover Sheet ‐ his serves at the title page of your Business Plan. It should include:
• Name, address, e‐mail, and phone number of the company
• Name, title, address, phone number of the owners

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•• Date the Plan was prepared and the Copy Number of the Plan

Disclaimer or Confidentiality Agreement ‐ This formally lets the reader know and acknowledge with
a signature that what is being read is confidential and not to be disclosed to others.

Table of Contents
This is the roadmap to your plan and should include a listing of the major sections, subsections,
exhibits, and appendices, with page numbers.

Executive Summary – This is the most important part of the business plan and the most read. It is
usually no more than two pages and should be written after the rest of the plan is completed .

Expend the effort to ensure that this section is articulate and succinct, while still describing the
unique essence of your business. If you don’t capture the reader’s attention here, it is unlikely that
they will read other parts of the plan. The first sentence or paragraph needs to be exciting and
hook the reader, featuring the most compelling aspects of your business opportunity. For example,
“the current market for products targeting senior citizens in $50 billion and growing by 8% a year.

The executive summary is the business plan in miniature. It should be logical, clear, interesting ‐‐
and exciting. A reader should be able to read through it in four or five minutes and understand what
makes your business tick. After reading your executive summary, a reader should be prompted to
say, "So that's what those people are up to."

The Executive Summary should describe:

The Company Objectives


The Company’s legal form of operation
Products and Services to be offered
Overview of the industry
The Target Market
Your Competitive Advantage, including patents, location, etc.
Projected Growth for the Company and the Market
Key Management Team members
Funding Requirements, including a timeline, and details on how the funds will be used.
(An example of an effective Executive Summary is attached.)

Business Description ‐ Mission Statement: Many companies have a brief mission statement, usually
in 30 words or fewer, explaining their reason for being and their guiding principles. If you want to
draft a mission statement, this is a good place for it.

Clearly describe in depth the products and services the business will provide. (If applicable,
reference technical specifications, drawings, or pictures of your products, which are included in the
Appendices.) Use simple terms and avoid industry jargon. Include the features and benefits of the
product or service ‐‐ the solution the business offers to the marketplace ‐‐ the factors that will give
you competitive advantages or disadvantages – and why you can service your chosen market better
than your competition.

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`Marketing Plan and Strategy

Identify your Target Market in terms of demographics, size, structure, growth prospects,
trends and sales potential. Describe the part of the market on which you will focus and why. Report
the market share of the market that you currently have or anticipate. Define the critical needs of
your perceived or existing market. Footnote sources of information.

Explain why customers need and are willing to purchase your offerings. Discuss your pricing
strategy – i.e., whether you will be a low cost provider or value‐added services at a higher price ‐‐‐
and, why. Describe your pricing method ‐‐ cost‐plus, demand, competitive, or markup pricing?

Describe your Distribution Channels and your reason for selecting them.

Explain your Promotion Plan , including your budget for sales and marketing.

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