How to write a Business Plan

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How to write a Business Plan

How to write a Business Plan

The new entrepreneur is more educated in all areas of business than ever before.  The student understands marketing, finances, opportunities, timing and how to implement.  Success today involves:

  • Motivation
  • Education
  • Innovation
  • Implementation

The new entrepreneur has exchanged GUTS for BRAINS
The collection of the ideas is materialized in the form of a Business Plan.  The business plan takes the abstract and converts it to the concrete.  It gives the developer a structure to understand the business, the industry, the market places, the opportunities, the threats, the barriers and the viability and sustainability, if any, of the proposed venture,
A business plan must be a living document that the entrepreneur develops, and develops, and develops.  Since the market place is so dynamic, the business plan and the strategy developed must be constantly revisited to adjust for the paradigm changes.  Without a business plan the entrepreneur has no concrete direction and increases his/her chances of being blind sided by its competitors.
A business plan allows the user to anticipate problems, instead of  spending time solving problems.  It allows the user to be proactive instead of being reactive to changes. Lenders and venture capitalists require the submission of a business plan for the opportunity to obtain financing. It has been found that most businesses that fail do not have a business plan. It has also been found that over 93% of businesses that are still in existence after 10 years have a detailed up to date business plan. The message in this is clear. If you want to increase the chances of success in your business venture, it is essential that you have a well prepared business plan.
Benefits:

  • It will identify needs and wants of clients and the market place
  • Shows demand for your services
  • Aids in the design of the services that fulfill clients needs
  • Outlines measures for generating cash and helps to project profits/cash
  • Identifies competitors and analyzes the firm’s competitive advantage
  • Identifies your strengths and your weaknesses
  • Outline of a Business Plan
  • Executive Summary
  • Company Summary
  • Services
  • Market Analysis
  • Strategy Summary
  • Management Summary
  • Financial Plan
1. Starting Point
  • Is there a NEED?
  • Understanding the Opportunity
  • What is the Profit Potential and InvestmentCapital
  • Time
  • Risk
2. Will the Profit stream be durable (Sustainable)
  • Competitors
  • Changing Client Preferences
  • Personnel Turnover
3. Pre Start Analysis of a New Business
  • What are the barriers to entry?
  • Cost
  • Distribution Power
  • Service Differentiation
  • Focus

4. Why Go Into Business? No sense unless you can stay there:

  • Safely
  • Service the client
  • Prosper

5. Change Will Occur

  • Can you market the new Service?
  • Is the Service affordable to the Client
  • Is their a CLEARLY VISIBLE Benefit to your Service

6. Users of a Business Plan

  • Used by the Person
  • Used by the Lenders
  • Used by the Clients
  • Used by the Employees

7. Business Plan Objectives

  • Must Look at the Market
    • Present and Future
  • Must Look at the Investment
  • The Plan Must be Market Driven
  • Potential for Profit, Sales Growth and Expansion
  • Plan must demonstrate USER BENEFIT
8. Mission Statement
A clear statement of your company’s long-term mission.  Try to use words that will help direct the growth of your company, but be as concise as possible.
9. Business Concept
Summarize key services, concept or strategy on which your business is based.
10. The Team
  • List CEO and key management by name
  • Include previous accomplishments to show these are people with a record of success
  • Summarize number of years of experience in this field

11. Resource Requirements

  • Technology Requirements
  • Personnel Requirements
  • Resource Requirements
    • financial, distribution, promotion, etc.
  • External Requirements
    • products/services/technology required to be purchased outside company

12. Risks & Rewards

  • Risks
    • Summarize risks of proposed project
  • Addressing Risk
    • Summarize how risks will be addressed
  • Rewards
    • Estimate expected pay-off, particularly if seeking funding

13. Key Issues

  • Near Term
    • Isolate key decisions and issues that need immediate or near-term resolution
  • Long Term
    • Isolate issues needing long-term resolution
  • State consequences of decision postponement
  • If you are seeking funding, state specifics

14. Goals & Objectives

  • 5-Year Goals
    • State specific measurable objectives
    • State Market share objectives
    • State revenue/profitability objectives

Marketing Plan

15. Market Driven Required

  • Show the clear positive responses from clients
  • Plan must project the market reaction
  • Make it Happen

16. Market Analysis

  • Is there a need for me in the Market Place?
  • Why will people come to me for my service?
  • What is my Competitive Advantage?
  • Look outward

17. Industry Analysis

  • SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis
    • Strengths and Weakness of the Company
    • Opportunities and Threats in the market Place
    • Strategic Alliances

18. Market Analysis

  • Who are the Clients?
  • What are the demographics and psychographics
  • Prepare profiles of the potential Client
  • Learn the lifestyle and priorities
  • Who is servicing your potential Client?

19. Marketing Strategy

  • Pricing
  • Promotion
  • Timetable for implementation

20. Market Summary

  • Market Past, Present, & Future
  • Review those changes in market share, leadership, players, market shifts, costs, pricing, or competition that provide the opportunity for your company’s success.

21. Competition

  • Summarize competition
  • Outline your company’s Sustainable Competitive Advantage

22. Opportunities

  • Challenges & Opportunities
    • State client problems, and define the nature of the service opportunities create by those problems

Financial Plan

High-level financial plan that defines financial model, pricing assumptions, and reviews yearly expected sales and profits for the next three years.
23. Financial Plan
  • To Determine if your Business is viable
  • To Determine what capital you need
  • To forecast the financial operation of the Business

24. Financial Statements

  • Income Statement
  • Balance Statement
  • Break Even Analysis
  • Statement of Cash Flow
  • Ratio Analysis
  • Working Capital Needs
  • Financing Needs

25. Assess the Owners/Investors Needs

  • Return on Investment
  • Cash Flow
  • Provide financial forecasts with:
    • Expected
    • Pessimistic
    • Optimistic Results
  • Cashing Out

26. Long Term Affect

  • Integrity
  • Ethics
  • Honesty
  • Testimonials

[1] http://www.exton.com/bic/plan.html
[2] http://www.sba.gov/gopher/Business-Development/Business-Initiatives-Education

2019-08-03T13:06:50+00:00May 9th, 2019|Categories: Business Startup, Ready to go into Business|

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