Jul 23, 2022

Writing a Business Plan is Crucial!

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 client’s 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 Investment Capital?
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 there 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