Writing Business Plans…the EssentialsWhen writing business plans, there are multitudes of items that could be included. Each business has unique issues and problems that should be addressed. However, across the board, there are certain common elements that should be included in every business plan. There are many free tools available to the business owner to get started on writing business plans, including free business plan templates from SCORE. Beside the obligatory Executive Summary (one or two pages briefing the contents of your plan, necessary when proving information to financial providers and potential partners), your business plan should include, at a minimum: Industry A description of the industry that you intend to enter, historic trends of the industry and what the outlook is for the industry. Market Who your target market is, the size of the primary target market, market test results, the extent to which you feel you will be able to gain market share and the reasons why, resources for finding information related to your target market, how long it takes to get your product or service to market and the anticipated length of the sales or business cycle. Competition It is essential that you understand your competition. Establish what products or services your competition offers, who their target market is, and what their market share is. Determine the strengths and weaknesses of your competition and how you can use both to your advantage, and consider how long it will be before new competitors enter the market. Products and Services Explain here what services or products your business provides, what needs it fills for the market, and how your product or service is different or similar to the competition. Suppliers and Operations If you provide a product, how will you obtain it?, do external forces control your ability to obtain a product or get it to market, how you will implement your business plan at the outset and how your plan will be executed on an on-going basis, the status of your product development, a description of the production process , what your costs are to develop the product, whether labor is required, the costs of operating the business (large and small), what your start up and operating capital requirements are, and the cost of goods. Marketing Plan Consider your strategy-how will you reach your potential customers? Demonstrate your ability and knowledge about how to get the company's products into the hands of the targeted customers. Consider all advertising forms you plan to use. This includes flyers, newspapers, magazines, radio & TV, Yellow Pages, Internet, etc. You should also include any public relations program, sales/promotional materials (such as brochures and product sheets), package design, trade show efforts, videos, or any plans to use these methods. If trying to secure financing or bring key partners on board, having actual samples of these is an excellent way to show you’re serious, professional and ready to start. Management Team and Key Personnel/Employees Are you operating this business on your own—if so, who will be your key advisors for major items such as legal and accounting? If you will have employees, who are necessary to the success of your operation and what qualifications and attributes must they have? Does the employment market have workers that will be able to fulfill these qualifications? Financial Plan Determine--where will you get the financial resources for your business? Although many that plan on starting a business use their own funds as start-up capital (and for some, it may be necessary), generally using other people’s money is preferable (not family or friends, which falls into the same category as your money). The savvy startup will consider credit, loans and investors. For these, at a minimum you will need to include a current and pro forma balance sheet, an income statement, and a cash flow analysis. Finally, if you are using other people’s money, consider whether the use of that money forces you to give up a certain level of control (and if that is acceptable), whether or not you have to personally guarantee the loan (and to what extent your personal assets can be attached to the debt, if so), and how easy the money you are searching for is to get.
Writing business plans is not easy. It takes work, but the work is well worth it when you are finally able to craft a workable plan…the plan for your success! Done Writing Business Plans?
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