How to Write a Business Plan

If you are considering starting your own business then your first step in doing so should be to create a business plan. A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. A business plan also contains background information about the company and its owners attempting to reach those business goals. A well-developed business plan can only be beneficial to an inspiring business owner. The business plan should consistently be updated throughout the life of the business in order to establish what’s been done and what needs to be done, along with what works well and what doesn’t work at all.

Here is a breakdown of each specific part of the business plan.

Cover Page & Table of Contents:

  • Lists the names of the owners and their contact information. (emails/phone numbers)
  • Table of Contents contains a list of each specific point that is addressed in the business plan.

Executive Summary:

  • This is a brief overview of your company background, market potential, core competencies, and exit strategies.
  • This is the part of your business plan you’ll present to potential investors and people you will be conducting business with. You’ll want the executive summary to be well thought out, and compelling to spark the audience’s interest.

Company Description:

  • This is a detailed description of the company.
  • This is the part of the business plan that defines what the company stands for, and how it will reach its business goals. It lists the products or services offered and benefits for the consumer.

Industry Analysis:

  • The industry analysis section is an overview of entry barriers, technology factors, and the economic factors that will either enhance or repress your business. It’s the overview of the specific type of industry you are dealing with.

Market Analysis:

  • The market analysis section of the business plan is a thorough examination of your target market.
  • You’ll want to include who you are specifically targeting. (age, income, location, motivation, needs, and wants should all be focused on in this area of the business plan)
  • You’ll want to list projections about the target market such as what portion of your target market will become repeat customers?

Competition:

  • The competition section includes profiles of your current competitors.
  • You’ll want to include competitor’s market share, sales, profits, and competitive advantage.
  • Point out your competitor’s strengths and weaknesses and the possibilities of future competitors.

Marketing & Sales:

  • In this section you must explain what products or services you will provide and how much you will charge.
  • You’ll need to list specific sections on advertising, and marketing and how you will get your product or service out to the consumers.
  • Detailed charts on your projected sales and revenue must be included.

Operations/Management/Organization:

  • This is a list of your product development teams, managers, and workers.
  • A detailed structure of your organization should be included along with who your suppliers and distributors will be.

Development & Milestones:

  • Here you should list achievements of your company and a list of achievements you want to accomplish.
  • Examples of milestones are the signing of significant contracts or receiving an award.

Risks & Contingencies:

  • You should include what you will do in times of adversity such as the loss of a key employee, increasing competition, loss of an important account, and supplier’s failure to meet deadlines.
  • How will you handle the problems that arise in a business environment?

Financial Projections:

  • Costs to start the business, current costs, and future costs should be outlined in detail.
  • Total revenue (current and projected future revenue)
  • A financial strategy to increase revenue and decrease costs should be included.

Here is an example of a “Table of Contents” of a business plan:

Table of Contents

Executive Summary:

  • Business Concept
  • Company
  • Market Potential
  • Management Team
  • Distinct Competencies
  • Required Funding
  • Exit Strategy

Company Description:         

  • Mission Statement
  • Summary of Activity to Date
  • Current Stage in Development
  • Competencies
  • Product or Service
  • Description
  • Benefit to Customer
  • Differences from current offerings
  • Objectives
  • Keys to Success
  • Location

Industry Analysis:

  • Entry Barriers
  • Supply and Distribution
  • Technological Factors
  • Seasonality
  • Economic Influences
  • Regulatory Issues

Market Analysis:         

  • Definition of Overall Market
  • Market Size and Growth
  • Market Trends
  • Market Segments
  • Targeted Segments
  • Customer Characteristics
  • Customer Needs
  • Purchasing Decision Process
  • Service Positioning

Competition:

  • Profiles
  • Competition Market Share
  • Competitive Evaluation
  • Distinct Competitive Advantage
  • Competitive Weaknesses
  • Future Competitors

Marketing and Sales:      

  • Services Offered
  • Pricing
  • Distribution
  • Promotion
  • Advertising
  • Partnerships
  • Discounts and Incentives
  • Current Internet Promotion
  • Sales Force
  • Sales Forecast

Operations:   

  • Product Development
  • Development Team
  • Development Costs
  • Development Risks
  • Quality Assurance
  • Administration
  • Key Suppliers
  • Service Delivery
  • Customer Service and Support

Management and Organization:

  • Management Team
  • Open Positions
  • Key Personnel

Capitalization and Structure:

  • Legal Structure of the Company
  • Deal Structure
  • Exit Strategy

Development and Milestones:

  • Financing Commitments
  • Product/Service Development Milestone
  • QA Testing- Webpage Design
  • Signing of Significant Contracts
  • Achievement of Break-even Performance
  • Expansion

Risks and Contingencies:        

  • Increased Competition
  • Loss of a Key Employee
  • Loss of an important account
  • Supplier’s failure to meet deadlines
  • Regulatory Changes

Financial Projections:

  • Assumptions
  • Costs
  • Financial Resources
  • Financial Strategy

Appendices:

  • Management Resumes
  • Competitive Analysis Reports
  • Any other supporting documents
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