A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.
Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community. When the existing business is to assume a major change or when planning a new venture – a 3 to 5 year business plan is essential.
WHY DO YOU NEED A BUSINESS PLAN?
- To prove that you’re serious about your business. A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business.
- To determine your financial needs. Does your business need to raise capital? How much? The business plan creation process helps you to determine exactly how much capital you need and what you will use it for.
- To better understand your competition. Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages.
- To reduce the risk of pursuing the wrong opportunity. The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.
WHAT SHOULD INCLUDE THE BUSINESS PLAN?
This outline briefly describes each section of the business plan and lists several questions to answer under each section.
This is a one to two page highlight of key ideas/plans in business plan. The summary should interest a reader in the business concept and entice her to read the full plan. Although the Executive Summary appears first in the final document, it will be written last.
DESCRIPTION OF BUSINESS
This section should give a brief history of the business. For start-ups, this section should at least address questions 1-4.
- What is the business name?
- How is the business organized (sole proprietorship, partnership, corporation)?
- Who are the business owners?
- How long has the business been organized?
- What accomplishments have been achieved to date?
DESCRIPTION OF PRODUCT/SERVICE
It is critical to give a clear and concise description of the product made or the services offered by the firm. This section should be written in layperson terms – technical information can be attached in the appendix. You should emphasize the benefit your solution offers to the target market.
- What does the business sell?
- What are the features and benefits of the product or service?
- What solution does the business offer to the marketplace?
- Describe your pricing.
The marketing plan should include a review of industry conditions, a precise definition of the
target market(s), an analysis of competitor advantages and weaknesses and a plan for promoting and selling your product or service.
Describe the state-of-affairs within your industry segment.
- What industry does the business represent?
- What are the industry conditions (expanding, declining, new, mature, etc….)
- How do businesses enter the industry?
Whenever you feel ready to start your own business you may need good and professional advise. Call us, we can help you reach your goals.