Owning your own business is what most people dream about. First and foremost, you will need an idea, and then it’s time to write a business plan.
The following article will briefly outline how to write a business plan for your business and the important points to pay attention to in the process.
The executive summary is the introduction of your idea. This is where you can grab the reader’s attention. Whether you are applying for financing, looking for investors, or simply proposing the idea, it is important that you put all the passion you feel for your company into the executive summary. This is the first part of the plan that someone will read and, perhaps, the only part of the plan that might be read by some. It is important to demonstrate that you have done thorough market research and analysis to prove that your idea will not sink the moment you put it out to float. The mission statement should summarize the major goals and company philosophy and, briefly, the major target market and plans for the future. The executive summary should also describe the company’s product or service, its competitive superiority, and the owners’ and managers’ backgrounds and experiences relative to the business.
Although this section of a business plan is fairly straightforward, it should contain a detailed review of all the different aspects of your business. The plan should allow the reader to fully understand the company and its major components that will allow it to operate, gain an edge over its competition, grow, and succeed for the long-term.
The market analysis is the “bread and butter” of your pitch. If the business does not work on paper, it is unlikely it will work in the real world, and you will be hard pressed to gain financing or investors. This is the section where you should compile all the data you have researched and acquired about the target market and outline in a ‘competitive analysis’ how you will break into the target market and become a competitive rival taking a share of business from other similar type companies. Discuss the market share you aim to achieve and how you can “beat” the competition rather than just “meet’ the competition. Also, prepare a preliminary SWOT analysis (strengths, weaknesses, opportunities, and threats) of your company and how you will be able to capitalize on your company’s strengths and untapped market opportunities, and how you will be able to eventually improve upon your company’s current perceived weaknesses while minimizing the negative effect should external threats materialize.
Essentially, this section should summarize the type of business structure (partnership, C corporation, etc.), various management positions, the roles and duties that each manager will perform, and a short resume of each. Major owners should be identified with their respective percentage of ownership. This is also the section to include any consultants or outsourcing venders that might be used. During the start-up phase, many small businesses will contract with specialized or accredited consultants.
Products or Services
Describe your company’s product or service in as much detail as possible including supply chain management functions, intellectual property owned, and current or future-planned research and development.
Marketing and Sales Strategy
This is one of the most important sections. Businesses with great marketing and sales strategies grow and prosper. Businesses with ineffective marketing strategies “go by the wayside.” A detailed market penetration strategy, which demonstrates how the business intends to enter the market, followed by a growth strategy after the company starts to mature will “woo” potential investors and lenders.
Proforma financial statements are an integral part of any business plan. What will be the company’s projected sales, operating expenses, assets, and liabilities? What will be the company’s cash burn rate, and when will the company start to turn a bottom-line profit? These and other important financial details should be included with appropriate exhibits.
Many times small business owners require on-going consulting advice from industry professionals. Although you might have a love and passion for your businesses and know the technical aspects of your businesses well, it takes a wide diversity of knowledge in the all core functions of a business to make it successful. When this is the case, hire a professional who is well experienced and accredited from a reputable organization such as the Association of Accredited Small Business Consultants (AASBC). The AASBC provides accreditation to small business consultants through a vigorous examination process. It’s important to ensure that the professional you hire comes with such an accreditation.