Business Plan

 

Creating a business plan is important for the successful development of your business. It is not only about having a plan to show investors, but it is also a rather essential process in your business planning stages. A well-researched business plan may take many weeks to complete.
By taking the time to thoroughly research every aspect of your business and think about the entire business process, you will gain a better grasp on starting your business. It will also help you to avoid critical mistakes down the road. Having a well thought out business plan could be the determining factor of whether your business fails or succeeds.

Pros of a Business Plan Template

A business plan template provides a visual guideline to help you organize your thoughts. As you go through the process of creating the business plan, you can think of concerns and issues that might not have been thought of before if you had not taken the time to create a business plan. Hypothetical situations that could arise in the future can be addressed in your business plan.

Cons of a Business Plan Template

A business plan template might not be the best solution to creating your specific business plan. There may be crucial information that should be included in your plan, which may not be a part of a generic business plan template. You have to make sure that you are putting the facts and figures in all of the right places. Also, you may find that you need several financial spreadsheets that require a lot of math calculations.

Important Tips

1. Stay clear and focused on your specific business plan.
2. Update your business plan regularly.
3. Create a business plan that custom fits the needs of your business.
4. Develop your business plan so that it is suitable to your reader, whether your reader is yourself, your business partner, a potential investor or a banker.

The business plan provided here is a generic template that is suitable for every type of business, though you should modify the plan to suit the needs of your business. It will help guide you through the process of creating your own business plan. You can add to the template, or revise it according to your business needs.
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I. Table of Contents

A table of contents is necessary in a business plan so that each section of the plan can easily be referenced. It is best to start each new section on a new page of your business plan. Using this generic business plan template as an example, the following is its table of contents:
I.  Table of Contents
II. Executive Summary

i. Objectives
ii. Mission
iii. Keys to Success

III. General Business Description

i. Mission Statement
ii. Goals and Objectives
iii. Personal Vision of Growth Potential
iv. Experience, Skills, Strengths
v. Legal Form of Ownership

IV. Products and Services

i. Product and Service Description
ii. Accepted Payment Methods
iii. Method of Distribution
iv. Customer Support and Services
v. Visual Materials

V. Marketing Plan and Sales Strategy

i. Identifying the Target Market
ii. Advertising Your Business
iii. Competitive Market Pricing
iv. Competitors
v. Promotional Budget

VI. Organization and Management

i. Personnel and Responsibilities
ii. Legal Requirements of Business Operation
iii. Suppliers and Inventory
iv. Trademarks, Copyrights and Patents
v. Professional Advisors and Support
vi. Exit Strategy

VII. Personal Financial Statement and Plan

i. Important Assumptions
ii. Break-even Analysis
iii. Key Financial Indicators
iv. Projected Profit and Loss

VIII. Startup Expenses

i. Cost of Licenses and Permits
ii. Legal Fees
iii. Equipment Costs
iii. Start-up Inventory
iv. Cost of Business Development Services
iv. Marketing Costs

IX. Milestones
X. Appendices
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II. Executive Summary

The Executive Summary is probably the most important section of your business plan. This is the section where you want to capture the attention of your readers and compel them to want to know more about your business, so try to make it sound enthusiastic, professional, and thorough. If you are applying for a loan, you should include information about the amount you are requesting, what you will use it for and how the money is going to make your business more profitable to ensure repayment.
This summary should be no more than two pages in length. When writing this section, it helps to think about your business from the perspective of the investor or bank lender. Also, it is much easier to write this section last, after you have completed your business plan.

III. General Business Description

The General Business Description section should give a complete description of the business. At this point, you should have registered a business name and purchased an internet domain name for your website.
In this section, you should include:

• A mission statement for your business describing its purpose.
• A brief overview of the business goals and objectives.
• A personal vision about the growth potential of the business.
• A list of your reliable customers (or potential customers) with a list of backup customers.
• Reasons why you chose to register your business as a Sole Proprietorship, Partnership, S-Corporation, or Limited Liability Corporation.
• Reasons why you believe the company will succeed.

IV. Products and Services

The Products and Services section should make it clear to your reader what you are offering, how much it costs you, and how the customer is going to pay for it. Describe your products and/or services in depth and include technical specifications (if any), as well as visual materials including pictures, catalogues and brochures. If your business sells products, you should include information about any existing or pending trademarks, copyrights, and patents that are associated with your business.
In this section, you should include:

• A description of products and/or services.
• Trademarks, Copyrights and Patents.
• Types of payments that will be accepted such as cash, check, credit cards or COD.
• Methods of selling such as wholesale distribution, mail order catalogs, retail, internet, independent sales representatives, agents and contractual bids.
• Information about customer support, guarantees, warranties, returns, replacements and other product related services.
• Visual materials such as pictures, brochures, catalogs or drawings.

V. Marketing Plan and Sales Strategy

No matter how great your products and services are, it will not succeed without effective marketing. You need to thoroughly research the market to make sure you are on the right track. Analyzing the market plays a necessary role in determining whether or not your business will succeed. If there were no market, there would be no need for your business.
This section should identify your targeted market, your targeted customers and strategies on how you will reach your market. It should also describe the current demand or anticipated market situation of your business and the part your business plays in the market.

Identifying the Target Market

First, you need to determine whether your customers are consumers, wholesalers, retailers or distributors. Create a demographic profile of your targeted customers including information such as age, gender, education, income level and location. Information such as this can be found in newspapers, magazines, trade journals, and census data in places such as a public library or chamber or commerce. Another option is to gather fresh data yourself by implementing surveys and focus-group interviews.

Advertising Your Business

Describe how the targeted market would normally find out about products or services from a business such as your own. Common advertising methods include flyer distribution, business cards, brochures, mail inserts, websites, emails, internet search engines and word of mouth. It also includes media advertisements such as trade magazine advertisements, newspaper advertisements, radio advertisements, television advertisements and signage such as your business sign and advertisements on billboards.
Advertising your business through a website will require you to market your business to the Search Engines in order to have your website ranked high in the search engines. Many businesses use Search Engine Optimization strategies which include writing webpage content with keywords and meta tags to increase their web page rank.

Competitive Market Pricing

The rate of your services and/or cost of your goods will have an effect on the market segment as well as an effect on the targeted customers in that segment. If the market is highly competitive in costs, then you also operate your business in a price competitive manner. Explain how your business can offer competitive rates in the market.

Competitors

It is also an essential part of your business plan to gather information about your current competitors as well as future competitors. Consider the products or services that your competitors are offering and determine if it will have a negative impact on your business. A growing number of new businesses will indicate that the market for your products or services is available.
Include a short paragraph about the competitive advantages of your business as well as its competitive disadvantages. Explain why customers would choose your company over your competitor’s company.

Promotional Budget

It is important to determine your advertising budget before looking into advertising methods. This will save you from wasting time on researching advertising methods that may be out of your budget range.

VI. Organization and Management

This section will describe your business in detail with information such as personnel, legal requirements, suppliers, contractors and a network of advisory support.

Personnel and Responsibilities

In this section, you should include a list of the available positions and a description of the responsibilities that come with each position.

Legal Requirements of Business Operation

Include information regarding licensing, permits, bonding requirements, insurance coverage, and other regulations pertaining to your business.

Suppliers and Inventory

Determine where you are going to get your products or services and where you are going to keep your inventory if you are in the business of selling products.

Professional Advisors and Support

It is also advisable to list a network of professional advisors that can provide support for your business such as a consultant, banker, attorney, accountant, insurance agent and board of directors.

Exit Strategy

An exit strategy is a major part of your business plan. You will want to plan ahead for the future of the business. If the business should succeed, you may decide to build the business, take on a financial partner or sell it outright for a profit. If the business should fail, you may want to sell the business or completely close it.

VII. Personal Financial Statement and Plan

In this section, you will need to create a break-even analysis to find out how much revenue your business has to bring in every month in order to reach the break-even point.
Some of the important financial assumptions that you can use in your calculations are interest rates and tax rates. Also include the projected profit and loss from your business.

VIII. Startup Expenses

In this section, you should include:

• Cost of Licenses and Permits
• Legal Fees
• Equipment Costs
• Start-up Inventory
• Cost of Business Development Services
• Marketing Costs

IX. Milestone Plan

A milestone plan is a vision of progress that should be started or completed by specific dates.

X. Appendices

Include a list of details, studies and visual documents such as:

• brochures, catalogs, flyers, drawings, and other advertising materials,
• market research and demographic studies,
• photos and a map of the location,
• information gathered from magazine or other published writings,
• a detailed list of business equipment,
• copies of leases and contracts,
• a list of assets that can be used as collateral for a loan, and
• other documents that are needed to support your business plan.