Business planning—your path to success.
A business plan is the roadmap for your business. It answers fundamental questions, such as:
- What is your product?
- Who are your customers?
- How are you going to reach them?
- Is there a market for your product?
- What level of sales do you need, and at what cost, to earn a profit?
- Do you have a backup plan in case your sales unexpectedly drop?
The real value of a business plan is not in the document itself, but in the act of planning, the “researching and thinking about your business in a systematic way,” says SCORE, the “Counselors to America’s Small Business” [link: SCORE website]. “It takes time now, but avoids costly, perhaps disastrous, mistakes later.”
It is not an option
A solid, well-researched business plan is essential if you are applying for a business loan or seeking investors. If you have business partners, the plan will define your agreements. If you have employees, your business plan will help them focus on and commit to long-term success. A business plan is also a valuable tool if you plan to sell your business or have it appraised.
A typical business plan will include:
Executive Summary: Write this last. It summarizes why your business plan will work and highlights your objectives and mission. Keep it short. It has to “sell” the reader on reading the whole business plan.
Company Description: This answers questions on legal establishment, company ownership, company history (for ongoing companies) or start-up plan (for new companies), and company locations and facilities.
Product or Service: Describe what you’re selling. Focus on customer benefits. Include product and service description, competitive comparison, sales literature, sourcing and fulfillment, technology, and future products and services.
Market Analysis: You need to know your market, customer needs, where they are, and how to reach them. This section includes Market Segmentation, Target Market Segment Strategy, Market Needs, Market Trends, Market Growth, Industry Analysis, Industry Participants, Distribution Patterns, Competition and Buying Patterns, and Main Competitors.
Strategy and Implementation: This is where your research will help you be specific. Include management responsibilities with dates and budgets. Make sure you can track results. This section includes information on Strategy, Value Proposition, Competitive Edge, Marketing Strategy, Positioning Statements, Pricing Strategy, Promotion Strategy, Distribution Patterns, Marketing Programs, Sales Strategy, Sales Forecast, Sales Programs, Strategic Alliances, and Milestones.
Web Plan Summary: Include a discussion of your Web site, development costs, operations, and your sales and marketing strategies as they relate to Internet marketing, customer service and sales.
Management Team: Describe the organization and key management team members. Include the organizational structure, any management team gaps, and a personnel plan.
Financial Analysis: Include your projected profit and loss and cash flow tables. Also include important assumptions, key financial indicators, break-even analysis, projected cash flow, projected balance sheet, business ratios, and a long-term plan.
Your business plan will help guide you through the good times and bad. Periodically, freshen up your plan to keep it current and it will continue to serve as a useful roadmap. A business plan can help you achieve your goals, manage your production and finances, promote your business, and most important, keep the doors of your business open.
- Link to Business plan template (SBDC)
- Link to Business plan template (SCORE)
- Link to free sample business plans for various types of businesses
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