We’ve discussed what types of business entities exist and what you can do to protect the business name and logos you have chosen. Today we’ll discuss something a little closer to the part where you get to do the work you want to. That thing is the business plan.
Why Make a Business Plan?
Business owners write up business plans for many and various reasons. For some, a business plan is needed to attract investors. For others, a business plan is for themselves; it is a roadmap to help guide them through the decisions they’ll need to make.
Whatever the purpose for its creation, a business plan is essentially what its name says. It is a plan for the operation of a business, written by the business owner, with some forecasting of what money and expenses the business expects over a term of one to five years.
What Goes Into a Business Plan?
Business plans, no matter the industry, tend to follow a similar outline. Those using the plan for themselves may decide to omit a section if it doesn’t fit how they are using the plan.
Summary
Obviously, this section will be written last. It sums up your business plan for someone who wants to get the big ideas without diving into the tiny details just yet.
This is the first part of your plan someone deciding whether you are worth giving money to will see, so you want it to sell the idea of your business. What problems are you solving for customers? What is it that you do better than anyone else? What makes your business special? These are the answers you want to give someone reading the summary of your business plan, because this is the point where they’ll decide whether to keep reading or to toss the plan into the “Round File”.
Owners building their plan for themselves can also benefit from the summary section. Do you really want to have to head to the detail sections every time you pick the thing up to remind you of goals and expectations. This is where you put those things front and center so you don’t forget them.
Opportunity
This section expands on the question of “what does your business do?” This is the section where you add details about the specific products and services you offer to your client and what makes the way you offer it special. Maybe you’ve hired a five-star chef for your new restaurant. Maybe you used to be the specialist in appeals for a law firm and you’re heading out on your own. Whatever it is you do and whatever it is you do best, this is where you list it.
Investor-seekers, this is the section that tells people with money why you are the one they should give it to, rather than your competitors. People who feel better having a plan to follow, this is where you get your focus out there so that if you’re expanding, you know what people are going to associate with you and whether the new thing fits your business’s image. This material will also come in handy when you start to market your business, because it already answers the customer’s question about what makes you special.
Market Analysis
This is where information about what market you are entering goes. Who is your target market? What are the trends in that market? What needs does your market have that you can fill?
Here you analyze where your customers are, how to get them, and how to get your product to them.
It is also the time to be honest with yourself. Who are your competitors? How do you stack up to them? Can you compete with them? What makes you special in comparison with them?
Execution
This talks about your location, your technology, your equipment, and what you need to do to hit the ground. This is also where you’ll talk about what numbers will show you that you’re on the right track, or if you need to make a change.
Investor-types will want to see this information to get a good idea on how quickly you might turn a profit and pay them back. Planner-types, this will be where you write out how you’ll know that you’re making good progress toward your goals. If you’re not seeing that progress it might be time to make a change to either the timeframe of a goal or to the plan for how to meet that goal.
Management Summary
Who are you and what makes you special? This is the part where you get to talk about the team running the business and what you bring to the table. Tell the world about the time you won that huge award in your field, discuss how you had the best sales at your old company. To paraphrase Men In Black, this is where you put out how you’ve pulled together the best of the best of the best, with honors. Make your team shine.
Financial Plan
Here’s the part that many first-time business owners will likely find the most difficult. This is the bit where you do research about consumer spending in your field and guess how much money you’ll make this year.
As you adjust your plan later and get an eye for how your sales are moving, this will get easy. At first though, you’ll want to get your hands on as much data as you can that talks about spending.
Later on, this will include information like your profit-loss statements and cash flow statements for past years. At the start, it’s going to have your best educated guess at how much money you’ll need to borrow to get started and how long it will take you to get running and get that loan paid back.
Different Plans for Different Folks
Like I said before, business plans vary depending on industry and on what purpose the business owner intends to put them to. I can help you decide what information needs to go into your plan and make it into something you can keep on hand and refer to when a big decision is coming. Send me your information and I’ll get in touch with you about sitting down to discuss your plans and how to make them happen. Don’t wait until an investor or a bank wants to see your plan to write it, write it for you so you’ll have it. You’ll sell your plan better if you know it anyway.
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