An Understanding of What a Business Plan is
Before jumping off and buying properties and inventory, one must have a business plan written down.
A business plan can help you clarify your strategy, identify the resources and steps needed to take in order for your business to bloom. A plan can be seen as a roadmap – it aids your guidance.
A well-written business plan can help:
— determine if your business has a future and if it can make a profit.
— predict if it will sell well.
— determine what type of audience it will appeal to
— convince lenders, investors, and others to fund your business
Look at it like you’re creating a blueprint. With this, a 2 step process is taken.
Step 1: create an idea.
Step 2: implement it.
Your first plan does not have to be complicated – simplicity is key.
An important note to remember; communicate the company’s purpose. Let your clientele and customers know what your company offers services for, and how it benefits them.
An executive summary is a crucial part of your business plan. It basically introduces and summarizes the main features the company holds. It provides an outline of the strategy in which you will use for your business. This is highly important because you have to appeal to the audience whom you want to involve in your company, and by doing so investors can see the potential behind your business without having to read the entire plan.
A few things an executive summary should include:
1. mission statements
2. a sketch of where you are at the moment, and where you want to see your business grow.
3. highlights of your financial status
4. your target market
Your strategy will not remain the same as your company grows. It will evolve and change over time. Your main focus should be on how to retain your clients and how to advertise your service. Ask yourself these marketing questions:
1. Why should they invest in your service?
2. What differentiates your company from the rest?
3. How will your consumer benefit from your business?
The 4 P’s are very prevalent in this section.
Aka the goods, or the service. What you will provide to the consumer. This includes branding, packaging, warranty, quality, etc.
What the consumer pays.
This is revolved around the way you plan on pricing your goods, including wholesale price, bundling, retail price, etc.
Also known as distribution, this is the location where a product is marketed. This includes distribution centers, transportation, warehouses, order processing, etc.
As the title says, it’s how you will promote and advertise your company/business, whether it is through social media, word of mouth, public relations, and direct marketing.
Marketing strategy is longterm. The operational plan is short-term. This is a guiding plan which the business follows so it can reach all its goals and achieve more. In order for any business to be stable in the long run, the operation plan must be updated regularly in order to ensure the stability of the business. This mainly includes details about the people responsible for completing the required actions. It is taken through a day-to-day basis, including:
– transportation (if you are selling merchandise and goods)
– logistics of the business
– legal work (such as if a permit/license required?)
A financial plan lays down numbers and tells you if your business is liable for investors to finance.
This is one of the most important components of a business plan. As Jennifer Spaziano (VP at Accion) “This section is crucial if you’re presenting your plan to potential lenders or investors, but it’s also important if you’re using it in-house as a roadmap to get started and continue to grow.”
The financial plan includes a sales forecast, cash flow statements, balance sheet, profit, and loss statements. This makes it easier for you to make smart financial decisions and stay on track to meet your goals.
A strategy where you identify major competitors by evaluating their actions to determine their strengths and weaknesses. By doing this, you implement effective measures for your company to succeed.
Obtain answers to these questions
- What is their growth rate?
- Are they expanding as a company?
- Who are my top 3 competitors?
- How do they promote their business?
- How can I distinguish my company from the competitors?
Lastly comes the appendices on the entire plan. This helps give the investor/consumer a feel of the product and what the company stands for. Provide facts and emphasize the best accomplishments and most notable achievements of your business.
If any of this interests you, give us a call for a free consultation!