How to Write A Business Plan
Success in business comes as a result of planning. It does not matter if the business is online or offline you must start with a plan. You have to have a detailed, written plan that shows what the ultimate goal is, the reason for the goal, and each milestone that must be passed in order to reach your goal. Click Here to Read More
A business plan is an operational plan for achieving your goal. Goal setting is the first stage after you have you have defined your basic product, income objectives. YOU HAVE TO HAVE A BUSINESS PLAN to attract investors, obtain financing and hold onto the confidence of your creditors, particularly in times of cash flow shortages.
Your business plan may or may not include a financial proposal is you are seeking outside partners or loans to support your business The business plan is a long range "map" to guide your business to the goal you've set for it. The plan details the what, why, where, how and when, of your business--the success planning of your company. Your financial proposal is a request for money based upon your business plan--your business history and objectives.
So how do you go about setting up a business plan, well its is going to take some time and it is important not to rush this stage. If possible use use a large board and write down your ideas, such as what you are going to sell. You will need to research not only your product but how you are going to promote it and get it to your customers. you also need to set a budget and put in place controls to plot the success or otherwise of your sales campaigns.
Below is a list of areas to consider and as your plan comes together they will form section of your business plan.
- Statement of Purpose
- Business Description
- Market Analysis
- Competition
- Business Location
- Management
- Current Financial Records
- Explanation of Plans For Growth
- Projected Profit & Loss/Operating Figures
- Explanation of Financing for Growth
- Summary of Business & Outlook for The Future
- Listing of Business & personal References
You will eventually need to write up your business plan, so purchase a loose leaf folder and start working on your plan, Transfer your thoughts onto paper and modify them as necessary to come up with a business plan which can act as your operations manual.
Statistically 95 % of businesses fail due to bad planning or management and without a plan by which to operate, no one can manage; and without a direction in which to aim its efforts, no business can attain any real success.
The First Page should be the title of you business, address, and name of owner
The next page is for for your statement purpose. This should be a simple statement of your primary business function, such as: We are a service business engaged in the business of selling business success manuals and other information by mail.
The title of the page should be in all capital letters across the top of the page, centred on your final draft--skip a few lines and write the statement of purpose. This should be direct, clear and short--never more than (2) sentences in length.
Then you should skip a few lines, and from the left hand margin of the paper, write out a sub-heading in all capital letters, such as: EXPLANATION OF PURPOSE.
From, and within this sub-heading you can briefly explain your statement of purpose, such as: Our surveys have found most entrepreneurs to be "sadly" lacking in basic information that will enable them to achieve success. This market is estimated at more than a 100 million persons, with at least half of these people actively "searching" for sources that provide the kind of information they want, and need.
With our business, advertising and publishing experience, it is our goal to capture at least half of this market of information seekers, with our publication. CASH MAKING MAGIC! Our market research indicates we can achieve this goal and realize a profit of $1,000,000 per year within the next 5 years...
The above example is generally the way you should write your"explanation of purpose," and in subtle definition, why you need an explanation. Point to remember: Keep it short. Very few business purpose explanations justify more than a half page long.
The Third page will be reserved for your table of contents or index to the rest of your plan.
In describing your business, it's best to begin where your statement purpose leaves off. Describe your product, the production process, who has responsibility for what, and most importantly, what makes your product or service unique--what gives it an edge in your market. You can briefly summarize your business beginnings, present position and potential for future success, as well.
Next, describe your target market, the buyers you're trying to reach why they need and want or will buy your product and the results of any tests or surveys you may have conducted. Once you've defined your market, go on to explain how you intend to reach that market, how you'll introduce these prospects to your product or service and induce them to buy.
Moving into the next chapter on competition, identify who your competitors are, their weakness and strong points, explain how you intend to capitalize on those weaknesses and match or better the strong points. Talk to as many of your"indirect" competitors as possible those operating in different cities and states.
One of the easiest ways of gathering a lot of useful information about your competitors is by developing a series of survey questions and sending these questionnaires out to each of them. Later on, you might want to compile the answers to these questionnaires into some form of directory or report on this type of business.
The chapter on management should be an elaboration on the people operating the business. Now it might only be you so include a background resume. It's important that you "paint" a strong picture people because the people coming to work for you or investing in your business, will be "investing in these people" as much as your product ideas. Individual tenacity, mature judgment under fire, and innovative problem-solving have "won over" more people than all the AAA Credit Ratings and astronomical sales figures put together.
If you've been in business of any kind scale, the next chapter is a picture of your financial status, a review of your operating costs and income from the business to date. Generally, this is a listing of your profit & loss statements for the six months, plus copies of your business income tax records for each of the previous three years the business has been an entity. If this is first business venture you can ignore this.
The chapter on the explanation of your plans for the future growth of your business is just that, an explanation of how you plan to keep your business growing. A detailed guide of what you're going to do, and how you're going to increase your profits. These plans should show your goals for the coming year, two years, and three years. By breaking your objectives down into annual milestones, your plan will be accepted as more realistic and be more understandable as a part of your ultimate success.
Following this explanation, you'll need to itemize the projected cost and income figures of your three year plan. I'll take a lot of research, an undoubtedly a good deal of erasing, but it's very important that you list these figures based upon thorough investigation. You may have to adjust some of your plans downward, but once you've got these two chapters on paper, your whole business plan will fall into line and begin to make sense. You'll have a precise "map" of where you're headed, how much it's going to cost, when you can expect to start making money, and how much.
Knowing what its going to cost leads on to how you are going to fund your business, either self funding or you will need to consider other sources such as:
Make a list of friends you can approach, and perhaps induce to put up some money as silent partners. Make a list of those people you might be able to sell as stockholders in your company. In many cases you can sell up to $300,000 worth of stock on a "private issue" basis without filing papers with the Securities and Exchange Commission. Check with a corporate or tax attorney in your area for more details. Make a list of relatives and friends that might help you with an outright loan to furnish money for the development of your business.
Then search out and make a list of venture capital organizations. Visit the Small Business Administration office in your area and pick up the loan application papers they have. Read them, study them, and even fill them out on a preliminary basis, and finally, check the costs, determine which business publications would be best to advertise in, if you were to advertise for a partner or investor, and write an ad you'd want to use if you did decide to advertise for monetary help.
In conclusion, write out a brief, overall summary of your business, when the business was started, the purpose of the business, what makes your business different, how you're going to gain a profitable share of the market, and your expected success during the coming 5 years.
The last page of your business plan is a "courtesy page" listing the names, addresses and phone numbers of personal and business references, persons who have known you closely for the past five years or longer and companies or firms you've had business or credit dealings with during the past five years.
There is much more to having a home based business than meet the eye and if you are looking for more information or advice I will help you.
David Ogden
CEO TheInterBiz LLC
