Friday, July 22, 2011

What Should Be Included in a Business Plan


I have heard on several occasions people ask, Do you know of someone who can write me a business plan? This question mostly comes when they want to seek outside financing and the potential investor or financier has asked for it. They thus rush to an accountant, a lawyer or anybody who can write one. What many entrepreneurs and business owners fail to understand is that by delegating this task to some else they miss out on one of the most valuable lessons they can learn about running their business.

A business plan must be written by you. This is your business and it should detail your strategy for managing resources to start and successfully run your business. (Read on the importance on a business plan here).The value in writing your own business plan lies in the research and evaluation process of the business idea.
Now that you understand the importance of writing your business plan, the question that follows is what should be included in it? What does any potential investor want to see in the business plan?
Though each business plan is unique, all plans should include the following components:
Plan Summary: The summary gives an overview of your business .Lenders will review this section first to decide if they want to read the rest of the plan in detail. Therefore your objective in the plan summary is to highlight the key points of your business and entice the lender to study the game plan further. Although this summary appears at the beginning of your business plan, it should be the last part you write.
The plan summary should have the following points:
  • A brief history of your business or business idea
  • A description of your product or service, with emphasis on its uniqueness, a characterization of the market it will fill and an assessment of the competition.
  • How the product will be made or the service performed
  • A profile of  your management teams credentials  and expertise
  • A summary of financial projections
  • The amount of money you are seeking ,why you need it and how you plan to pay back
Statement of Purpose: Write a brief description of one or two paragraphs stating why you want to start this business and what you hope to achieve with it.
Company and Industry: The goal of this part of the plan is to provide information on your company and to describe the industry.
Product or Service: In this section you describe your product or service more in depth.
Marketing Plan: This section is the key part of your business plan. It comprises two parts: market analysis and market strategies. In market analysis you will show how you plan to turn your idea into a product or service that people will buy. In market strategies you identify your target market and outline how you will find and contact your potential customers.
Advertising and Promotion: Discuss how you will inform customers and potential clients about your product or service.
Management: In this section provide the credentials and expertise of your management. Describe their qualifications and duties.
Sales distribution: Describe how you will sell your product or services.
Manufacturing / Operations: Describe who will make your product or who will provide your service and how they will do it.
Advisory Board: Discuss how they will assist in the running of your business and list if any has invested any money in the company.
Schedule of Activities: Show a schedule outlining steps you will take  and your timetable  over the next three to five years to grow your business.  
Critical risks and Problems: In this section list any potential problem and outline possible ways for dealing with them or minimizing them in such a way that they will not have a detrimental effect on your business.
Financial Information: If you are seeking money, you will describe in this section the amount, type and purpose .Also include information on your company’s current financial status. If your business is new include your personal balance sheet along with a projected three year cash flow.
Financial Statement: Your business plan should include:
  • Projected cash flow statement
  • Projected balance sheet
  • Projected Income statement
In a nutshell: Your business plan should describe:
  • Your company and the industry and its trends
  • Your product or service
  • Your market
  • How your product or service will reach the target market
  • Who will run the business
  • How much money the business needs and what it plans to do with it.
I’d love to hear your comments.
To Your Success!
Patrick
Have you enrolled for the How to Start Your Own Business Successfully’ program? Over a 1,000 entrepreneurs have.
Click on the above link to learn…
  • One of the biggest mistakes entrepreneurs make when trying to figure out the ideal business to start
  • One of the most overlooked strategies – don´t do this and you will NEVER succeed in your business
  • How to find the right funding for your business
  • What strategies you need to do to attract customers and open the gates to a flood of paying customers
  • The secret behind succeeding in your own business
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