Business Plan

Business Plan
 It is a written description of your business's future, a
document that tells what you plan to do and how you plan
to do it.

 A business plan is also a road map that provides directions

so a business can plan its future and helps it avoid bumps in
the road.

 Your business plan should conform to generally accepted

guidelines regarding form and content.

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1 Components of a
Business Plan
Title Page and Contents
 A business plan should be presented in a binder with a
cover listing the name of the business, the name(s) of the
principal(s), address, phone number, e-mail and website
addresses, and the date.

 A table of contents follows the executive summary or

statement of purpose, so that readers can quickly find the
information or financial data they need.

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Executive Summary
 The executive summary, or statement of purpose,
succinctly encapsulates your reason for writing the
business plan.

 It tells the reader what you want and why, right up front.

 The questions that pertain to your situation should be

addressed here clearly and succinctly.

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Executive Summary
The summary or statement should be no more than half a page in
length and should touch on the following key elements:

 Business concept describes the business, its product, the market it

serves and the business' competitive advantage.

 Financial features include financial highlights, such as sales and

profits.

 Financial requirements state how much capital is needed for

startup or expansion, how it will be used and what collateral is
available.

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Executive Summary
The summary or statement should be no more than half a page in
length and should touch on the following key elements:

 Current business position furnishes relevant information about the

company, its legal form of operation, when it was founded, the
principal owners and key personnel.

 Major achievements points out anything noteworthy, such as

patents, prototypes, important contracts regarding product
development, or results from test marketing that have been
conducted.

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Description of the Business
 The business description usually begins with a short
explanation of the industry.

 Discuss what's going on now as well as the outlook for the

future.

 Do the necessary research.

 Base your observations on reliable data and be sure to

footnote and cite your sources of information when
necessary.
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Description of the Business
When describing your business, state:

 which sector it falls into (wholesale, retail, food service,

manufacturing, hospitality, etc.),

 whether the business is new or established,

 whether the business is a sole proprietorship, partnership,

corporation,

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Description of the Business
When describing your business, state:

 who the business' customers are,

 how big the market is, and

 how the product or service is distributed and marketed.

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Description of the Product or
Service
When describing your product or services:

 Make sure your reader has a clear idea of what you're

talking about.

 Explain how people use your product or service.

 Talk about what makes your product or service different

from others available in the market. Be specific about what
sets your business apart from those of your competitors.

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Description of the Product or
Service
When describing your product or services:

 Then explain how your business will gain a competitive

edge and the factors you think will make it successful.

 Explain why the additional equity or debt will make your

business more profitable. Give hard facts.

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Description of the Product or
Service
Other information to address here is

 description of the experience of the other key people in the

business.

 choice of location

 reasons for selling this particular product.

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Market Analysis
A thorough market analysis will help you define your
prospects as well as help you establish pricing, distribution,
and promotional strategies that will allow your company to be
successful in your competition, both in the short and long
term.

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Market Analysis
1. Define the market in terms of size, demographics,
structure, growth prospects, trends, and sales potential.

2. Determine how often your product or service will be

purchased by your target market.

3. Then figure out the potential annual purchase and figure

out what percentage of this annual sum you either have or
can attain.

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Market Analysis
4. Describe your positioning strategy. How you differentiate
your product or service from that of your competitors and
then determine which market niche to fill is called
"positioning.“

5. Pricing your product or services.

6. Determine distribution including the entire process of

moving the product from the factory to the end user

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Market Analysis
7. promotion strategy should include all the ways you
communicate with your markets to make them aware of
your products or services.

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Competitive Analysis
Purpose of the competitive analysis is to determine:

• the strengths and weaknesses of the competitors within your

market.

• strategies that will provide you with a distinct advantage.

• barriers that can be developed to prevent competition from

entering your market.

• any weaknesses that can be exploited in the product

development cycle.

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Competitive Analysis
 The first step in a competitor analysis is to identify both direct and
indirect competition for your business, both now and in the future.

 Once you've grouped your competitors, start analyzing their

marketing strategies and identifying their vulnerable areas by
examining their strengths and weaknesses.

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Operations and Management
 It is designed to describe how the business functions on a
continuing basis.

 The operations plan highlights the logistics of the organization,

such as the responsibilities of the management team, the tasks
assigned to each division within the company, and capital and
expense requirements related to the operations of the business.

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Financial Components of Your
Business Plan
 After defining the product, market and operations, the next area to
turn your attention to are the three financial statements that form
the backbone of your business plan: the income statement, cash
flow statement, and balance sheet.

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Financial Components of Your
Business Plan
 The income statement is a simple and straightforward report on the
business' cash-generating ability. It is a scorecard on the financial
performance of your business that reflects when sales are made and when
expenses are incurred.

 The cash flow statement is one of the most critical information tools for
your business, since it shows how much cash you'll need to meet
obligations, when you'll require it and where it will come from.

 Balance sheets are used to calculate the net worth of a business or

individual by measuring assets against liabilities.

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Supporting Documents
 In this section, include any other documents that are of interest to
your reader, such as your resume; contracts with suppliers,
customers, or clients, letters of reference, letters of intent, copy of
your lease and any other legal documents, tax returns for the
previous three years, and anything else relevant to your business
plan.

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steps for writing a perfect
business plan
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1. Research, research, research.
 Research and analyze your product, your market and your
objective expertise.
 To write the perfect plan, you must know your company, your
product, your competition and the market intimately.
 it’s your responsibility to know everything you can about your
business and the industry that you’re entering. Read everything
you can about your industry and talk to your audience.

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2. Determine the purpose of your
plan.
 Business plan can serve several different purposes.
 It’s “also a road map that provides directions so a business can
plan its future and helps it avoid bumps in the road.” That’s
important to keep in mind if you’re self-funding or bootstrapping
your business.
 If you want to attract investors, your plan will have a different
purpose and you’ll have to write a plan that targets them so it will
have to be as clear and concise as possible.
 When you define your plan, make sure you have defined these
goals personally as well.

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3. Create a company profile.
 Your company profile includes the history of your organization,
what products or services you offer, your target market and
audience, your resources, how you’re going to solve a problem
and what makes your business unique.
 Company profiles are often found on the company’s official
website and are used to attract possible customers and talent.
 Your profile can be used to describe your company in your
business plan.

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4. Document all aspects of your
business.
 Investors want to make sure that your business is going to make
them money.
 To help with this process, document everything from your
expenses, cash flow and industry projections.
 Also, don’t forget seemingly minor details like your location
strategy and licensing agreements.

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5. Have a strategic marketing plan
in place.
 A great business plan will always include a strategic and
aggressive marketing plan. This typically includes achieving
marketing objectives such as:
• Introducing new products
• Extending or regaining market for existing products
• Entering new territories for the company
• Boosting sales in a particular product, market or price range.
Where will this business come from? Be specific.
• Cross-selling (or bundling) one product with another
• Entering into long-term contracts with desirable clients
• Enhancing manufacturing/product delivery

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5. Have a strategic marketing plan
in place.
 Each marketing objective should have several goals (subsets of
objectives) and tactics for achieving those goals.
 In the objectives section of your marketing plan, you focus on the
‘what’ and the ‘why’ of the marketing tasks for the year ahead. In
the implementation section, you focus on the practical, sweat-and-
calluses areas of who, where, when and how. This is life in the
marketing trenches.
 Your marketing plan needs to have a section in which you allocate
budgets for each activity planned.

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6. Make it adaptable based on
your audience.
 The potential readers of a business plan are a varied bunch,
ranging from bankers and venture capitalists to employees.
 Each type of reader does have certain typical interests.
 If you know these interests up-front, you can be sure to take them
into account when preparing a plan for that particular audience

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7. Explain why you care.
 Whether you’re sharing your plan with an investor, customer or
team member, your plan needs to show that you’re passionate and
dedicated, and you actually care about your business and the plan.
 You could discuss the mistakes that you've learned, list the
problems that you’re hoping to solve, describe your values, and
establish what makes you stand out from the competition.

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Thanks
!
Any questions?

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Sources
✗ https://www.entrepreneur.com/article/247574

✗ https://www.entrepreneur.com/encyclopedia/business-plan

✗ https://www.entrepreneur.com/article/281416

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