Business Plans 101: Part 1
Business Plans 101: Part 1
What is a Business Plan?
A business plan is a road map. Its primary purpose is to act as an operating blueprint for your business. Writing one forces the entrepreneur to think through all the issues necessary to build a successful business. Issues that may, at first glance, appear to be mundane and simple, such as describing your business, can become quite complex. Putting words to paper forces you, the business owner, to focus on exactly what you plan to do and how you will do it. Poor planning, or the lack of planning, is one of the primary reasons that businesses fail.
Most entrepreneurs avoid writing a business plan until they are confronted with an unavoidable obstacle: the need for financing. The first question out of an investor’s mouth, whether an angel, venture capitalist or banker, will be, “May I see your business plan?” If you do not have one, the conversation ends there. Regardless of whether you need outside financing, a business plan is an important investment. Once you start your business, you will have little time to reflect and plan—you will be caught up in the day-to-day issues of running your business. Before you start your business is the time to think about the big picture.
What Needs to be Included in a Business Plan?
There are two primary components to a business plan: (1) the narrative or text portion (i.e., the words) and (2) the quantitative or financial portion (i.e., the numbers). The words should clearly explain your business concept, the strategies you plan to implement, the competitive environment and so on. This information will drive the numbers you use when preparing your pro forma financial statements. Below is a detailed description of what should be included in the narrative portion of a business plan. Note: A detailed discussion of the financial portion is included in Part 2 of Business Plans 101.
Part 1. The Narrative
In the narrative portion of your business plan, you need to describe the following:
1. Business Description
- Describe it simply and clearly
- What is the opportunity? In other words, what pain are you solving for paying customers?
- What do customers currently pay to solve that problem?
- Your business model, i.e., source(s) of revenue
2. Products and/or Services Offered
- What are you selling?
- At what price?
- What are the features and benefits of what you are selling?
- What makes it different and desirable?
- Why will customers buy it from you?
- How will products be manufactured or services be provided?
3. Market Analysis
- Industry overview—describe the size of your industry and its unique characteristics
- Define your target markets. What is the size of your target market? What is its growth potential?
- Is the market competitive? If not, why not?
- Who are your customers?
- Why will they buy from you?
- How will you reach your customers, i.e., what is your marketing/sales plan?
4. Location
- Where will your business be located? Why this site? Any zoning issues?
- Do you need to rent space? If so, how much square footage do you need?
- At what cost? Who pays for utilities?
- Are there zoning issues?
- Are renovations or build-out required? If so, who pays?
5. Competition
- Give an overview of the competitive landscape
- What is your competitive advantage?
- Is it defensible, i.e., if it works, will your competitors be able to copy you easily?
- List your five closest competitors and describe:
~ who they are
~ their products/services
~ their strengths and weaknesses
~ how you will be better than them
6. Management
- Why are you (and your team) qualified to build this business?
- What is your (and your team’s) professional background and experience?
- Do you have relevant personal experience in this industry?
- Describe any advisors or other professionals who are assisting you (and their backgrounds)
7. Personnel
- Who will you be hiring? At what pay rate?
- For what positions? Describe their responsibilities
- Who reports to whom?
- What is the staffing/hiring plan? i.e., when will you fill each position?
8. Application and Expected Effect of Investment/Loan
- How much money are you trying to raise?
- What, specifically, will it be used for?
If you cover all of these issues well, the reader should not be left with any obvious questions. The challenge is to have a business plan that tells a coherent story, and to have the numbers support that story.
Business Plans 101 Part 1 - To learn more about this author, visit Diane Tarshis's Website.
Like this article? Share it with your friends
A successful business needs a solid foundation. Most entrepreneurs’ missteps are avoidable through proper planning—taking the time to think through and work through all aspects of developing and running a business. This planning should be formalized by writing a business plan.
What is a Business Plan?
A business plan is a road map. Its primary purpose is to act as an operating blueprint for your business. Writing one forces the entrepreneur to think through all the issues necessary to build a successful business. Issues that may, at first glance, appear to be mundane and simple, such as describing your business, can become quite complex. Putting words to paper forces you, the business owner, to focus on exactly what you plan to do and how you will do it. Poor planning, or the lack of planning, is one of the primary reasons that businesses fail.
Most entrepreneurs avoid writing a business plan until they are confronted with an unavoidable obstacle: the need for financing. The first question out of an investor’s mouth, whether an angel, venture capitalist or banker, will be, “May I see your business plan?” If you do not have one, the conversation ends there. Regardless of whether you need outside financing, a business plan is an important investment. Once you start your business, you will have little time to reflect and plan—you will be caught up in the day-to-day issues of running your business. Before you start your business is the time to think about the big picture.
What Needs to be Included in a Business Plan?
There are two primary components to a business plan: (1) the narrative or text portion (i.e., the words) and (2) the quantitative or financial portion (i.e., the numbers). The words should clearly explain your business concept, the strategies you plan to implement, the competitive environment and so on. This information will drive the numbers you use when preparing your pro forma financial statements. Below is a detailed description of what should be included in the narrative portion of a business plan. Note: A detailed discussion of the financial portion is included in Part 2 of Business Plans 101.
Part 1. The Narrative
In the narrative portion of your business plan, you need to describe the following:
1. Business Description
- Describe it simply and clearly
- What is the opportunity? In other words, what pain are you solving for paying customers?
- What do customers currently pay to solve that problem?
- Your business model, i.e., source(s) of revenue
2. Products and/or Services Offered
- What are you selling?
- At what price?
- What are the features and benefits of what you are selling?
- What makes it different and desirable?
- Why will customers buy it from you?
- How will products be manufactured or services be provided?
3. Market Analysis
- Industry overview—describe the size of your industry and its unique characteristics
- Define your target markets. What is the size of your target market? What is its growth potential?
- Is the market competitive? If not, why not?
- Who are your customers?
- Why will they buy from you?
- How will you reach your customers, i.e., what is your marketing/sales plan?
4. Location
- Where will your business be located? Why this site? Any zoning issues?
- Do you need to rent space? If so, how much square footage do you need?
- At what cost? Who pays for utilities?
- Are there zoning issues?
- Are renovations or build-out required? If so, who pays?
5. Competition
- Give an overview of the competitive landscape
- What is your competitive advantage?
- Is it defensible, i.e., if it works, will your competitors be able to copy you easily?
- List your five closest competitors and describe:
~ who they are
~ their products/services
~ their strengths and weaknesses
~ how you will be better than them
6. Management
- Why are you (and your team) qualified to build this business?
- What is your (and your team’s) professional background and experience?
- Do you have relevant personal experience in this industry?
- Describe any advisors or other professionals who are assisting you (and their backgrounds)
7. Personnel
- Who will you be hiring? At what pay rate?
- For what positions? Describe their responsibilities
- Who reports to whom?
- What is the staffing/hiring plan? i.e., when will you fill each position?
8. Application and Expected Effect of Investment/Loan
- How much money are you trying to raise?
- What, specifically, will it be used for?
If you cover all of these issues well, the reader should not be left with any obvious questions. The challenge is to have a business plan that tells a coherent story, and to have the numbers support that story.
Business Plans 101 Part 1 - To learn more about this author, visit Diane Tarshis's Website.
Like this article? Share it with your friends
| |||
 |
No article feedback found. | ||
|
Leave Your Feedback | ||
|
|||
 PR Planning - back to basics
| |||
| Clients always look for creative ideas but many relationships falter on the rocks of bad campaign planning. Veronica Hannon of Beyond Public Relations (www.beyondpublicrelations.com) examines how the basics of good... |
|||
|
Are Business Plans Obsolete?
| |||
| Women entreprenuers are often reluctant to write a business plan. This article looks at whether or not it's important to have a business plan in a light-hearted way. |
|||
|
Entrepreneurs - Want To Start A Business With The Best Possible Chance Of Success?
| |||
| You are ready to open your business so how do you make sure that it is successful? There are a few things that you need to make sure you do – here they are. |
|||
|
Business Plan Samples
| |||
| Business Plan Samples |
|||
|
Make Time for Balance
| |||
| Balance doesn't just happen. You need to make time for balance just like you do for everything else. Some simple reminders to help you on your road to balance. |
|||
| |||
David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
|||
Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. - Visit Jeff Foster's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
Bernard ReberBack in late 1992, MS Access hit the streets. About that time the company I managed needed new software to handle their growing client base and I decided to try this new product. I had little difficulty writing and adapting a database to suit us and discovered a hidden talent for programming. A business was born. With business studies and 25 years of management experience in three different countries under my belt, I could offer a unique combination of skills and my customers agreed. From these humble beginnings my software 'invoiceit' emerged in 1999 and has since been taken to 49 states (hello Wyoming, won't you join us?), all across Canada and more than 70 other countries. From the very beginning the program included cashbook accounting, the simplest form of keeping financial business records. The Dictionary.com defines 'cashbook' as "A 'book' in which to record money received and paid out". For 'book' substitute 'simple software' and that's what I'm about. Now I have published Simple Accounting, an inexpensive spreadsheet solution which even you can master. For just $14.95 it costs less than a takeout meal! More at http://www.scrambled-card.com/simple_accounting_main.htm - Visit Bernard Reber's Website |
|||
Dr. John OdaJohn Oda Ph.D NLP is a business peak performance expert, an author, and speaker frequently called upon to provide corporate training, workshops and seminars for many companies in the United States. He is an expert in coaching sales and business professionals in overcoming the behaviors and obstacles that may impede their sales results and affect their bottom line. Since 1995, John has created a speaking bureau such topics, which include: time management, sales training, human diversity, leadership programs and etc. He provides companies with a strategic plan to increase their bottom line by over 25 percent yearly. - Visit Dr. John Oda's Website |
|||
Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
 Diane Tarshis (Visit Diane's Website) Diane Tarshis is Principal of Springboard Business Plans, LLC (www.spr ingboardplans.com), and has been writing business plans for more than 10 years. She brings her 20+ years of business experience to each and every business plan, whether for a biofuels producer or a floral shop franchise. Diane holds a degree in finance from the Wharton School and spent several years working on Wall Street. She is also a published author.
|  |
 |
|
|
 |
|
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
 |
 | ||
|
||
 |
||
|
||
|
| ||
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 |
 Free Marketing Plan Template Marketing Effectiveness Make Attitude Your Ally Warning Signs Checklist Woman business success |
|
 | ||
 |
Top 50 Social Media Blogs
Top 50 Social Media Blogs | |
 |
Top 50 Marketing Blogs
Top Blogs To Watch In 2008 | |
| ||
 |
|
|
|
|
||||||||||||||||||
 |
|
|
||||||||||||
