HOW TO WRITE AN EFFECTIVE BUSINESS PLAN
HOW TO WRITE AN EFFECTIVE BUSINESS PLAN
Well written business plan are usually 30 – 40 pages in length and include the following sections: Executive Summary, Management Profiles, Business Environment, Marketing, Operations, Financial Section, Risk Analysis and Conclusion.
Executive Summary
The Executive Summary should highlight the contents of your plan in 2 pages. Include the following:
A description of your business including the industry sector, the market you will serve and its legal structure.
How you plan to differentiate your product or service from the competition and a statement of your competitive advantage.
Identify who is involved in the ownership of the business and provide a brief summary of their experience and credentials.
A statement of how much money the owners are investing and how much money you are seeking to borrow. A brief description of how the money is to be used.
Identify how much the owners plan to draw as a salary from the business.
Incorporate key financial indicators including first and second year revenue projections, income projections and cash flow and how long it will take to repay the loan.
The Executive Summary should be the second last section that you write, just before the Conclusion.
Management Profile
The Management Profile section is usually 3 – 4 pages.
It identifies the owners, their backgrounds, experience, areas of expertise and respective roles in the new venture. It will also describe the ownership structure, percentages of each owner and their compensation.
Creating a Board of Advisors is an excellent way to enhance the credibility of your business. List the names, titles, employment, education and expertise of your advisors and state how their presence will benefit your business.
Incorporate a section identifying all of the professional support services that your company plans to utilize including accountants, lawyers, consultants, etc. This demonstrates that you have a network of people who can help you to manage and grow your business.
Also include information about the employees that your business will hire and their respective functions. Identify how many people you will require, their skill sets, their compensation and benefits package and how these people will be trained.
Business Environment
This section is a key section of your plan. It will usually be 7 – 10 pages in length.
It describes your industry: the size of the industry, trends, seasonal factors, opportunities and threats and the long term prospects for the industry.
Provide a description of your product or services and state how you will differentiate your product or service from the competition.
If you are planning to use patents, copyrights or trademarks, include this information.
Identify your competitors.
Discuss the barriers to entry into your industry. How easy would it be for a competitor to duplicate your products or services?
Include the role that technology could play in allowing your competitors to duplicate your products or services.
Marketing Plan
The marketing section of your plan is also another extremely important section. It will often be 7 – 10 pages in length.
Identify your target market including buyer demographics and psychographics. How do they buy, what do they to buy, when do they buy, what motivates them to buy and where do they buy?
Estimate the total size of the geographical market that you will serve.
Describe the trends that could affect your target market including socioeconomic trends, demographic changes and government policies
Summarize the competition. Include how long they have been in business, their share of the market and their financial health. Describe their strengths and weaknesses.
Compare your product or services to the competition in terms of quality, price, service, availability and warranty. What are the one or two things that will make your product or service unique?
Describe the features of your product or service. Features could include quality, price, packaging, service and delivery. Describe the benefits your customers will enjoy by purchasing your products or services.
State the selling price(s) for your product(s) or service(s). How are similar / competitive products and services priced?
Describe how customers will pay for your product or services. Will you extend terms or offer volume discounts?
Explain your distribution plan. What channels will you use to get your product or service to the end user?
Indicate how you will promote or advertise your product or service including mediums and costs. State how much business you expect each method to generate.
Describe the role of collateral marketing materials and your website in generating new customers.
Include a monthly forecast for each product or product line for the first year.
Operations
This section addresses the day to day running of the business. It is usually 2 – 3 pages in length.
It should include a description of the facility required for your business: size, leasehold improvements, lease cost, etc.
Provide a description of the equipment that you plan to purchase or lease in order to operate your business including office equipment and production machinery. Include the costs for installations of telephones, fax, security systems, IT networks, etc.
Discuss the suppliers for your raw materials or resale items. Identify the product costs.
In a manufacturing or distribution environment, describe the manufacturing process, the workflow process and the quality assurance procedures.
State how you will track your inventory and how often.
Address the necessary health and safety training for your employees.
Finance
This section is extremely important to any potential lender. It demonstrates the viability of your business.
Include the following:
Start Up Costs
First Year Revenue Projections by Month
First Year Income Statement by Month
Second Year Income Statement by Month
First Year Cash Flow Statement by Month
Second Year Cash Flow Statement by Month
Opening Day Balance Sheet
Balance Sheet at the end of Year One
Risk Analysis
When starting a business, there are risks. This section demonstrates to potential lenders that you have identified those risks and understand how to minimize those risks.
Examples of risk include:
An increase in the number of competitors
Competitive price reductions
A decrease in the demand for your products or services
Resignations of key employees
An ineffective marketing plan
Injuries to key employees
Health and safety risks to your employees
Supplier strikes, financial difficulties, or shortages of supply
Running out of cash
Environmental risks created by your products or services.
Conclusion
This last section allows you to leave the reader with a final and favourable impression. It is normally just one page in length.
In this section, restate: the nature of the business, the amount of the loan you are seeking, what it will be used for, first and second year financial indicators (revenues, operating income and cash flow) and how quickly the loan will be repaid.
You can also include hints at possible plans for the future of the business (expansion, supplementary product lines, additional locations, etc.)
HOW TO WRITE AN EFFECTIVE BUSINESS PLAN - To learn more about this author, visit Mike Pendrith's Website.
Like this article? Share it with your friends
You have decided to start a business and realize that you will have to borrow some money. Financial institutions and third party lenders will want to see a detailed Business Plan before potentially agreeing to any form of loan.
Well written business plan are usually 30 – 40 pages in length and include the following sections: Executive Summary, Management Profiles, Business Environment, Marketing, Operations, Financial Section, Risk Analysis and Conclusion.
Executive Summary
The Executive Summary should highlight the contents of your plan in 2 pages. Include the following:
A description of your business including the industry sector, the market you will serve and its legal structure.
How you plan to differentiate your product or service from the competition and a statement of your competitive advantage.
Identify who is involved in the ownership of the business and provide a brief summary of their experience and credentials.
A statement of how much money the owners are investing and how much money you are seeking to borrow. A brief description of how the money is to be used.
Identify how much the owners plan to draw as a salary from the business.
Incorporate key financial indicators including first and second year revenue projections, income projections and cash flow and how long it will take to repay the loan.
The Executive Summary should be the second last section that you write, just before the Conclusion.
Management Profile
The Management Profile section is usually 3 – 4 pages.
It identifies the owners, their backgrounds, experience, areas of expertise and respective roles in the new venture. It will also describe the ownership structure, percentages of each owner and their compensation.
Creating a Board of Advisors is an excellent way to enhance the credibility of your business. List the names, titles, employment, education and expertise of your advisors and state how their presence will benefit your business.
Incorporate a section identifying all of the professional support services that your company plans to utilize including accountants, lawyers, consultants, etc. This demonstrates that you have a network of people who can help you to manage and grow your business.
Also include information about the employees that your business will hire and their respective functions. Identify how many people you will require, their skill sets, their compensation and benefits package and how these people will be trained.
Business Environment
This section is a key section of your plan. It will usually be 7 – 10 pages in length.
It describes your industry: the size of the industry, trends, seasonal factors, opportunities and threats and the long term prospects for the industry.
Provide a description of your product or services and state how you will differentiate your product or service from the competition.
If you are planning to use patents, copyrights or trademarks, include this information.
Identify your competitors.
Discuss the barriers to entry into your industry. How easy would it be for a competitor to duplicate your products or services?
Include the role that technology could play in allowing your competitors to duplicate your products or services.
Marketing Plan
The marketing section of your plan is also another extremely important section. It will often be 7 – 10 pages in length.
Identify your target market including buyer demographics and psychographics. How do they buy, what do they to buy, when do they buy, what motivates them to buy and where do they buy?
Estimate the total size of the geographical market that you will serve.
Describe the trends that could affect your target market including socioeconomic trends, demographic changes and government policies
Summarize the competition. Include how long they have been in business, their share of the market and their financial health. Describe their strengths and weaknesses.
Compare your product or services to the competition in terms of quality, price, service, availability and warranty. What are the one or two things that will make your product or service unique?
Describe the features of your product or service. Features could include quality, price, packaging, service and delivery. Describe the benefits your customers will enjoy by purchasing your products or services.
State the selling price(s) for your product(s) or service(s). How are similar / competitive products and services priced?
Describe how customers will pay for your product or services. Will you extend terms or offer volume discounts?
Explain your distribution plan. What channels will you use to get your product or service to the end user?
Indicate how you will promote or advertise your product or service including mediums and costs. State how much business you expect each method to generate.
Describe the role of collateral marketing materials and your website in generating new customers.
Include a monthly forecast for each product or product line for the first year.
Operations
This section addresses the day to day running of the business. It is usually 2 – 3 pages in length.
It should include a description of the facility required for your business: size, leasehold improvements, lease cost, etc.
Provide a description of the equipment that you plan to purchase or lease in order to operate your business including office equipment and production machinery. Include the costs for installations of telephones, fax, security systems, IT networks, etc.
Discuss the suppliers for your raw materials or resale items. Identify the product costs.
In a manufacturing or distribution environment, describe the manufacturing process, the workflow process and the quality assurance procedures.
State how you will track your inventory and how often.
Address the necessary health and safety training for your employees.
Finance
This section is extremely important to any potential lender. It demonstrates the viability of your business.
Include the following:
Start Up Costs
First Year Revenue Projections by Month
First Year Income Statement by Month
Second Year Income Statement by Month
First Year Cash Flow Statement by Month
Second Year Cash Flow Statement by Month
Opening Day Balance Sheet
Balance Sheet at the end of Year One
Risk Analysis
When starting a business, there are risks. This section demonstrates to potential lenders that you have identified those risks and understand how to minimize those risks.
Examples of risk include:
An increase in the number of competitors
Competitive price reductions
A decrease in the demand for your products or services
Resignations of key employees
An ineffective marketing plan
Injuries to key employees
Health and safety risks to your employees
Supplier strikes, financial difficulties, or shortages of supply
Running out of cash
Environmental risks created by your products or services.
Conclusion
This last section allows you to leave the reader with a final and favourable impression. It is normally just one page in length.
In this section, restate: the nature of the business, the amount of the loan you are seeking, what it will be used for, first and second year financial indicators (revenues, operating income and cash flow) and how quickly the loan will be repaid.
You can also include hints at possible plans for the future of the business (expansion, supplementary product lines, additional locations, etc.)
HOW TO WRITE AN EFFECTIVE BUSINESS PLAN - To learn more about this author, visit Mike Pendrith's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
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 |
|||
David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
|||
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 |
|||
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 |
|||
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. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
|||
Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Mike's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
|
||
|
||
 |
||
|
| ||
 |
| 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. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Tips For Less Stress Universal Search Improve Web Site Conversions Networking Royally Performance Emotional Intelligence |
|
 | ||
 |
Top 50 Diversion Blogs
Top Diversion Blogs of 2009 | |
 |
Fortune Hunters
CBC Entrepreneur TV | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
| ||||||||||||
| ||||||||||||
|
|
||||||||||||