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Business Plan Tips

Business Plan

A business plan is essential to the long-term success of your business. It's important because it actually serves as a compass for the direction your business will take in the future. Follow these basics to create a solid business plan.

Creating A Business Plan

I. Title Page -  This page should contain the following items, double-spaced, horizontally centered, and positioned just above the center of the page: Business Name, address, telephone number, and owner (s) name (s).

II. Table of Contents - Should list the title of each section of the document  and indicate the page number where each is located. This page is done last, since it requires the entire document as input. It allows the reader to quickly locate specific sections.

III. Theme or Concept - Should be a one-page explanation of what your business will be like and why it will be the best of it's kind. What are the unique qualities that sets your business apart from others who are competing for the same customers.  Example: What market is your business competing for? What does your business do? What quality image will it have? What volume of sales is expected? What customer needs are met? What makes it unique from the competition? In what price range will it compete?

IV. Marketing Plan

A. Target Market

  1. What needs does your business satisfy for the customer?

  2. When and under what circumstances will your customer come to your business?

  3. Describe how often you customer will come.

  4. How large is your target market?

  5. How many actual paying customers will you get from your target market?

  6. Describe your customer. It is important for you to developed a clear, mental picture of your ideal customer by age, sex, income level, education level, geographic location, occupation, leisure interests, buying habits, goals and aspirations.

B. Competition

  1. Who are your competitors?

  2. Why are they successful?

  3. What substitutes are there for your business?

  4. What impact do the substitutes have on your business sales?

  5. What separates you from the competitor?

  6. Why should the customer leave the competitor to choose your business?

  7. what percent of the market share do you expect to get?

C. Location Analysis

  1. Describe your business location and how it will enhance the sale of you product and service.

  2. What advantage do you have at this location?

  3. Is there opportunity for expansion?

  4. What are the neighboring businesses?

  5. Do they compliment or detract from yours?

  6. Are building renovations needed? At what cost?

  7. What is the zoning?

  8. Is the neighborhood stable, changing, improving, deteriorating and how?

  9. How is customer access, parking, etc?

D. Price Determination

Describe the cost of your product compared to the value the customer will see.

  1. How do you compare to the competition?

  2. Why will customers pay your price?

  3. What image will the price project?

  4. What special advantages do your customers get that is included in the price?

  5. Will you offer credit terms?

E. Marketing Approach

  1. What are the preliminary or test market results?

  2. Where will your customers find out about your business?

  3. How will your image be clearly and consistently conveyed to potential customers?

  4. Which media is most suitable, ads, flyers, coupons, radio, etc?

  5. How will you evaluate the effectiveness of each advertising and promotional effort (questionnaires cards, return coupons, etc?)

V. Management Plan

Who will run the business and how will they do it?

A. Management Team

  1. What business management background do you have?

  2. How will that experience help drive your business?

  3. How is the experience of key people related to this type of business?

  4. What legal form (corporation, sole proprietor) will you be?

  5. Who does what? Who reports to whom?

  6. What other recourses are needed and who will provide them?

B. Employee Relation

Describe your methods for hiring, training, and communication with your staff.

  1. What are your personnel needs now? in the future?

  2. What skills will they require?

  3. How will you hire and train?

  4. What salary and benefits will you provide?

  5. How will you communicate wage increases to employees?

  6. What personnel policies will be provided to your employees?

VI. Financial Plan

A description of how your business will be financed and how you will maintain a sound financial condition.

A. Current financial requirements

  1. How much money will be needed for starting your business?

  2. What will be the source of start-up capital (go into debt, equity, etc)?

  3. What business and personal assets will be pledged as collateral?

B. Use of funds

  1. How will the money be spent (working capital, equipment, inventory)?

  2. How will borrowed funds make your business more profitable?

C. Long-range financial strategies

  1. How will you pay back your investors?

  2. What terms of repayment are feasible?

  3. What back-up plan will be used if repayment cannot be accomplished as planned?

D. Financial statements

Required financial statements.

  1. Personal financial statement of owner.

  2. Business start-up costs.

  3. Pro Forma cash flow analysis (expected).

  4. Balance sheet (proposed or actual).

  5. Income statement (proposed or actual).

  6. Capital equipment.

VII. Strategic Plan

It is important to include a description of where you want to be in a few years and how you intend to move towards those goals. This plan should focus on the second through the fifth year and describe strengths within your business, weaknesses, opportunities open to you and your competitors, and threats impending you and your competitors. You should describe strategies that use your strengths to take advantage of opportunities and overcome threats: and strategies to reduce weaknesses and avoid threats to your business. The strategies should identify intermediate goals (yearly) and the marketing, management and financial resources that will be used to accomplish these goals.

Contact us if you need assistance in preparing your business plan.

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