Before you decide to write your business plan, you must have considered the following questions and points:
1. Have I identified a problem to solve?
2. What idea do I have to solve the problem?
3. Does the problem I am solving align with my passion?
4. Am I ready to start a business? You must make up your mind to start a business while helping people affected with the problem
5. Am I prepared for what is on the entrepreneurial path? Be determined to continue irrespective of what you see on your path. It does not mean that failure cannot come in one business if it is not an area of your passion but you must continue to search for another area of passion where you will put your effort. Remember the “Law of holes” that “if you find yourself in one, stop digging and find somewhere else”
6. Stay focused and avoid distractions in the form of competitors’ readiness to pull you down or laughs from people watching if your business will succeed or not. Keep going.
After you have resolved these in your mind, then, you can sit down and put your thoughts on paper which will eventually develop into your business plan.
This is the first page of your business plan with the information such as your business name, address, location, telephone and email of the owner, and website of the business.
TABLE OF CONTENT
This will contain executive summary, company overview, products and services, marketing plan, operational plan, management team etc, and the pages.
It is advisable to write this section last, and it should not be more than two pages. It should contain the fundamentals of the proposed business such as your products and services, value proposition, competitive advantage etc.
Here, you will discuss your company by describing if it is a registered business or not, legal form of ownership and reason for selection, the business you will be in, location, vision, mission statement, goals and objectives, core values, briefly who you will sell your products to, industry description and growth, positioning and competitive advantage, strengths, core competencies, success factors, background experience and skills that you bring personally to the business.
Each of these calls for in-depth discussion if you are writing an MBA standard and award winning business plan.
Now, you can see that you’ve got a real work to do.
Firstly, you must develop your vision and mission statement. This will be the backbone of your business. If it is not well structured, investors might not look at your business plan again. So, make sure you do it well.
Then, what are your core values?- professionalism, integrity, accountability, quality customer service, teamwork etc.
At this stage, you might have a clue of who you want to sell your products, but if not, do not worry. You will do real work when you get to target market demography and psychography.
You may decide to omit the industry description and growth and move it to industry and market analysis section, but a brief on your positioning and competitive advantage over your competitors must be mentioned.
Make sure you describe your strengths and core competencies such as skills, experience in the business, great team etc. This may be part of your success factors.
The next chapter in the business plan is “Products and Services”
Here, you will describe in detail the services you will offer to your customers as well as the products that you will develop.
Do not include any drawing, photos, brochures, and technical specifications here. They belong to the “Appendices”
Make sure you include those factors such as quality, uniqueness and proprietary features that will give your company competitive advantages and disadvantages in this section.
Also, do not forget to include pricing, fee and leasing structures for your products and services.
The next chapter is where many people used to give up because of its technicality and professionalism. It is called “Marketing Plan”
In our society or country, most businesses have already made solutions before they start looking for problems to solve that suit their solutions. It does not work that way. The first step is to look for the problem and then provide a human-design centred solution that solves the problem.
Start by identifying the problem, then:
– Conduct a market research (read more about it)
– Do your analysis to determine your target market
– Find your target market characteristics through demography, psychography and ethnography
– Segment your markets and decide on which one to compete (make it small initially)
– Describe your ideal customer characteristics ( ideal customer profiling)
– Differentiate your offering i.e what is your competitive advantage?
– Discuss your market mix
– Discuss your strategy in terms of :
- Target market
- Place or proposed location
- Distribution channels
– Here, you will attach some numbers to your sales plan by carrying out a sales forecast on a spreadsheet that will project your month-to-month sales.
The next chapter is “Operational Plan”
- Start by stating the location and explaining the daily operation of the business, equipment, people, processes, and environment.
- Production: techniques, costs, quality control, customer service, inventory control and product development.
- Location: Describe the qualities you will need in a location, type of location, type of building, amount of space, zoning, , power & utilities, accessibility, parking arrangement and proximity to types of transportation, any need for construction or remodelling of structure or rent (include cost), business hours.
- Legal environment: Licensing requirements, permits, health & workplace regulations, Special regulations covering your industry or profession, building code requirement, insurance coverage, trademarks, copyrights, patents (pending, existing or purchased)
- Personnel: Number of employees, type of labor (skilled, unskilled or professional), here and how to find the right employee, quality of existing staff, pay structure, training methods & requirements, ho does which task, schedules & written procedures, job description for employees, any intention to use contract workers with employees etc
- Inventory: any inventory to keep, average value in stock, rate of turnover and comparism with industry averages, seasonal build-ups, lead time for ordering, any need to sell on credit or not, credit policy, credit worthiness of new applicants and confirmation, terms of credit to customers & discount, cost of credit extension etc
- Management of account receivable
- Management of account payable
The next chapter is “Management ”
Here, you will include who will manage the business on a day-to-day basis, the experience and special competency the person brings to the business, organizational chart and the positions, and resume of your management team.
The next chapter is “organization “
You may need to include your board of directors, management advisory board, attorney, accountant, insurance agent, bankers, consultants, mentors and key advisors.
The next chapter is “Startup and Capitalization”
Here, you will include the expenses you incurred before starting of the business and your plan in getting sufficient fund.