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www.motivatedentrepreneur.com Business Plans
Begin by developing a mental vision of your operation as you would like it to run over the next 2-3 years. Then take all your dreams for the future and hopes for success and compare that with reality and the fact that most businesses do not make it past their first few years. In order to prepare a document which is truly realistic and representative of what you see for the future of your operation, you must do market research and detailed financial summaries to paint an accurate picture of your business prospects. Let’s talk a little about different sections in the business plan. The Executive Summary is a short document, 1-3 pages, and it is written after the rest of the business plan is completed. The reason is, this section compiles all the information you are trying to get across throughout the business plan into a condensed time efficient reading. The main purpose of the executive summary is to state the business plan objectives. It is important to show your company’s’ competence – the factors that will make your business successful in a competitive market. The executive summary is incredibly important when pitching your plan to potential investors. Investors spend their time looking at numerous investment opportunities, in order to grab their attention you must develop a short and concise statement of your plan. This allows the investor to become attracted immediately without having to spend his time reading the entire plan. Once they become interested, they then can move on to the rest of the document. Think of the executive summary as a sales tool, you must utilize this tool effectively in order to close the deal and receive funding! The description of the business or the business concept outlines what the business will do and the value it will provide to all relevant constituents. It is the foundation for all follow-on activities. What is your vision of the company presently as well as for its future? Why will you be successful in your business? What is your experience in this business? What will be special about your business? These are questions you should ask when developing your description. Market Analysis is marketing research that yields information about the marketplace. Who exactly is your market? Describe the characteristics of your target market, demographic, geographic, etc... What are the products or services you will offer to satisfy those needs? Market analysis is a regional and neighborhood study of economic, demographic and other factors made to determine supply and demand and current and potential market trends. This area of your plan is incredibly important to understanding your customer base. You always want to provide company information, that is, discuss your business background. Who is the management team and what experience do they have? Discuss the primary responsibilities of the individuals in the management team. This is important because you want the reader to be aware of who is leading the operation, and what their background is. Internally this helps promote respect for those in senior level positions, and investors feel more comfortable having a better understanding of who they are investing in. The next area should focus on marketing and sales activities. What is your Sales Strategy? What are the keys to success in your competitive environment? Sales, or the activity of selling, is an integral part of commercial activity. Mastering sales is considered by many as some sort of persuading "art". What is your Market Strategy? Marketing starts with market research, in which needs and attitudes and competitors' products are assessed, and continues through into advertising, promotion, distribution, and, where applicable, customer servicing and repair, packaging, and sales and distribution. Now we move on to products and services What are the major milestones for your product or service? What are the ongoing efforts regarding your product or service? You need describe your products or services to the reader in a clear manner. Any good plan has a great deal of focus placed on its financial data. Finance addresses the ways in which individuals, business entities and other organizations allocate and use monetary resources over time. What are the funds required and their use? Give a historical financial summary. Give a prospective financial summary, which will include a brief justification for your prospective sales levels. Focus on realistic predictions, investors will dismiss any plan that seems to have inflated numbers. You must do accurate market research in order to offer realistic figures. Putting all these tools together and continually revising your business plan will give you a great advantage. For a more detailed look into developing a business plan, read part two of this article as we discuss implementing an organizational plan. © Copyright 2004-05 by www.motivatedentrepreneur.com |
