Business Plan for Startup Business

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Business Plan for Startup Business

Transcript Of Business Plan for Startup Business

Business Plan for Startup Business
The business plan consists of a narrative and several financial spreadsheets.The narrative template is the body of the business plan. It contains over 150 questions divided into several sections.Work through the sections in any order you like, except for the Executive Summary which should be done last. Skip any questions that do not apply to your type of business.When you are through writing your first draft, you will have a collection of small essays on the various topics of the business plan.Then you will want to edit them into a smooth flowing narrative.
The real value of doing a business plan is not having the finished product in hand; rather, the value lies in the process of research and thinking about your business in a systematic way.The act of planning helps you to think things through thoroughly, study and research when you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later.
This business plan is a generic model suitable for all types of businesses. However, you should modify it to suit your particular circumstances. Before you begin, review the section entitled Refining the Plan, found at the end of the narrative. It suggests emphasizing certain areas depending upon your type of business (manufacturing, retail, service, etc.). It also has tips for fine tuning your plan to make an effective presentation to investors or bankers. If this is why you are writing your plan, then pay particular attention to your writing style.You will be judged by the quality and appearance of your work as well as your ideas. For your guidance, we have included a document entitled Writing Guide.This is an example of an executive summary written in a clear and concise style suitable for this type of document.It typically takes several weeks to complete a good plan. Most of that time is spent in research and re-thinking your ideas and assumptions. But then, that is the value of the process. So make time to do the job properly.Those who do, never regret the effort. And finally, be sure to keep detailed notes on your sources of information and the assumptions underlying your financial data.

Business Plan

OWNERS

Business name: Address: Address Line 2 City, ST 22222

Example Corporation Address Line 1

Telephone: Fax: Email:

222-333-4444 111-222-3333 [email protected]

Table of contents

I.

Table of contents

3

II. Executive summary

3

III. General Company Description

3

IV. Products and services

3

V. Marketing plan

3

VI. Operational Plan

3

VII. Management and organization

3

VIII. Personal financial statement

3

IX. Startup Expenses and Capitalization

3

X. Financial plan

3

XI. Appendices

3

XII. Refining the Plan

3

Executive summary
Write this section last!
We suggest you make it 2 pages or less.
Include everything that you would cover in a 5-minute interview.
Explain the fundamentals of the proposed business: what will your product be, who will be your customers, who are the owners, what do you think the future holds for your business and your industry?
Make it enthusiastic, professional, complete and concise.
If applying for a loan, state clearly how much you want, precisely how you are going to use it, and how the money will make your business more profitable, thereby ensuring repayment.
General Company Description
What business will you be in? What will you do?
Mission Statement: Many companies have a brief mission statement, usually in thirty words or less, explaining their reason for being and their guiding principles. If you want to draft a mission statement, this is a good place to put it in the plan. Followed by:
Company goals and objectives: Goals are destinations — where you want your business to be. Objectives are progress markers along the way to goal achievement. For example, a goal might be to have a healthy, successful company that is a leader in customer service and has a loyal customer following. Objectives might be annual sales targets and some specific measures of customer satisfaction.
Business philosophy:What is important to you in business?
To whom will you market your products? Your target market? (State it briefly here - you will do a more thorough explanation in the Marketing section).
Describe your industry. Is it a growth industry? What changes do you foresee in your industry, short term and long term? How will your company be poised to take advantage of them?
Your most important company strengths and core competencies: What factors will make the company succeed? What do you think your major competitive strengths will be? What background experience, skills, and strengths do you personally bring to this new venture?
Legal form of ownership: Sole Proprietor, Partnership, Corporation, Limited Liability Corporation (LLC)? Why have you selected this form?

Products and services
Describe in depth your products and/or services (technical specifications, drawings, photos, sales brochures, and other bulky items belong in the Appendix).
What factors will give you competitive advantages or disadvantages? For example, level of quality or unique or proprietary features.
What are the pricing, fee or leasing structures of your products and/or services?
Marketing plan
Notes on preparation:
Market research - Why?
No matter how good your product and your service, the venture cannot succeed without effective marketing.And this begins with careful, systematic research. It is very dangerous to simply assume that you already know about your intended market.You need to do market research to make sure they are on track. Use the business planning process as your opportunity to uncover data and question your marketing efforts.Your time will be well spent.
Market research - How?
There are 2 kinds of market research: primary and secondary.
Secondary research means using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles.This type of information is available in public libraries, industry associations, chambers of commerce, vendors who sell to your industry, government agencies (Commerce Dept. and state and local development agencies), and the SBA Business Information Centers and One Stop Capital Shops.
Start with your local library. Most librarians are pleased to guide you through their business data collection.You will be amazed at what is there.There are more online sources than you could possibly use.A good way to start is at the SBA site, http://www.sba.gov/; click the Outside Resources button for a great collection of resource links.Your Chamber of Commerce has good information on the local area.Trade associations and trade publications often have excellent industry specific data.
Primary market research means gathering your own data. For example, you could do your own traffic count at a proposed location, use the yellow pages to identify competitors, and do surveys or focus group interviews to learn about consumer preferences. Professional market research can be very costly, but there are many books out that show small business owners how to do effective research by themselves.
In your marketing plan, be as specific as possible; give statistics and numbers and sources.The marketing plan will be the basis, later on, of the all-important sales projection.

The Marketing Plan:

Economics
Facts about your industry: What is the total size of your market? What percent share of the market will you have? (This is important only if you think you will be a major factor in the market.) Current demand in target market Trends in target market - growth trends, trends in consumer preferences, and trends in product development. Growth potential and opportunity for a business of your size

What barriers to entry do you face in entering this market with your new company? typical ones are: High capital costs High production costs High marketing costs Consumer acceptance/brand recognition Training/skills Unique technology/patents Unions Shipping costs Tariff barriers/quotas

Some

And of course, how will you overcome the barriers?

How could the following affect your company? Change in technology Government regulations Changing economy Change in your industry
Product

In the Products/Services section, you described your products and services as YOU see them. Now describe them from your CUSTOMER’S point of view.
Features and Benefits
List all your major products or services. For each product/service: Describe the most important features.That is, what will the product do for the customer? What is special about it? Now, for each produce/service, describe its benefits.That is, what will the product do for the customer? Note the difference between features and benefits, and think about them. For example, a house gives shelter and lasts a long time, is made with certain materials and to a certain design; those are its features. Its benefits include pride of ownership, financial security, providing for the family, inclusion in a neighborhood.You build features into your product so you can sell the benefits.

What after-sale services will be given? For example: delivery, warranty, service contracts, support, follow up, or refund policy.
Customers
Identify your targeted customers, their characteristics, and their geographic locations; i.e., demographics.
The description will be completely different depending on whether you plan to sell to other businesses or directly to consumers. If you sell a consumer product, but sell it through a channel of distributors, wholesalers and retailers, then you must carefully analyze both the end consumer and the middlemen businesses to whom you sell.
You may well have more than one customer group. Identify the most important groups. Then, for each consumer group, construct what is called a demographic profile: Age Gender Location Income level Social class/occupation Education Other (specific to your industry) Other (specific to your industry)
For business customers, the demographic factors might be: Industry (or portion of an industry) Location Size of firm Quality/technology/price preferences Other (specific to your industry) Other (specific to your industry)
Competition
What products and companies will compete with you?
List your major competitors: Names & addresses Will they compete with you in across the board, or just for certain products, certain customers, or in certain locations?
Will you have important indirect competitors? (For example, video rental stores compete with theaters, though they are different types of business.)
How will your products/services compare with the competition?

Use the table called Competitive Analysis, below to compare your company with your three most important competitors. In the first column are key competitive factors. Since these vary from one industry to another, you may want to customize the list of factors.
In the cell labeled “Me”, state how you honestly think you will likely stack up in customers’ minds.Then check whether you think this factor will be a strength of a weakness for you. Sometimes it is hard to analyze our own weaknesses.Try to be very honest here. Better yet, get some disinterested strangers to assess you.This can be a real eye-opener.And remember that you cannot be all things to all people. In fact, trying to be so, causes many business failures because it scatters and dilutes your efforts.You want an honest assessment of your firm’s strong and weak points.
Now analyze each major competitor. In a few words, state how you think they compare. In the final column, estimate the importance of each competitive factor to the customer. 1 = critical; 5 = not very important. Table 1: Competitive Analysis Factor Me Strength Weakness Competitor A Competitor B Competitor C Importance to Customer Products
Price
Quality

Selection Service Reliability Stability Expertise Company Reputation

Location Appearance Sales Method Credit Policies Advertising
IndustryProductsBusinessProductPlan