Everything You Need to Write Your Business Plan
WRITING A PROFESSIONAL BUSINESS PLAN
For start-ups, a business plan is absolutely necessary. Most funding sources will not even consider making an investment these days without one. The reasons for this are clear – businesses that take the time to build a solid business plan are more apt to stay on target and spend wisely while money is tight as the business grows. There is plenty of time later for fancy upgrades and improvements; when starting out, it is best to think small and grow large.
Having a formal business plan says a lot about how seriously a company takes its business. For investors, consumers and potential business partners, this means that business leaders recognize the company’s potential for success and are serious about fostering an environment that will help it to grow. Consider these players when developing a business plan for a complete and rounded business approach.
The bottom line of business is to make money. Business plans are designed to help express this purpose in financial and analytic ways, and to show prospective business partners and investors how their money will be spent and when to expect a return on their investment. If convincing investors is a necessary part of the success of your businesses, don’t skimp on this essential element.
Be Clear About What You Have to Offer
Ask yourself: Beyond basic products or services, what are you really selling? Consider this example: Your community probably has several restaurants all selling one fundamental product—food. But each is targeted at a different need or clientele.
One might be a fast food restaurant, another sells pizza, another sells sushi and wraps. All these restaurants sell meals, but they sell them to targeted clientele looking for the unique qualities each has to offer. What they are really selling is a combination of product, value, ambience and brand experience.
When starting a business, be sure to understand what makes your business unique. What needs does your product or service fulfill? What benefits and differentiators will help your business stand out from the crowd?
Identify Your Niche
Creating a niche for your business is essential to success. Often, business owners can identify a niche based on their own market knowledge, but it can also be helpful to conduct a market survey with potential customers to uncover untapped needs. During your research process, identify the following:
Which areas your competitors are already well-established
Which areas are being ignored by your competitors
Potential opportunities for your business
BEFORE YOU START WRITING
Use the following outline to summarize your business planning decisions. Title each section of your written plan as indicated in the outline. Write down, in your own words, answers to the questions listed. Each question can be the start of a new paragraph. If a question does not apply, explain why it does not apply. *Tip: You don’t have to win as Pulitzer Prize here. You don’t have to be a great writer. The readers will care more about what the plan says than how it is written. Write very clear and simple answers that you can come up with to the questions that are listed.
BUSINESS PLAN SUMMARY
Describe your products and services.
Describe the history of your business, if it is an existing business, or how you developed your idea to start a new business.
Describe the legal structure of your business – sole proprietorship, partnership or corporation.
Describe your experience in this business and how it will help you succeed.
Describe your reason for believing the business will succeed.
MARKETING PLAN
Products or Services
What are the features and benefits of your products and services?
How will your product be made or how will your services be provided?
Who will supply the materials for your product?
What future products/services will you offer, and when?
What are the customer’s needs or wants that are being filled?
Distribution
How will your products or services be distributed?
Industry
What is happening in your industry (is it growing, stable, or declining)?
What do you believe the future holds for this industry?
Customers
Who are your customers – what does your customer profile look like?
How many customers will your business have?
What information do you have that supports your decisions about your customers?
What is the growth potential for this business? What is your plan for growth?
What information do you have that supports your decisions about growth?
Competition
Who are your main competitors?
What are their strengths and weaknesses?
Position
What will your market position be?
What is your competitive advantage – why will customers buy from you instead of the competition?
Image and Packaging
What will the image of your business be?
What will your packaging look like (attach samples)?
What do your business cards and promotional material look like (attach samples)?
Where will your business be located, and why did you choose this location (include a sketch of your floor plan)?
Pricing
How did you determine your pricing strategy?
How do your prices compare to the competition?
Marketing Goals
What is your dream – where do you see your business in the next 2 to 5 years?
Example goals:
I want to start a successful business.
I want to expand my existing market share.
I want to add new products/services.
What are your objectives for each of your goals? Why do you think they are realistic, how will they be measured, and when will they be achieved?
Example objectives:
I want to have a 10% profit margin in 12 months.
I will increase sales by 50% in 24 months.
I want to develop one new product/service within 18 months.
Marketing Strategy
What is your promotional plan?
MANAGEMENT DESCRIPTION
If there are employees, how many will you have?
Who will hire, train and supervise them?
What will their duties and qualifications be?
Who will handle which functions in the business?
What will it cost your business for the first two years?
What will your owner draw be for the first two years?
What will your employee salaries be for the first two years?
Who will your lawyer, accountant, insurance agent, and other advisory team members be?
How will you manage your record keeping, finances, and inventory?
What licenses, permits or regulations will affect your business? (Attach copies of licenses, permits, or regulatory forms.)
Will you have to collect and pay sales tax, and if so, how much and for which entity (state or city)?
What types of insurance will you need (Attach bids or copies of policy summary page)?
What types of payments will you accept (cash, check, credit cards, house accounts, etc.)?
What contingency plans have you made for yourself?
What will you do if you become sick or are injured, or in the event of a family or personal emergency that takes away from the business? Who will then take care of the business? How much will it cost?
What will you do if your car breaks down?
What will you do if your day-care provider can’t take care of your kid/s one day, or if your kid/s are too sick to go to school?
What contingency plans have you made for the business?
What will you do if sales are not what you expected? What will you do to increase them?
What will you do if costs are higher than you expected? What will you do to decrease them?
How will you make decisions to continue to stabilize or increase your cash flow and profits?
What will you do if a competitor lowers their prices?
FINANCIAL PLAN
Include a month-by-month cash flow projection for at least the first two full years. Include written assumptions (explanations) supporting your projections.
*If your business starts or the plan starts during a year, the first year projection will be a partial year. There should also be two full years of projection after the partial year.
Include at least two years of financial statements for existing businesses. (If not in business two years, include what is available). Include, if possible, balance sheets and profit and loss statements.
Include your personal financial data: Personal Financial Statement (Assets, Liabilities and Net Worth) and a monthly income and expense statement (your personal financial plan).
ATTACHMENTS
*Attachments should be provided to substantiate your claims in your plan. Always keep copies of the original documents for your files.
Two years of personal income tax returns if requesting a loan.
Two years of business income tax returns.
Credit application (form from the lender) if requesting a loan.
Collateral documents (titles, abstracts, or other proofs of ownership) if requesting a loan.
Lists of assets to be acquired and their costs.
Resumes of yourself and others who will work in the business.
Market studies.
Articles from magazines, newspapers, or the World Wide Web.
Photographs, sketches of your products or floor plan, brochures describing your services.
Copies of leases or other contracts.
Letters of intent from customers to do business with you.
Examples of your brochures, business cards, stationary and other materials.
BUSINESS PLAN WRITING RESOURCES
Here are some resources that will help you write a professional and detailed business plan for little or no cost:
Crown Heights Young Entrepreneurs
Yehuda Berg (718) 487-0100 | ext 3
Baruch College
55 Lexington Avenue Room 2-140
(646)312-4790
Business Solutions Center
Bronx Center
400 East Fordham Road, 7th Fl.
Bronx, NY 10458
(718)960-7910
Brooklyn Center
9 Bond Street, 5th Floor
Brooklyn, NY 11201
(347)296-8021
BOC - Business Outreach Center
81 South Oxford St.
Brooklyn, NY 11217
(718) 624-9115
Score.org
1-800-634-0245
BUSINESS PLAN TEMPLATE
NOTE: Please note that this is one of many templates available. They are generally the same, the most important fact is that they contain useful information that you may not have thought about.
Executive Summary: Summary of all the key points of your business plan – Do this section last. This section shouldn’t be more than 2 pages.
Business Description: Provide an overview about your business idea/concept/ service/ etc.
Value Proposition: What makes your business idea/concept/ service/ etc novel (i.e. makes it better than anything else). This should not be price, as you will have difficulties defending this.
Industry Analysis: What does the industry look like? Are there trends? What do your customers buy, eat, look like, education, income etc. The more detail you have the better your chances of success.
Competition: Who are your competitors? What market share do they have? Are there any other companies, parties, etc that could be competitors. Even if there are no “direct” competitors, there will ALWAYS be some that are close.
Marketing Strategies: How will you get your product into the marketplace? Think of non-conventional (viral marketing) methods that are cheaper than traditional (TV, radio, print) and have a higher impact.
Barriers to Entry: What will stop you from entering the desired market place? Regulations, monopoly, syndication? Also how will you setup your own barriers to entry for other potential entrants into the marketplace?
Distribution Channel: How will you get your product / service to the intended market?
Team Summary: Often this can be the most important part of your business plan as investors want to see who else believes in the idea and the experience of your team in the various areas (technical, business, commercialisation, etc.)
Financial Analysis: Insert all the financial aspects about your product in here. Cash flow, income statements, balance sheet, as well as start-up income required. This is arguably the most important part of your business plan, spend plenty of time on this and be able to justify any assumptions
Critical Success Factors: What needs to be achieved that will enhance chances of success? Also insert the possibility of these things happening
Exit Strategies: How will you (or any investors) exit out of this project (if you want to) and make excellent return or to move onto your next “big idea”?
Future Developments: What are the future plans for your product / service (if any)?
Appendices: Include any additional information here that may not fit into the sections above (quotes, recommendations, statistics, etc)