Writing a Business Plan - A Brief Guide
Writing a Business Plan - A Brief Guide
Writing a Business Plan - A Brief Guide
One of the most important aspects of a business plan is the financial statement of your plan. Other important aspects of a business plan include a company's mission statement, name of the company, organizational plan, market analysis, competition evaluation, and company goals.
The financial section is usually at the end of your business plan. This is the section that will determine how marketable your business idea will be, and how likely investors are willing to commit their financial future to it. The financial statement of a business plan contains a variety of elements. The most important elements of this section of your business plan are the income statement, the cash flow projection, and the balance sheet. Along with this you will want to include a brief explanation or analysis of all three of these statements.
In your financial statement part of your business plan, you will include expenses that will fall under one of two categories. These two categories are called start-up expenses and operating expenses. Your start-up costs could include business registration, licensing, and permits. They could also include starting inventory and rent deposits (or down payment on property). Your start-up costs could also include the purchase or rental of operating equipment.
The operational costs of your business include expenses such as employee salaries and benefits, rent or mortgage payments, utility payments, purchase of raw materials, ordering of office supplies, and paying for maintenance. These start-up costs are subject to change as the needs of your business change. That is one reason why these costs are often projected in a business plan over a 3 to 5 year time span.
Another aspect of a business plan includes a scope of the industry that your business will be a part of, and of your business' position within that industry. In this section you will include estimated sales in your industry within the previous two years, and the size of the existing industry that you want to be a part of. Other aspects regarding industry that would be covered in this section are national and economic trends that will affect the industry in the past, present and future. You will also include in this section the overall outlook of this industry. In other words you will determine the likelihood of your success in this industry, and the impact your business will have.
The next aspect of your business plan will include detailed information regarding the demographics of the people who will purchase from your business. Demographics of a group include the age, sex, lifestyle, income level, and education. You would find all the above plus additional information such as what motivates these individuals, how they spend their spare time, and what they do for a living.
In addition, you would need to find out what types of equipment that these people own that would be related to what your company sells. For example, if you sell memory cards for digital cameras, you may want to know how many people in an area have purchased digital cameras. All this information can be obtained by conducting surveys, or from viewing statistics from past market surveys completed.
When you do research regarding the people who may buy from your company you will have documented proof that your business has earning potential. This will be of great value to you when you are looking for funding for your business. Not only that, but also you and anyone else who may be involved in your business will be assured of an income return any investment made. Other research and analysis you need to do for your business will be included in your plan as well.
In order to have a successful business, your plan should include an evaluation of your competition so you can overcome any marketing barriers in the process of starting and running your venture. You will also want to indicate in your business plan how you are going to promote your products or services. In this section of your business plan you will also outline the benefits of each product or service you sell. If you will be selling more than one product or service you will want to give some details regarding each one.
Other sections of your business plan could possibly include your operation and management goals. You will also want to indicate how you are going to organize the structure of your business. These sections will also spell out in brief the various legal aspects of your business, and will describe your business' physical location. You can also include any additional information that you think would convince other professionals that your plan is a workable one.
If the task of creating and organizing the contents of your business plan seems too overwhelming you may want to consult professionals to help you. Either you can hire a professional consultant or you can seek the help of non-profit business organizations located in your area. You can also contact fellow associates who are educated about all aspects of business who will be able to help you.
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