business plan format

business plan format

Business Plan Format

1. Introduction

To write an introduction, the objective is to set the stage for the reader. Make sure to let the reader know you have read this business plan and have a complete understanding of the company, and you have been asked to write this document in order to assist the company to help raise capital, assist in making future business decisions, and as a guide for the company’s employees. This is a brief summary of the purpose of writing this business plan. After this stated the purpose, and explain how it is going to result in what the company wants. This is a real important part of your introduction, since a good portion of the reason companies do not write business plans is because of the difficulty in seeing the direct and indirect results of decisions. You must clear up for the company how decisions to make changes in the firm can be translated directly into decision economics, and large scale changes can be translated to global company affect in a positive way. Get this point across and you will minimize the time it will take for the company to see the results and ideas in your business plan, and maximize their understanding of the relationship between decisions and economics. This is generally known as the game theory principle, and is very sound when applied to business decision, and it will increase the chance of the plan being successful, and being kept for a length of time and used as a reference point for the future. Finally, express your desire to see the positive transition of the company as a result of your planning and be the company’s guide to interpret the affects of economic decisions and their relationship to the company’s future.

2. Executive Summary

So what sort of things should you actually mention? Like I said, it should be a condensed version of your business plan. But don’t condense it so much that people will be better off reading your plan instead. A good thing to do might be to write a sentence saying what your purpose, your company is and why you have decided to start it. Then talk about what you will offer to your customers; try to sound appealing and make them feel like they need your product. Tell them how you will promote your product and your brand; evidence of thought into promotion gives investors an idea of some of the long-term decisions that might not have been directly mentioned in your plan. Then talk about where you will find the money to fund this operation. Up to now, you have told the story of your product. Then talk about the actual business side of things; who will be doing what, major success factors and core values. Then conclude with what your goals are regarding the business and sum it all up with your expected or ideal results and projected growth. A good thing to do is brainstorm the things that you hear people saying about why their business might be successful, it can give you a better idea about how you will actually achieve success.

The executive summary is the most important part of a business plan. Chances are, MT is just about the only person who will read your entire business plan. Usually, it’s all MT has time to read, so it better be good. This is your best chance of convincing MT to invest in your business, thus it could be the only thing you get to put your input on. This part of the business plan is also essential if you are presenting your plan to potential investors. They will use your executive summary to decide whether or not they want to continue to read your plan, meet with you or else just consider you a waste of their time. But it should not only be written for these people; it’s a really good guideline for you too. Ideally, this section should be written last, after all other sections have been considered and the rest of the plan has been well researched and thought out. You should have a clear understanding of what you would like to present, and your topic sentences, unlike mine, should be clear and to the point. Consider this to be a condensed version of your business plan. It should be concise and by no means boring. Try to keep it to one page, most people these days have short attention spans and don’t enjoy reading on the computer for too long. As a hint to those of you who are into word limits; the page on the link provided should fit 500 words. This is your time to shine, do not fail to impress.

3. Business Description

Now you must explain your company’s new future free from its existing problems. This can be done in a few sentences and the important points can be detailed in a flow transition to the next company description section. A future has been secured and the plan is to spend the next two years developing a product and home installation method for a water distiller that may be used by all homeowners. With this new method, the next job is to illustrate our focus upon the company and its main goals, stating that we aspire to be the industry leader and set new standards in purity and consumer convenience. This point will bring us to the relay of new company image and branding, as well as the change in products offered which is critical to the success and will be detailed in the market analysis. This entire visual can be portrayed in a timeline fashion moving step by step from a new method of installing the older product to a new product and home installation. Communicate your pursuing concept of company image and branding.

Next, there should be an explanation of why you believe the industry you are entering is attractive. This does not mean what you find great about the industry (though this may be true). What this means is convincing anyone reading this business plan why the industry is attractive for entry. This could be done with a general statement at the beginning followed by listing a few industry factors with industry analysis facts that support these factors. An explanation about the water industry will be found next under target market and market analysis. It is apparent that the distilled water industry is a niche market compared to the convenience of tap water and the cost of a water cooler coupled with the purchase and delivery of 5-gallon water jugs. Although 5-gallon cooler bottles are the main competitor, this water is not always distilled, is less pure, and has to be handled in an unconventional and heavy manner. With the increasing knowledge about water safety and diseases causing impurities in water, people are concerned about what they are drinking and are moving away from tap water. This type of water is also purchased in 1, 2.5, and 1-gallon sizes; Distilled Water on Wheels will offer these sizes and more at a competitive cost to these non-distilled bottled water products. This niche market is attractive given the smaller number of competitors in this specific line of water, its increasing demand, and ease of market entry with a feasible start-up and overhead costs. Industry analysis done here shows that the minimalist business entry terms are that the business is easy to get into and make headway, two critical business points. Business analysis also shows that although a niche market is smaller, there is a higher potential for increased growth rate based on demand. High and low entry barriers suggest that the only key point in this endeavor shall be heavy promotion and the repeat sales shall increase without a great effort due to customer satisfaction and product need. This industry has sustainable revenue with little risk of company survival. A SWOT analysis will detail industry specifics.

Business description should begin with a brief description of the industry. For anyone reading this business plan, we plan to open a Distilled Water Wagon in the Greater Asheville area. We decided on putting a distilled water filling station in a mobile unit to provide an alternative that is accessible for businesses to ensure a consistent supply of water that do not have the ability to purchase and store a large amount of water. The unit will also be helpful to individuals that do not want to make the initial investment of purchasing water containers. This concept will eliminate the burden of having to transport and handle the water that is needed to be brought to places such as a community pool, camping site, or any function that does not have access to a water line. We will be servicing Buncombe, Haywood, Henderson, and Madison counties.

4. Marketing and Sales Strategy

An incentive will be deployed with the ability for affiliates to earn a commission from referral sales by helping spread the word and build awareness of the solution. As the ultimate end users are seniors, the technology is not tailored for them and there is a potential to have their grandchildren research and arrange the purchase for them. The sales strategy will be an inside direct sales approach by targeting the daughters and granddaughters of seniors, where we attempt to build personal relationships with them and spread the old-fashioned concept of word of mouth. This will involve trade shows and possibly sponsored events or seminars for children of seniors with a guest speaker discussing issues on aging parents. This is a long-term strategy as it may be several years before there is full market penetration, and at that point, we plan to review or revise the marketing and sales strategy to take advantage of the latest technology trends.

The big opportunity in this industry is Bert and Barb’s ability to take this solution around the world as they work remotely and travel frequently. The solution is highly portable and provides them with a means to earn a living as they are retired and only work when they are looking to fund some travel or a major purchase. This provides an exciting sales strategy where they will begin using the solution themselves as they travel and report their success to other seniors, encouraging them to try the same solution. This involves creating multiple case studies and using them as success stories in efforts to lend credibility to the solution.

As there has been no preceding competition, we would need to undertake a few marketing activities to begin with the concept and continue to have consistent efforts and innovation in the marketing and sales promotion strategy. We aim to use the following strategies and develop marketing using the internet to reach prospective clients and the target market. The strategy is solution-specific and focuses on developing alliances with B2B small to mid-sized companies that share the same target market and plan to bundle or co-brand the solution with those vendors who will be able to provide a significant volume of sales. Internet marketing will be the focus aimed at building awareness of the BibaSalon brand where there will be limited activity on using it as a channel to directly obtain sales, as it is not a solution that can be instantly purchased and used.

5. Financial Projections

Step one is now complete, you know where you want to be, and have a good idea of how you will get there. This gives us forecasting information to perform an internal and external audit on the firm’s various functions, in order to construct a strategy that is feasible.

The second factor to note is that the higher your market share, the stronger the competitive edge, and the more best cost provider relative to your products, the greater the profits. The key is whether this higher profit can be returned to investors in the form of a higher stock price. Pricing your products in order to achieve this, or using the price-quality method will be easily assessable using a price/cost margin. With two equations: (Price-Cost) x Quantity = Profit and (Profit/Quantity) x 100 = Return on Investment, you can build a pricing structure and estimate the impact it will have on profitability and investor return.

The most important factor to acknowledge is whether your strategy will work. In other words, to be in the position you have previously stated, will you have a competitive edge in your market, and will whatever you are doing result in a higher relative market share. Former chief executive of GKN, David Lees, has a very useful approach to strategy. He suggests that you imagine two newspaper articles being written. The first would be in 3-5 years’ time, reporting your success. The second would be written if you were to fail at your previous achievements. Now cut these out and keep them. This is a quick and easy strat-test for your long and short-term objectives.

A first step in considering a new business is to sit down and think hard about where you want to go with it, and where you will be in 3-5 years’ time. This is your mission. Following this, you must consider what are the long and short-term objectives that will enable you to reach your mission. At this point, you can either work on a simple analysis using a SWOT (Strengths, Weaknesses, Opportunities, Threats) to break down the financial factors and competitive position, or proceed directly to the critical success factors.

Why bother with financial projections for your business? Well, the simple answer is that it provides a realistic view of where you are going, where you could end up, and everything in between. It is the framework for a detailed plan. If the business is to go in the right direction, these are the questions that need to be answered. After all, it is the bottom line that really matters.