business plan sample

business plan sample

Developing a Successful Business Plan

1. Executive Summary

Most business plans do not include an executive summary using the plan’s mission, that will be covered in the company description. However, if the mission is the creating of a successful business plan to obtain financing, or if seeking venture capital, the business plan can be used to launch a new business initiative within a corporation, the mission can be incorporated into the executive summary.

How to Write the Executive Summary The executive summary contains a description of your business goals and the strategies you will employ to meet them. This section also includes your company’s mission statement.

The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document.

The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest.

2. Company Overview

Last are the goals of the business, what it hopes to achieve in the time it has the plan active. A goal is an achievement toward the vision. This could be simple to complex, with a plan on how to attain the goal. This is something that can always be updated and added knowing it is an achievement toward the vision. The mission and goal is what helps make decisions for the business. All decision making is designed for success in fulfilling the mission and goals of the company.

The next question to answer is what does the business want to accomplish? A vision of the business future is important for setting a clear end goal. This should be a detailed explanation of what the business hopes to be doing in the years to come. Trading Spaces has planned to be a franchise. There will be several locations in various communities and each one will be sponsoring local art whether it be in an art in school program where each piece of art is a prize to a child in an art competition, or hanging artwork from local artisans. The franchise is that each place will be owned by an artist who has the same passion to support local art and there will be a reward system for achieving top quality art in the community. This could be a designed piece of furniture or a mural or perhaps a poem from a student. The reward would have an art auction to sell the art to the supporters for a higher price with hopes of course more art rewards. This can always benefit the company outsourcing and help in the expansion of the franchise.

The company overview details your company in a nutshell. The next speakers are sharing what they wish to do with this business, in addition to why they believe it will be successful. The first is the mission statement. The mission statement is a declaration that articulates a business’s purpose. This statement should be simple and explain what the business is all about, why it exists. The mission statement for Trading Spaces is “A permanent place for temporary art.” This statement is saying that an artist will be given a chance to make art on this planet. Trading Spaces is just a place to inspire that artist so he does not feel as if he is wasting time to make art. He can always come back here to make some art. It is the belief that this is something the world needs, therefore it will be successful. An important thing to know is that the mission statement will be obvious criteria that should be followed when decision making in the business. It could be an initial idea such as the design of a product or something in the setting of the business. When it comes time to make the decision, the mission statement can be reflected and it should help choose the better decision knowing that it follows the mission statement and it will be a positive change for the business for that decision.

3. Market Analysis

Market research is often divided into two categories, primary and secondary. While secondary research is less precise, it generally can produce very helpful information. Primary research can be very useful if the resources are available to conduct the research. Primary research must be carefully conducted to make sure it is meaningful. For example, if I open a small business and interview my 5 friends over the phone, the results are not very meaningful. An effective method of primary research is to sample survey an entire region if resources are available. One method might be to start a retail business and conduct a survey at a local mall. This method will collect data which is representative of patronage from the mall, but not the whole town.

There are several ways to conduct a market analysis. If possible, it is best to make sure the data collected will be representative of the whole region you plan to do business in. For example, if you live in a region of 100,000 homes and plan on starting a restaurant, it is best to survey possible patrons from throughout the region. The next obstacle is finding the resources to conduct a meaningful market analysis. There are libraries and universities which provide free access to professional, peer-reviewed published documents which contain valuable information for a market analysis. Another method is to go to the internet, however many times the internet mostly contains non-peer-reviewed and non-reliable sources of information.

4. Marketing and Sales Strategy

Consider using your existing customers to increase your sales. Take the time to analyze who your customers are and what they buy. Many small businesses do not recognize how powerful a selling tool their customers can be. When you have a clear understanding of the people most likely to do business with you, you can target sales efforts more effectively, whether it means direct sales, telemarketing, mail promotions, etc. This can also help you upsell other products and/or services. Upon analyzing your customers, you may decide that your most cost effective sales effort would be achieved through a direct sales effort to consumers at home. With this information, you can make intelligent decisions on the most efficient way to allocate your resources.

The next step is to decide how you will reach your target market with your message. What is the most cost effective way to reach your target market? Again, research is key. Try various methods to see what works best. Use testing to determine the most persuasive advertising and the most effective sales promotion. Market research can be done at minimal cost to the small business owner. For example, the advertising manager can be instructed to ask his/her friends and acquaintances their perceptions of the advertising copy. Or a small business owner can do a casual survey of his/her present and potential customers.

The best way to determine your marketing strategy is to consider your own purchasing habits and those of your customers. When you buy a product or service, what influences you? Are you swayed by advertising that you see in a newspaper or magazine, or do you respond to well-executed sales promotions? When you shop for a service or product, what makes you decide to buy one thing instead of something else? Depending on the size of your business, you may have conducted this type of research informally by asking existing customers. Asking them why they buy your product or service, what need it fills, or what competitive advantage you have over others in the industry, will help you write a precise target market statement and make efficient use of your marketing resources.

5. Financial Projections

The final section of your business plan outlines your financial projections. This section starts by projecting your sales, and then your expenses, to figure out how much profit you are projecting over these years. This is the most critical part of your business plan and should be clearly stated on a mathematical basis. Underestimating expenses will consign a business to an early death. It is best to predict these for the first 12 months and then project it annually for the following years. For start-up businesses, it is often very difficult to predict revenues. Understandably, many entrepreneurs find this more challenging than any other. Prepare to spend a significant amount of time developing your financial projections. Essential to the plan’s success, all your calculations must be backed up with solid assumptions. These assumptions and the projections they generate are of critical importance to potential investors. Carey Ransom of socks.com says, “Many business plan readers will read only this section of your business plan.” So if the rest of your business plan is well developed and you have made credible assumptions, you will likely attract investors. Projections will serve as best expectations to form performance and financial results, what the business thinks it can achieve. Although the projections are often far from what really happens after implementation, a well-thought-out projection will greatly increase the likelihood of success. A well-constructed financial model will enhance the prospects of securing investors and obtaining loans. Heavily documented, the deep understanding of the business expressed through the financial model will reveal high levels of competency. Therefore projecting movement in variables in the market, and manipulating different scenarios as to put the business in a position to react effectively to changes, are quite significant attributes to a successful business.