It’s Vital To Write A Business Plan
So you are venturing into the world of business ownership. Whether it is retail, wholesale, manufacturing, or service, one of the most vital steps before jumping in is to write a business plan. The plan clearly states what is ahead. It is in the process of writing your business plan that you search your soul for answers about the viability and sensibility of your idea. You cannot obtain working capital from anywhere without a good business plan. What follows are questions and answers about each chapter of your business plan.
What is an Executive Summary?
This chapter spells out an overview of the business. Here you are creating the big picture in general terms of every aspect of the business. A reader should have a good feel for each aspect to understand not only what is going on, but also that you have a deep knowledge of the industry. Each subsection listed below should be at least one page.
*a) Business description
*b) Current position and future outlook
*c) Management and ownership
*d) Product uniqueness
*e) Financial summary
What Should Be Included in the Products or Services Chapter?
Describe in detail what your business will produce or provide. Gear your descriptions toward people who know nothing about it, with lists of traits and properties. The more detail that you add here, the better your business plan will be received by lending institutions who will evaluate your viability. Show that you understand intimately all the subsections listed below.
*a) The unfulfilled need
*b) Product uniqueness
*c) Pricing and value
What Are Market Research and Assumptions?
In this chapter, you will provide the results of your own research on what your customer is. Depending on the size and scope of your company, the research may be from personal experiences, such as a previous job in the same industry where you learned market analyses, or by hiring an independent research firm to conduct a market analysis for you. Online research can also provide valuable information. You should demonstrate here that you understand your particular location.
*a) Market overview and size
*b) Market segments
*c) Customer profile
*e) Market share
*f) Geographic market factors
What Should Be Listed in the Marketing Strategies Chapter?
Here you will describe how you will carry out your marketing. The information here builds on the previous chapter. Add specifics about when, how, and to whom you will promote your business. Perhaps you will hire a company to do the marketing for you. Justify the money spent on a marketing service either right away or in the future.
*b) Advertising and promotions
*c) Selling methods
How Are Raw Materials and Supplies Listed?
Report what they are and how you will purchase them. You should list possible domestic and international suppliers and your experience with negotiating pricing. Give a detailed price list and proposed starting point and ongoing predictions of costs. Experience in the particular industry really comes in handy here, as the nuances that you describe prove that you are knowledgeable in the field. It goes a long way to convincing bankers that you are a good risk.
What Should Be Included in a Chapter About a Facility and Administrative Plans?
This chapter covers where you will conduct your business and how office tasks will be performed. If you will do all of the administrative work yourself, then you should justify how you will have time with all of the other tasks that you must perform. The downfall of many one-person businesses is that the vital day-to-day documentation is overlooked, leading to missed deadlines, for instance. In terms of your space, you should state if you see a need to expand in the future, and when.
What Are Employment Plans and Critical Issues?
Cover a page or two with your plans for employees, how many, and how they will be managed. This is a great place to state innovative approaches in teamwork or work environment. Also, take an honest look at the possible pitfalls and their solutions. A banker will pay close attention to this, as a businessperson who can look at the future in a realistic manner is a better risk.
Depending on your type of business, a business plan should be 12-25 pages or more. Take your time and produce a document that you will be proud to show to a lending institution. If you have been careful and thorough, then the data should tell a story of a viable business. Moreover, you will know exactly where you are headed.
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