Business Plan – A formal statement of a set of business goals, the reason why they are believed attainable, and the plan for reaching those goals. What is it for? Prior to setting up an enterprise – similar to feasibility study During the first few years – serves as a guide for the entrepreneur When already at peak – focused on bringing the enterprise to a higher level of growth Business Plan I. II. III. IV. V. VI. Introduction Executive Summary Information About Your Business Industry Analysis Marketing and Sales Operational Plan VII. Financials I. Introduction a. Cover Letter –A cover letter is essential whenever you are presenting the business plan to somebody for a specific reason and should be tailored to each individual. Like any other letter, it should include names, dates, and a cordial greeting. In the first paragraph, explain exactly why you are presenting the business plan to the recipient. Take 1-2 paragraphs to discuss our business and let the reader know you appreciate their consideration and would be happy to address any question or concern. Include any necessary contact information. b. Title page – This should be clean and simple. It shall include the title of the document (Business Plan, Business Proposal, etc), The name of your company, A sub-heading, if necessary, Who the business plan was prepared by, The name of any other owners or partners, and basic contact information c. Table of Contents- Essential to make your business plan transparent and easy to navigate. It is unlikely that a serious investor will read through your plan once and toss it aside, so you want to make it easy for them to return and pick up where they left off or revisit any key bits of information. II. Executive Summary – The executive summary is exactly what it sounds like – a brief summary that describes the essence of what your business is and what it aims to do. Begin with a single sentence that sums your business up. This is otherwise known as your value proposition. Describe what niche or problem your business fills or solves. Explain how your business solves this problem in a way that the rest of the competition does not or cannot. A very brief (one or two sentences) summary of any other information from the following sections that would be critical to your business’ success. III. Your Business / Company – This chapter breaks down all the necessary details you’ll have to include about your company in an easy and digestible manner. For somebody outside of your organization, it will act as a primer on exactly how your company is structured, how it operates, and what its goals are. a. Structure of Your Business: Sole-proprietorship, Partnership, Corporation. Once the legal structure is determined, you’ll need to break down the ownership of the business. Provide a brief introduction to any key executives or owners, outlining what strengths they have and how they will impact the business. b. Business Vision, Mission, and Values Business Vision- All about the company’s goals. It serves as a template for exactly what you’re trying to achieve, both short-term and long-term. A vision statement is your chance to think big. Mission - Where a vision statement thinks big, a mission statement is more practical. Your mission statement should discuss your company’s purpose. Why does it even exist in the first place? This mission statement will act to provide organizational direction and help you achieve your vision. Values - The values are all about how you plan to operate your business in relation to the stakeholders. This includes investors, customers, and members of the local community. How do you plan to treat them? What are you doing to make their lives and the world they live in better? IV. Industry Analysis - Explain the state of your industry and what your competition is like using some tried-and-true business planning methods. a. Market Size - Describe exactly how large the market is or how large the population you plan to serve is. In addition, you should discuss trends. Is your market growing or retracting? If growing, discuss how you project to fit into that growth and seize your market share. If shrinking, discuss why you think entering the marketplace is worthwhile, and whether you project growth in the future. b. Industry Focus and Trends - Industry analysis should be data-driven. This includes looping back to the market size and discussing whether it is growing, stagnant, or shrinking. Are there any overarching trends or cycles that will affect your business? This is also a good opportunity to discuss pricing. What type of money does your average customer spend in your industry? What price point are you aiming for, and why is that a good strategy? c. PESTEL Analysis and SWOT Analysis V. Marketing and Sales - Readers need to know how you’ll be marketing and selling your product or service. a. Customer Segmentation - describe exactly what type of customer you’ll be targeting. You need to include anything defining that you believe is important to your ideal customer. This can include: Demographic – age, gender. Socioeconomic profile – income, Psychographic –motivation, lifestyle preference. values b. Advertising and Promotion Plan - After building a strong customer profile of your target audience, you should know what your customer cares about. Think about how your business fits into that, and strategize how you’re going to market to them. Use their demographic and behavioral information to determine the most appropriate channels to focus on. c. Branding - Discuss your branding strategy. Knowing who your customers are, think about where you’re going to position yourself. Your brand should seep into all aspects of your business – the website, advertisements, and even the tone of communications with customers. Whatever strategies you have for these elements, make sure to lay them out. Finally, include your company logo and slogan. d. Sales Distribution Plan - How exactly do you plan on getting your goods or services into somebody’s hands? Do you plan on hiring a sales staff or will you handle it all yourself initially? Discuss your pricing strategy and why it’s a good value for your customers. VI. Organizational and Operational Plan - This section discusses how you’re going to execute your vision. Production Process - Your outline should include: Raw materials, Machines or Technology used for production, estimated daily output and methods of quality control for pre- and postproduction. VII. Financials - Here are the components you must include in your business plan’s financial information: a. Forecasted Sales - As you forecast sales, include exactly how much revenue you expect to earn from those sales, and the total direct cost of those sales. You’ll be able to use these figures to determine revenue and gross margin, which you should use to compare to industry and competitive standards b. Projected Expense - Once you have your projected revenue, it’s time to figure out exactly how much it costs you to make those sales. c. Balance Sheet - This includes your projected sales and expenses, but also deals with assets and liabilities.