Monthly Archives: September 2010

What is in a Business Plan? (Part 1 of 11)

The Business Plan from the Startup Garage

What is in a Business Plan? (Part 1 of 11)

Time To Complete: Approximately 180-400 hours

A business plan is a document that clearly communicates what it is your company does, identifies your goals, and shows potential investors how you plan on being successful.

business plan acts as a road map.

By giving you an idea about what audience to target and how to go about doing it.

Creating a business plan also gives your business focus so you can put all the puzzle pieces together and create a strategy and plan for how the company is going to succeed.

Below I outline the major areas of a business plan

Do Your Research

The first step to any business plan is simple: research. If a company is to be successful it is absolutely crucial that the owners know as much as they can before the business gets off of the ground.

There are three areas that every entrepreneur should analyze before starting a business: the company’s industry, competition, and market.

An industrial analysis is a snapshot of the current conditions of your industry at the present time and helps entrepreneurs understand the different factors at work (market, political, economic) within a given industry. Business owners can then identify the various threats and opportunities facing their business, ultimately helping them identify ways to create competitive advantages.

Researching what your potential competitors are doing is also extremely important. Therefore, the competitive analysis of a business plans should include an assessment of the differences between a firm and its competition, and a detection and examination tool to define the factors that cause these differences.

After researching your industry and your competitors, a good business owner will perform a market analysis. A market analysis is conducted to define and determine the attractiveness of a given market and to understand its evolving opportunities and threats as they relate to the strength and weaknesses of a particular business. The focus of this section should be on your target market, or the people you intend to sell your products/services to.

Create a Marketing Plan

After you completed your research, it is time to think about how you are going to market your product. The first step is to clearly define what your company is selling. This section will analyze the features of your product or service and define the unique selling point (USP) of your product.

The next step is to define your mission statement, core purpose, and core values. This section represents the identity of the company and shows potential investors what you wish to accomplish and how you will go about doing so.

Now that you have defined what your product or service is and your companys values, you can now create your marketing strategy. The marketing plan includes a sales forecast, marketing goals, your market position, and much more. The purpose of this section is to give detailed actions to be taking in order for your company to achieve sales success.

Organize Your Company

Making sure that the structure of your company is structurally sound is just as important as defining your sales goals. If there are any weaknesses in your company it is critical to find and fix them immediately. A solid operations plan will go a long way to insure your companys success. The operational plan will tell potential investors how you are going to get your product/service out to market. That is, how are you going to get your product out of the production stage to the doorstep of your target customer.

The management team section describes the team that will help you succeed in building your business. It will also describe how employees will be selected, trained, and rewarded and what service providers your company will need in the future.

You will also create financial projections in order to give you an idea of how your business is performing according to the market assumptions and the business model you choose. The financial statement should be projected out month by month for the first year and then annually for the next two years and include metrics such as startup expenses, assumptions, sales costs, operating costs, and cash flow.

After you have completed the nine sections described earlier, you will create an executive summary, which will summarize your business into a one page document. It will act as your pitch in order to impress potential investors and anyone who does not know about your company. The time it takes to complete the business plan writing process should take at least 200 hours. You can take a look at one of our sample business plans at any time.

Next, we will discuss how to write an Executive Summary.
 

Whether you have a question about your Business Plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Executive Summary (Part 2 of 11)

Executive Summary from the Startup Garage

What is in a Business Plan: Executive Summary (Part 2 of 11)

Time For Completion: Approximately 2 hours

An Executive Summary is essentially a description of the whole business.

While it will be the first thing people who are reading your business plan will see, it should be the last thing you write.

Usually no more than 1-3 pages long, it performs a sales function or a ‘pitch’

You are selling your concept to an outsider, who does not know anything about it and yet you might want him/her to invest in your company or join the startup team.

It can be said that the Executive Summary puts all of the pieces of the puzzle together for the readers of your business plan.

Whats in it?

The Executive Summary includes the basic elements from each section of your business plan, and that is why it is written at the very end, when every detail is clear to you and can be presented to the investor.
It includes the summary of your business, marketing and operations.

Why its Important

Executive Summaries are important because it is the first thing someone reading your business plan will see. This quick glance may determine whether a potential investor finances your company or not. It also gives readers an overview of what they will read and act as an introduction to your business.

The executive summary should be written in a language that will persuade a potential investor to want to learn more about the company.

Now, the blog series will dive into each section in more detail. The first section will start off by giving an outline of a Mission Statement, Core Purpose, and Core Values.

Remember, you can take a look at one of our sample business plans at any time.
 

Whether you have a question about your Executive Summary or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Mission Statement, Core Values, and Core Purpose (Part 3 of 11)

Making a Business Plan from the Startup Garage

What is in a Business Plan: Mission Statement, Core Values, and Core Purpose (Part 3 of 11)

Time For Completion: Approximately 5 hours

Your company’s Mission Statement, Core Purpose, and Core Values represent your company’s beliefs and values.

 

When writing a Mission Statement you are writing your organizations primary goal and purpose.

A company’s Core Values are qualities that the company would not give up no matter what, even if it meant going out of business. A Core Purpose is the reason that the company is in existence. The Core Purpose gives meaning to what the company or organization is doing and it will guide the company through both good and bad phases.

What’s in It?

The Mission, Core Values, and Core Purpose section is usually the shortest section of the business plan, containing only a few phrases or sentences. A Mission Statement is usually only a sentence or two, giving a complete and inspiring description of your company’s main goal. Core values are a short list of words or phrases that all members of the company will strive to embody. The Core Purpose is usually only one sentence, and is the most basic definition of what the company does.

Why it’s Important

It is an opportunity to show your passion for what you wish to accomplish and how you will go about doing so. More importantly, this section of your business plan serves to create the identity of your company. The Mission, Purpose, and Values that you state here will guide you and your team members through all of the challenges and successes that lay ahead of you in your business.

The next article will tell you how to set up a product description section. Remember, you can take a look at one of our sample business plans at any time.
 

Whether you have a question about your Core Values or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Product Description (Part 4 of 11)

Business Plans: Product Decriptions from The Startup Garage

What is in a Business Plan: Product Description (Part 4 of 11)

Time For Completion: Approximately 5-25 hours

In this section you get the chance to clearly explain the products or services your business will offer.

The information provided in this section will become the basis of your marketing plan

Product description should be written so the reader can easily understand what the product is and what it does. You should never assume that your product will sell itself, so you must always include a detailed description of the product. In addition to a comprehensive explanation of your product, the Product Description should also compare your product to other similar products on the market. This gives you the opportunity to clearly define what advantages your product has over the competition

Whats in it?

A Product Description contains an overview of your product or service, the product or services features, benefits, and advantages, as well as any product development activities, and liability issues. The overview should paint a complete picture of the product by answering the following questions in detail: what the product or service is, what it does, and how it performs its function.

If possible, it is a great idea to add pictures, blueprints, or any other graphical descriptions of your product to give as clear of an explanation of your product as possible. By doing this in comparison with other competing products, you can make it clear why your product is better than the competition.

The product summary should also take time to focus on the problem(s) that your product will solve. In addition to an explanation of the problems, you should also discuss what the causes are, how the product solves these problems, and the benefits to potential customers.

A complete description of your product, the problems it solves, and a comparison with competitors should all work to make a case as to why your product will be successful.

Why it’s Important

This section of the business plan is your opportunity to completely hash out your product idea, down to the finest detail, which gives you a complete understanding of your product. The information you learn from this section will help you improve your product and differentiate from competitors.

By writing a cohesive Product Description that explains the details of the product, the need for it, and how it has advantages of its competitors, you are making a strong case for why your product will succeed and be profitable. Without this information, investors have no way of knowing if you completely understand your product, or how you plan to compete with others, which makes for a very risky investment.

The next section will discuss how to properly research your potential customers in the Market Analysis section. Remember, you can take a look at one of our sample business plans at any time.

 

Whether you have a question about your Product Description or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Market Analysis (Part 5 of 11)

Market Analysis from the Startup Garage

What is in a Business Plan: Market Analysis (Part 5 of 11)

Time For Completion: Approximately 20-30 hours

A Market Analysis

is conducted to define and determine the attractiveness of a given market, and to understand its evolving opportunities and threats as they relate to the strength and weaknesses of a particular business.

The focus of this section should be on your target market or the people you intend to sell your products/services to. This can include individual customers, know as business to customer (B2C), or other businesses, known as business to business (B2B). So, in a way, the Market Analysis is the ground work for your company’s plan of attack.

What’s in it?

A market analysis summarizes the size and potential of your target market, current market trends, and gives demographic information about your target market.

The demographic information you want to collect about your target market will vary depending on if your company is B2B or B2C. B2Bs should focus on a target region, customers industry and size of companies, while B2Cs should focus on their customers location, personal demographics (age, gender, educational background) as well as psychographic characteristics that define why they are interested in your product.

This section should include a table that lists all of the potential market segments that you will target along with all of the information you collected in your research.

After you have studied your potential customers you should look into past and future trends of the market, keeping in mind factors like price sensitivity, demand for variety, level of emphasis on service and support your target market desires, and any regional trends that affect only the members of your target market in that specific area.

Why its Important

Understanding who will buy your product is an important foundational step. By understanding who your customers are and what motivates them to buy, you will be able to create an informed, effective marketing strategy.

Most of this information will have to be found internally by your firm by doing research of your past customers. If you are a new firm who doesn’t have any history yet, try finding the answers to these questions by contacting a firm that is similar to yours, or a trade association related to your industry.

The next post will describe how to create an Industry Analysis. Remember, you can take a look at one of our sample business plans at any time.
 

Whether you have a question about your Market Analysis or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Industry Analysis (Part 6 of 11)

Industry Analysis from the Startup Garage

What is in a Business Plan: Industry Analysis (Part 6 of 11)

Time For Completion:Approximately 30 HOURS

An Industry Analysis is the “analysis of conditions in an industry at a particular time, including the behavior of and relations between competitors, suppliers, and customers.

Understanding the different factors at work (market, political, economic) within a given industry is an important component of effective strategic planning for any company.

You should start out by defining type of industry you are and then determine what sector of the industry you will occupy. Once this is established, you can research what factors have a potential impact on your startup and the major organizations in the industry.

Whats in it?

The Industry Analysis should cover several different topics about the industry including industry size and growth trends, major organizations in the industry, and the important factors that affect the behavior of the industry. The industry size section should include revenue figures, the number of companies in the industry, and the number of employees.

The major organizations section should specify who your potential competitors are along with your suppliers, distributors, and trade organizations and include important specifics such as who owns the company, a brief description, who their target market is, when they were established, their contact information, and revenue.

Factors currently affecting the industry may include government regulations, environmental factors, as well as economic and market conditions, any of which can affect your chances of starting a successful business in the industry.

Why its important

Industry Analyses help business owners understand the big picture of their industry and identify the various threats and opportunities facing their business, ultimately helping them identify ways to create competitive advantages.

Knowing what political, economic, and market factors affect your industry will better prepare you for when you enter the market by understanding the major forces that effect how you do business.

Insider Tips:

  • Identify and contact trade organizations to find most of this information.
  • Build these relationships and bookmark great resources. As your business grows you will need to keep up with changes in the industry.

The next section will discuss how to analyze the competition in the Competitive Analysis. Remember, you can take a look at one of our sample business plans at any time.
 

Whether you have a question about your Industry Analysis or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Competitive Analysis (Part 7 of 11)

Competitive Analysis from the Startup Garage

What is in a Business Plan: Competitive Analysis (Part 7 of 11)

Time For Completion: Approximately 20-30 hours

Competitive Analysis It is an assessment of the differences between a firm and its competition.

As well as a detection and examination tool to define the factors that cause these differences.

The section breaks down the competition into direct and indirect competitors and gives you an idea about how to go head-to head with these companies in order to reach potential customers.

Whats in it?

The competitive analysis first gives an overview of your direct and indirect competitors in relationship to your business and gives a list of all your competitors based on this definition.

In the most basic sense, direct competitors are those that sell a similar product.Why its Important

A competitive analysis is incredibly useful because it reveals your company’s true position within the market. It shows you what your competitors are doing and demonstrates to potential investors how you are unique from the competition.

After completing a competitive analysis, you will have a better understanding of your competitive advantage and be able to foresee any potential barriers your startup has to enter the market.

Insider Tips:

  • Your competition can be one of your greatest sources of new ideas when starting a business. There is no need to reinvent the wheel. The successful companies have figured out what works best through years of testing and copying what works.

The next section will show you how to reach your potential customers in the Marketing Plan. Remember, you can take a look at one of our sample business plans at any time.
 

Whether you have a question about your Competitive Analysis or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Marketing Plan (Part 8 of 11)

The Marketing Plan from the Startup Garage

What is in a Business Plan: Marketing Plan (Part 8 of 11)

Time For Completion: Approximately 20-30 hours

Your Marketing Plan gives a complete picture of your marketing goals, strategies and tactics.

By answering many questions that will help your product reach your potential customers.

Some of the processes that you will go through when writing a Marketing Plan include: setting goals, creating your company’s brand, and choosing the marketing strategies that you will use to generate potential customers.

Whats in it?

A Marketing Plan contains many different parts. The first section of the Marketing Plan focuses includes sales goals, marketing goals, and creating a detailed a sales forecast that shows how you will reach your goals.

Then, you will use your research from previous sections of the plan to summarize your market position, as well as a list of your company’s strengths, weaknesses, opportunities, and threats. This information is then used to create your marketing strategy.

This includes a branding strategy, a list of distribution channels, a pricing and marketing strategy, and a customer service plan. Your branding strategy includes your current and ideal customer profile, your core message, your company name, and tag line.

Why its important

You may have a great product or service, but no product sells itself. In order to be successful, you need to create a well informed strategy for how to generate potential customers and sales.

Investors will analyze this section carefully to determine several things: Are your sales and marketing goals attainable? Is your budget large enough to fund your marketing strategies? Is your sales forecast calculated realistically and conservatively?

If these attributes check out, along with the other marketing fundamentals such as branding and positioning, you stand to gain a lot of confidence from investors.

After the Marketing Plan is complete, the next step is to create an Operations Plan. Remember, you can take a look at one of our sample business plans at any time.

 

Whether you have a question about your Marketing Plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Operations Plan (Part 9 of 11)

Operations Plan from the Startup Garage

What is in a Business Plan: Operations Plan (Part 9 of 11)

Time To Complete: Approximately 10-40 hours

The Operational Plan is an essential component of the business plan and it tells the reviewer how you are going to get your product/service out to market.

That is, how are you going to get your product out of the production stage to the doorstep of your target customer. As an internal planning document, the Operations Plan should be a detailed and in-depth.

In a business plan, the Operations Plan should highlight the important facts for potential investors.The relative importance of an operational plan will depend on the nature of the business. For example, a production facility will probably require significant attention to operational issues.

Whats in it?

The Operations Plan will give you a detailed outline about the structure of your business. It will also answer how your product will be made and delivered to the customer, what regulations and organizations there are to monitor the industry, how you plan to stay up to date, who are your suppliers, how do you receive the product, how long will it take, how much it costs, what your backup plan is, and what quality control measures you have in place.

Operation plans also act as a guide book on inventory management and purchasing procedures.

Why its Important

The purpose of the Operations Plan is to describe the where’s and how’s of your business, meaning where you will locate the business (along with any physical necessities) and how you will produce products or services for your clients.

Business plan reviewers know the importance of a well thought out Operations Plan and place considerable weight on this section since it can mean the success or failure of a business. This document will also give the entrepreneur an opportunity to work out many potential problems on paper prior to commencing operations.

The next section will show you how to build an effective team. Remember, you can take a look at a sample business plan.

 

Whether you have a question about your Operations Plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

What is in a Business Plan: Management Team (Part 10 of 11)

Management Team from the Startup Garage

What is in a Business Plan: Management Team (Part 10 of 11)

Time For Completion: Approximately 20 hours

This section describe the team that will help you succeed in building your business.

To write this section a considerable amount of time and energy will need to be spent or have been spent on researching and building relationships.

Whats in it?

The business plan should include a statement as to how employees will be selected, trained, and rewarded. Such a background can be important for business plan reviewers to give them a feel for the company’s style.

When you are developing your management plan begin with an objective assessment of the company’s requirements. Based on these assessments, the composition of the rest of the company may be defined as the following: key management, board of advisors, board of directors, and professional service providers.

A resume for each key team member should also be added in the appendices of the business plan.

Why is it Important

The quality of the team determines the success of your business. Many ventures ultimately fail because the proper talent has not been assembled. Individuals with strong technical backgrounds might ignore the importance of including on a management team people with the appropriate business background, and vice versa.

If you are preparing your business plan for financing purposes, you need to take particular care in crafting your management section. Even if you are developing your business plan for internal use, an accurate evaluation of your key employees strengths and weaknesses will help you make the best use of your management team.

The last step is creating the Financial Projections section. Remember, you can take a look at one of our sample business plan at any time.

 

Whether you have a question about building your Management Team or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!