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Your
Business
Plan
A
business
plan
is
a
vital
tool
for
the
successful
operation
of
any
business,
yet
many
small
business
owners
bypass
this
critical
element
of
their
business
planning
and
operations.
The
Wharton
Small
Business
Development
Center
identifies
three
main
reasons
why
the
small
business
owner
should
make
the
effort
to
prepare
a
business
plan:
-
Preparing
a
business
plan
forces
the
business
owner
to
take
an
objective,
critical
view
of
the
business
project,
and
helps
to
determine
the
feasibility
of
the
project.
- A
business
plan
provides
information
to
investors
and
lenders
to
help
them
determine
whether
they
should
invest
in
or
finance
the
project.
- A
business
plan
serves
as
an
operating
tool
that
can
be
used
to
manage
the
operations
and
finances
of
the
business.
While
each
business
plan
is
unique
and
tailored
to
the
specific
company,
there
are
established,
accepted
guidelines
that
are
generally
followed
when
creating
a
business
plan.
A
business
plan
usually
contains
seven
main
sections:
-
Executive
Summary
-
Business
Description
- Development
and
Production
- Sales
and
Marketing
(Marketing
Plan)
- Management
- Financials
- Funding
Request
These
sections
are
broken
down
further
as
follows:
-
Executive
Summary
-
This
is
a
clear
and
concise
overview
of
the
main
elements
of
the
business
plan
containing:
- A
description
of
the
business,
including
information
about
the
product
or
service
it
provides,
the
market,
and
its
competitive
advantage.
- A
summary
of
the
financial
aspects
of
the
business
such
as
cash
flow,
sales,
profits
and
the
expected
return
on
investment.
- A
description
of
the
company,
its
legal
structure
and
date
of
formation,
its
owners
and
principals,
and
key
personnel.
- A
clear
statement
of
funding
requirements,
how
these
funds
will
be
allocated,
and
how
the
funding
will
help
to
make
the
business
profitable
in
order
to
ensure
repayment.
- Business
Description
(a)
The
Industry
- Overview
of
the
current
state
and
future
outlook
of
the
industry,
containing
thoroughly
researched
and
substantiated
facts.
- Details
about
the
trends,
legislature
etc.
that
will
impact
the
industry.
(b)
The
Company
- The
Company's
Mission
Statement.
- The
status
of
the
business
(whether
it
is
a
startup,
an
expansion,
or
a
takeover
of
an
existing
business).
- Details
about
the
type
of
business,
date
the
company
was
formed,
why
it
was
formed,
and
the
business
entity(sole
proprietorship,
corporation,
partnership).
- Details
about
the
Company's
principals
and
their
expertise.
- Information
about
the
market
needs
the
company
will
meet,
the
target
market,
how
the
product
will
be
sold,
advertising
and
promotion,
and
product
support.
(c)
The
Product
- A
detailed
description
of
the
product
or
service,
emphasizing
the
benefits
to
the
customer.
- An
explanation
of
the
uniqueness
of
the
product/service,
and
why
it
will
be
successful.
(d)
Positioning
- Details
about
how
the
company
wants
to
be
perceived
by
its
customers
and
competitors
in
the
marketplace.
- An
analysis
of
the
company's
position
in
relation
to
its
competitors
regarding
needs
fulfillment,
distribution,
pricing,
value,
content,
and
availability.
(e)
Pricing
Strategy
- Details
of
the
cost
of
the
product/service,
with
an
explanation
of
how
prices
were
derived,
how
the
price
will
contribute
to
good
positioning
in
the
marketplace,
and
how
pricing
compares
with
the
competitors'.
(f)
The
Market
- A
thorough
and
detailed
description
of
the
company's
target
market,
including
demographics,
customers'
characteristics
and
concerns.
- A
discussion
of
the
market
size
and
the
positive
and
negative
factors
that
will
affect
future
growth
such
as
industry
and
socioeconomic
trends.
- A
description
of
the
main
competitors
-
their
market
share,
how
they
do
or
do
not
meet
their
customers'
needs,
and
how
the
company
can
do
better
at
meeting
those
needs.
(g)
Estimated
Sales
- Projected
sales
figures
for
the
next
three
years
in
units
and
dollars,
based
on
market
size,
number
of
customers,
competition
and
product/service
advantages.
Also,
a
discussion
of
what
makes
the
product/service
unique,
why
customers
would
buy,
and
how
the
company
expects
to
see
the
customer
base
growing.
- Development
and
Production
- Details
about
the
current
status
of
the
product,
and
a
development
schedule
outlining
the
steps
needed
to
get
it
ready
for
market.
- An
explanation
of
the
various
stages
of
production
from
inception
to
selling.
- A
design
and
development
budget
itemizing
all
expenses
involved
in
producing
the
final
product.
- Details
about
labor
requirements,
apart
from
management,
including
current
and
future
labor
force,
skills,
and
training
needs.
- Operating
Expenses
spreadsheet,
detailing
fixed
and
variable
costs.
- Cost
of
Goods
spreadsheet
detailing
the
costs
of
producing
the
product.
- Sales
and
Marketing
(Marketing
Plan),
reflecting
the
results
of
extensive
research
and
analysis
of
the
market:
- A
description
and
analysis
of
the
target
market.
This
includes
demographics,
as
well
as
information
on
customers'
lifestyles,
attitudes,
and
preferences.
-
A
competitive
analysis,
which
identifies
the
competitors,
their
strengths
and
weaknesses
regarding
their
product
range,
pricing
policies
and
strategies
and
their
competitive
advantage.
- A
description
and
analysis
of
the
marketing
mix:
- Pricing
-
An
explanation
of
the
pricing
method
chosen,
and
why
this
method
is
considered
the
best
for
the
business.
- Product
-
A
description
of
the
product/service
being
sold,
emphasizing
the
benefits
to
the
customer.
- Distribution
-
A
description
of
the
business
location
as
well
as
the
methods
used
to
get
the
product
to
the
target
customers
(direct
selling,
sales
representatives,
wholesale
and/or
retail
distributors,
brokers).
- Promotion
-
Details
of
the
advertising
and
promotion
strategy
used
to
inform
the
target
market
about
the
product/service
being
sold,
its
features
and
benefits.
-
Advertising
-
Description
of
media
used
to
get
the
message
across
(newspapers,
television
and
radio
etc.)
- Public
relations
-
press
releases
and
a
list
of
targeted
media.
- Packaging,
including
a
description
of
the
package
design
and
a
sample.
- Sales
promotions,
which
includes
brochures,
flyers
as
well
as
special
promotions
such
as
coupons,
gift
certificates,
and
special
sales.
- Management
- A
description
of
each
member
of
management,
including
expertise
and
responsibilities.
- A
description
of
the
people
who
own
and
control
the
Company.
- A
list
of
the
members
of
the
Board
of
Directors,
including
their
expertise,
and
a
demonstration
of
how
each
would
contribute
to
the
Company's
success.
- Financials
- Cash
Flow
Statement
that
demonstrates
the
company's
ability
to
generate
cash,
and
how
the
cash
will
be
used.
- Balance
Sheet
detailing
the
Company's
assets
and
liabilities.
- Income
Statement
detailing
revenue,
expenses,
capital,
and
cost
of
goods.
- Funding
Request
- The
amount
of
money
needed,
with
a
breakdown
of
how
it
will
be
spent,
as
well
as
a
demonstration
of
how
these
funds
will
make
the
business
profitable.
- Details
of
the
investments
made
by
the
owners/principals.
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