(excerpted from “How to Start a Business in New York” e-book, register on the right for more information)
Your business plan is the backbone of your company. This is the first step in determining if your business idea is feasible or not. The plan should discuss the different elements of the business and more importantly, how you can make it into a reality. Execution is key. Planning is great because it gathers all your ideas onto paper, but without a clear method of executing these ideas it will always stay in the concept phase. Another reason for creating a business plan is to get financing. No institution will give you a loan unless you have drafted a formal plan for the business. So better get on your computer and do some serious contemplating.
So what do you need to include in your business plan?
It should start with an executive summary. Typically, I would recommend you writing this section last because it’s the most important piece, and you should be clear about what your company is before you start writing it. It’s the first thing investors and lenders will see. It’s also what I would call your “elevator pitch” on paper. You need to captivate your reader or else there’s no incentive for them to continue reading through the rest of your plan. It defines the concept of your business, what products or services you plan to offer, how you plan to fund and grow the business, and also you. What is your role? It provides an overview of what the reader can expect from the remainder of the business plan. Try and keep this to 1-2 pages.
The second part of the business plan is the basic description of the company. This includes the company name, the purpose of the business, company goals and objectives, and what particular skills you (and your partners) have that brought about the creation of the business. It is an elaboration of initial business concept you introduced in the executive summary. Is it a beauty salon? If so, what skills or training courses have made you an expert in the industry? This information is relevant so the reader can gauge if you have the right skills to provide what the business needs.
The third step is to explain the product and/or service that your business will supply. This will include an explanation of how you plan to provide or manufacture it, what are the costs to make it happen, and the list of suppliers that you plan to get it from.
The fourth part of the business plan is the market. What are the ongoing trends in the industry? Is it growing? If yes, what will you do to make sure you can ride that growing trend to make your business prosper? Be as detailed as possible by describing the segment and demographics of your market. What are their buying habits and how qualified are they to make the purchase of your service?
The fifth part is all about your competition. This can actually be a part of your market segment, but it can sustain its own portion in the business plan. It is important that you tread carefully here and be honest about your standing against the competition. Just starting out, you will definitely be at a disadvantage compared to those who have been in the industry for quite some time. But remember, you can always dwell on what you have that they do not have. It can be a great management, a new product, an alternative solution to a long standing problem in the industry – anything that will prove you have a fighting chance against the competition.
The sixth portion is a brief description of your marketing plan. List down the various ways you plan to market your product, service, or company. Will you go into advertising? If so, what form of advertising will you tap into? Will you employ a public relations officer or get a service provider to create your PR needs? Will you utilize social media outlets? Typically newer social networks, like Twitter and Pinterest, have a higher percentage of women users than men. If you are marketing to this segment, it is highly recommended that you have a presence in these networks. List all your strategies down and how you project they will help you get the market to notice that you now exist. Make sure to give the cost estimates for your marketing plans.
The last part of the business plan is probably the most important one: the figures. Here, place your sales forecasts depending on your sales and marketing strategies. Side by side, indicate the costs needed to implement and sustain them. You need to illustrate how you plan to profit despite the various expenses. It is best to indicate your financial goals. Keep them high and at the same time, reasonable. It will help make your business plan creation a lot easier if you have collated all the information and research needed prior to writing it down. If you need to put statistics of the market, you can check out reliable online statistical sites like the official website of the US Bureau of Labor Statistics (http://www.bls.gov) or the Sifma.org (www.sifma.org). There are also trade journals that you can obtain for a price.
Try not to make the business plan too lengthy. The investors and lenders who will read your plan would want everything to be concise yet complete. Keep in mind the people who are reading your document need to enjoy what you have created. Keep this business plan with you and continually update it when there is a growth or setback. It helps to stay on track and keep your company moving forward.