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Step Three: Business Plan
Introduction: A Recipe for Success
Do you want your business to succeed?
Studies show that small business owners who complete a business plan before starting their businesses are much more likely to succeed than small business owners who do not.
How does a business plan help small business owners succeed?
1) It helps you by providing direction for your business.
It answers the following questions:
- What type of business are you starting?
- What are your goals?
- How will you reach your goals?
- Who are your customers?
- Who is the competition?
- Where should you locate your business?
- How will you finance your business?
- How will people find out about your business?
2) It helps you by providing information to other people who could help you succeed, such as investors, banks, potential partners, and future employees.
Preparing a Business Plan takes time and effort, but, in the long run, it will save you time and effort. It will help you find out:
- Can your business make money?
- Do you have the time, energy and resources to make your business work?
- How quickly will your business grow and how much will the growth cost?
- What are the benchmarks that will show how your business’ planned growth compares to its actual growth?
If you decide the business can succeed and you can make it work, the Business Plan will serve as your guide throughout the entire start-up process and as a reference for the entire life of your venture. Its importance cannot be overemphasized.
The business plan is a continuous process, not a document that is done once and then put away on a shelf. It should be updated every quarter, or at the minimum annually, to compare the actual figures that have transpired with the projections that were initially included in the plan. Comparing your budget with what has actually happened will help keep a company "on track" and prevent future surprises.
This CD is designed to make the process of preparing a Business Plan easier. If you have completed the research in “Step 1: Getting Started,” you have already done some of the homework necessary for the Business Plan.
If you really want to be in business for yourself, if you are willing to invest the time and effort required to be successful, if you want to have map to follow on the exciting road of entrepreneurship, continue reading.
Elements of the Business Plan
The Business Plan consists of:
1) Cover Page
The cover page consists of your name, address, phone number, e-mail
address, and web site.
2) Table of Contents
3) Executive Summary
The Executive Summary contains a summary of the other sections
of the Business Plan. It is the most important section, as it
is the first (and sometimes only) part of the Plan that some interested
parties may read. You will prepare this section last, after completing
the other parts of the Business Plan.
4) Background Information
This section includes:
a) Your personal background and qualifications to run the business;
b) A mission statement for your business;
c) Background information on the type of industry into which your
business fits, and its place within that industry; and
d) The goals and objectives for your business.
5) Description of Products and/or Services
This section includes a description of the product(s) and/or service(s)
you are selling. The description should include the price of each
product or service, and the cost to your business to produce each
product or service.
6) Organizational Matters
This section tells how your business will be managed and organized.
Questions answered will include: Is the business a sole proprietorship,
partnership, corporation or limited liability company? Who will
manage the business? Will the business have employees? Who will
be its advisors?
7) Marketing Plan
The Marketing Plan includes information on your customers and
competitors. Based on this information, you will decide where
to locate your business and how to promote its product or service.
8) Financial Plan
The Financial Plan will provide information about your resources
for running the business and your projections for profits. It
is the longest and, many would claim, the most important part
of the Business Plan. Based on the Financial Plan, you should
be able to determine if your business will be profitable, and
hence, if it will be worth your effort to start it.
9) Conclusion (optional)
The Conclusion presents a summary of why your business will be
successful, using data gained in the other sections to support
your claim. It may also present how much money is required for
the business, where the money will come from and where it will
be used.
10) Appendix (optional)
The Appendix contains any supporting materials, such as your personal
resume or a record of any relevant training or education.
If you would like to view a sample business plan first, please select one:
Bubba's
Bagels | Sorrel's
Horse Farm
NCstV2.6 © 2005 Center for Entrepreneurial Development, Community College Workforce Alliance, Richmond, Virginia and the North Carolina Community College System, Raleigh, North Carolina. All rights reserved. May not be reproduced by any third party.