WRITING A BUSINESS PLAN
A business plan is a written narrative that describes what a new business intends to accomplish and how it intends to accomplish it. For most new ventures, the business plan is a dual-purpose document : (there are also the reason for writing business plan)
⇰ Inside the firm, the plan helps the company develop a "road map" to follow to execute its strategies and plans.
⇰ Outside the firm, it introduces potential investors and other stakeholders to the business opportunity the firm is pursuing and how it plans to pursue it.
Who Reads the Business Plan - and What Are They Looking for?
🙋 A Firm's Employees
A clearly written business plan helps a firm's rand-and-file employees operate in sync and move forward in a consistent and purposeful manner. The existence of a business plan is particularly useful for the functional department heads of a young firm.
🙋 Investors and Other External Stakeholders
To appeal to this group, the business plan must be realistic and not reflective of overconfidence on the firm's part. Investors vary in terms of the reliance they place on formal business plans. Initially, many investors ask for a Power Point deck or the executive summary of a business plan.
Guidelines for Writing a Business Plan
A firm's business plan is typically the first aspect of a proposed venture that an investor will see. If the plan is incomplete or looks sloppy, it is easy for an investor to infer that the venture itself is incomplete and sloppy.
💥 Structure of the Business Plan
A business plan should follow a conventional structure to allows business investors to focus on the parts of a plan that are critical to their decision-making process.
💥 Content of the Business Plan
It must be long enough to provide sufficient information, yet short enough to maintain reader interest. After a business plan is completed, it should be reviewed for spelling, grammar, and to make sure that no critical information has been omitted. And don't forget to place an entrepreneur's contact person inside the business plan.
💨 Style or Format of the Business Plan
it should look sharp but not give the impression that a lot of money was spent to produce it. When writing the plan, avoid getting carried away with the design elements included in word-processing programs, such as boldfaced type, italics, different font sizes and colors, clip art, and so forth. It makes a business plan look amateurish rather than professional. There are three types of business plans :
↬ Summary plan (10-15 pages, for new ventures in the early stages of development).
↬ Full business plan (25-35 pages, for new ventures where they need funding or financing. Its prepared for investor).
↬ Operational business plan (40-100 pages, is meant primarily for an internal audience and provides a blueprint for a company's operations).
💨 Recognizing the Elements of the Plan May Change
New insights invariably emerge when entrepreneurs immerse themselves in writing the plan and start getting feedback from others. Because business plans usually change while being written, there is an emerging school of thought that opposes the idea of writing a business plan and advocates experimentation and trial-error learning gleaned through customer feedback over formal planning. The feedback obtained from these key people will cause the plan to change as it's being written.
Outline of the Business Plan
✨ Cover Page and Table of Contents
✨ Executive Summary
is a short overview of the entire business plan, it provides a busy reader with everything she needs to know about the new venture's distinctive nature. So if executive summary is sufficiently convincing, an investor will request a copy of the full business plan.
✨ Industry Analysis
this description should include data and information about various characteristics of the industry. Industry structure refers to how concentrated or fragmented an industry is.
✨ Company Description
the company history section should be brief, but should explain where the idea for the company came from and the driving force behind its inception. A mission statement defines why a company exists and what it aspires to become The products and services section should include an explanation of your product or service (description of how your product or service is unique and how you plan to position it in the marketplace). This section is the ideal place for you to start reporting the results of your feasibility analysis. The current status section should reveal how far along your company is in its development. The legal status and ownership section should indicate who owns the business and how the ownership is split up. Many business plans rely on the establishment of partnerships to make them work.
✨ Market Analysis
the first task that's generally tackled in a market analysis is to segment the industry the business will be entering and then identify the specific target market on which it will focus. This is done through market segmentation, which is the process of dividing the market into distinct segments. The more a start-up knows about the consumers in its target market, the more it can gear products or services to accommodate their needs. Also we have to complete a competitor analysis and estimates a firm's annual sales and market share.
✨ The Economic of the Business
it address the basic logic of how profits are earned in the business and how many units of a business's product or service must be sold for the business to "break even" and then start earning a profit. The costs of goods sold are the materials and direct labor needed to produce the revenue driver. A firm's variable costs vary by sales, while its fixed costs are costs a company incurs whether it sells something or not. A firm's operating leverage is an analysis of its fixed versus variable costs (its getting high when fixed costs > variable costs, and will takes longer to BEP ; its getting low when fixed costs < variable costs). Break even analysis is an analysis of how many units of its product a business must sell before it breaks even and start earning a profit.
✨ Marketing Plan
a firm's marketing strategy refers to its overall approach for marketing its products and services. Price, promotion, and distribution should all be in sync with your positioning and points of differentiation. Also in marketing plan should describe the company's sales process or cycle and specific sales tactics.
✨ Product (or service) Design and Development Plan
it must include development status (product conception ⤳ prototyping ⤳ initial production ⤳ full production). A product prototype is the firs physical manifestation of a new product, often in a crude or preliminary form. A virtual prototype is a computer-generated 3D image of a product or service idea. It displays the idea as a 3D model that can be viewed from all sides and rotated 360 degrees. A final section should describe any patents, trademarks, copyrights, or trade secrets that you have secured or plan to secure relative to the products or services you are developing.
✨ Operations Plan
a useful way to illustrate how your business will be run is to first articulate your general approach to operations in terms of what's most important and what the make-or-break issues are. You can lay out the key back-stage and front stage activities and address the most critical ones. In this section too, you should describe the geographic location of your business and describe a firm's facilities and equipment.
✨ Management Team and Company Structure
the profiles should illustrate why each individual is qualified and will uniquely contribute to the firms's success. If people have worked together before and have decided to partner to start a new firm, it usually means that they get along personally and trust one another. A board of directors is a panel of individuals elected by a corporation's shareholders to oversee the management of the firm. A board of advisors is a panel of experts asked by a firm's management to provide counsel and advice on an ongoing basis. The most effective way to illustrate how a company will be structured and the lines of authority and accountability that will be in place is to include an organizational chart in the plan.
✨ Overall Schedule
✨ Financial Projections
sources and uses of funds statement describe how much money a firm needs, where the money will come from, and how the money will be used. The next item to include is an assumptions sheet, which is an explanation of the most critical assumptions on which the financial statements are based. Pro forma financial statements include the pro forma income statements, the pro forma balance sheet, and the pro forma cash flow statement. Most business plan writers interpret or make sens of a firm's historical or pro forma financial statements through ratio analysis.
Presenting the Business Plan to Investors
After writing the business plan, the entrepreneur must prepare to present it effectively to potential investors and possibly others as well. The oral presentation of a business plan typically consists of 20 minutes of formal remarks, accompanied by approximately 12 Power Point slides, and 40 minutes of questions and answers. The presentation should be smooth and well-rehearsed. The slides should be sharp and not cluttered with material.
A business plan is a written narrative that describes what a new business intends to accomplish and how it intends to accomplish it. For most new ventures, the business plan is a dual-purpose document : (there are also the reason for writing business plan)
🙋 A Firm's Employees
A clearly written business plan helps a firm's rand-and-file employees operate in sync and move forward in a consistent and purposeful manner. The existence of a business plan is particularly useful for the functional department heads of a young firm.
🙋 Investors and Other External Stakeholders
To appeal to this group, the business plan must be realistic and not reflective of overconfidence on the firm's part. Investors vary in terms of the reliance they place on formal business plans. Initially, many investors ask for a Power Point deck or the executive summary of a business plan.
A clearly written business plan helps a firm's rand-and-file employees operate in sync and move forward in a consistent and purposeful manner. The existence of a business plan is particularly useful for the functional department heads of a young firm.
🙋 Investors and Other External Stakeholders
To appeal to this group, the business plan must be realistic and not reflective of overconfidence on the firm's part. Investors vary in terms of the reliance they place on formal business plans. Initially, many investors ask for a Power Point deck or the executive summary of a business plan.
Guidelines for Writing a Business Plan
A firm's business plan is typically the first aspect of a proposed venture that an investor will see. If the plan is incomplete or looks sloppy, it is easy for an investor to infer that the venture itself is incomplete and sloppy.
💥 Structure of the Business Plan
A business plan should follow a conventional structure to allows business investors to focus on the parts of a plan that are critical to their decision-making process.
💥 Content of the Business Plan
It must be long enough to provide sufficient information, yet short enough to maintain reader interest. After a business plan is completed, it should be reviewed for spelling, grammar, and to make sure that no critical information has been omitted. And don't forget to place an entrepreneur's contact person inside the business plan.
💨 Style or Format of the Business Plan
it should look sharp but not give the impression that a lot of money was spent to produce it. When writing the plan, avoid getting carried away with the design elements included in word-processing programs, such as boldfaced type, italics, different font sizes and colors, clip art, and so forth. It makes a business plan look amateurish rather than professional. There are three types of business plans :
↬ Summary plan (10-15 pages, for new ventures in the early stages of development).
↬ Full business plan (25-35 pages, for new ventures where they need funding or financing. Its prepared for investor).
↬ Operational business plan (40-100 pages, is meant primarily for an internal audience and provides a blueprint for a company's operations).
A firm's business plan is typically the first aspect of a proposed venture that an investor will see. If the plan is incomplete or looks sloppy, it is easy for an investor to infer that the venture itself is incomplete and sloppy.
💥 Structure of the Business Plan
A business plan should follow a conventional structure to allows business investors to focus on the parts of a plan that are critical to their decision-making process.
💥 Content of the Business Plan
It must be long enough to provide sufficient information, yet short enough to maintain reader interest. After a business plan is completed, it should be reviewed for spelling, grammar, and to make sure that no critical information has been omitted. And don't forget to place an entrepreneur's contact person inside the business plan.
💨 Style or Format of the Business Plan
it should look sharp but not give the impression that a lot of money was spent to produce it. When writing the plan, avoid getting carried away with the design elements included in word-processing programs, such as boldfaced type, italics, different font sizes and colors, clip art, and so forth. It makes a business plan look amateurish rather than professional. There are three types of business plans :
↬ Summary plan (10-15 pages, for new ventures in the early stages of development).
↬ Full business plan (25-35 pages, for new ventures where they need funding or financing. Its prepared for investor).
↬ Operational business plan (40-100 pages, is meant primarily for an internal audience and provides a blueprint for a company's operations).
💨 Recognizing the Elements of the Plan May Change
New insights invariably emerge when entrepreneurs immerse themselves in writing the plan and start getting feedback from others. Because business plans usually change while being written, there is an emerging school of thought that opposes the idea of writing a business plan and advocates experimentation and trial-error learning gleaned through customer feedback over formal planning. The feedback obtained from these key people will cause the plan to change as it's being written.
New insights invariably emerge when entrepreneurs immerse themselves in writing the plan and start getting feedback from others. Because business plans usually change while being written, there is an emerging school of thought that opposes the idea of writing a business plan and advocates experimentation and trial-error learning gleaned through customer feedback over formal planning. The feedback obtained from these key people will cause the plan to change as it's being written.
Outline of the Business Plan
✨ Cover Page and Table of Contents
✨ Executive Summary
is a short overview of the entire business plan, it provides a busy reader with everything she needs to know about the new venture's distinctive nature. So if executive summary is sufficiently convincing, an investor will request a copy of the full business plan.
✨ Industry Analysis
this description should include data and information about various characteristics of the industry. Industry structure refers to how concentrated or fragmented an industry is.
✨ Company Description
the company history section should be brief, but should explain where the idea for the company came from and the driving force behind its inception. A mission statement defines why a company exists and what it aspires to become The products and services section should include an explanation of your product or service (description of how your product or service is unique and how you plan to position it in the marketplace). This section is the ideal place for you to start reporting the results of your feasibility analysis. The current status section should reveal how far along your company is in its development. The legal status and ownership section should indicate who owns the business and how the ownership is split up. Many business plans rely on the establishment of partnerships to make them work.
✨ Market Analysis
the first task that's generally tackled in a market analysis is to segment the industry the business will be entering and then identify the specific target market on which it will focus. This is done through market segmentation, which is the process of dividing the market into distinct segments. The more a start-up knows about the consumers in its target market, the more it can gear products or services to accommodate their needs. Also we have to complete a competitor analysis and estimates a firm's annual sales and market share.
✨ The Economic of the Business
it address the basic logic of how profits are earned in the business and how many units of a business's product or service must be sold for the business to "break even" and then start earning a profit. The costs of goods sold are the materials and direct labor needed to produce the revenue driver. A firm's variable costs vary by sales, while its fixed costs are costs a company incurs whether it sells something or not. A firm's operating leverage is an analysis of its fixed versus variable costs (its getting high when fixed costs > variable costs, and will takes longer to BEP ; its getting low when fixed costs < variable costs). Break even analysis is an analysis of how many units of its product a business must sell before it breaks even and start earning a profit.
✨ Marketing Plan
a firm's marketing strategy refers to its overall approach for marketing its products and services. Price, promotion, and distribution should all be in sync with your positioning and points of differentiation. Also in marketing plan should describe the company's sales process or cycle and specific sales tactics.
✨ Product (or service) Design and Development Plan
it must include development status (product conception ⤳ prototyping ⤳ initial production ⤳ full production). A product prototype is the firs physical manifestation of a new product, often in a crude or preliminary form. A virtual prototype is a computer-generated 3D image of a product or service idea. It displays the idea as a 3D model that can be viewed from all sides and rotated 360 degrees. A final section should describe any patents, trademarks, copyrights, or trade secrets that you have secured or plan to secure relative to the products or services you are developing.
✨ Operations Plan
a useful way to illustrate how your business will be run is to first articulate your general approach to operations in terms of what's most important and what the make-or-break issues are. You can lay out the key back-stage and front stage activities and address the most critical ones. In this section too, you should describe the geographic location of your business and describe a firm's facilities and equipment.
✨ Management Team and Company Structure
the profiles should illustrate why each individual is qualified and will uniquely contribute to the firms's success. If people have worked together before and have decided to partner to start a new firm, it usually means that they get along personally and trust one another. A board of directors is a panel of individuals elected by a corporation's shareholders to oversee the management of the firm. A board of advisors is a panel of experts asked by a firm's management to provide counsel and advice on an ongoing basis. The most effective way to illustrate how a company will be structured and the lines of authority and accountability that will be in place is to include an organizational chart in the plan.
✨ Overall Schedule
✨ Financial Projections
sources and uses of funds statement describe how much money a firm needs, where the money will come from, and how the money will be used. The next item to include is an assumptions sheet, which is an explanation of the most critical assumptions on which the financial statements are based. Pro forma financial statements include the pro forma income statements, the pro forma balance sheet, and the pro forma cash flow statement. Most business plan writers interpret or make sens of a firm's historical or pro forma financial statements through ratio analysis.
Presenting the Business Plan to Investors
After writing the business plan, the entrepreneur must prepare to present it effectively to potential investors and possibly others as well. The oral presentation of a business plan typically consists of 20 minutes of formal remarks, accompanied by approximately 12 Power Point slides, and 40 minutes of questions and answers. The presentation should be smooth and well-rehearsed. The slides should be sharp and not cluttered with material.
✨ Cover Page and Table of Contents
✨ Executive Summary
is a short overview of the entire business plan, it provides a busy reader with everything she needs to know about the new venture's distinctive nature. So if executive summary is sufficiently convincing, an investor will request a copy of the full business plan.
✨ Industry Analysis
this description should include data and information about various characteristics of the industry. Industry structure refers to how concentrated or fragmented an industry is.
✨ Company Description
the company history section should be brief, but should explain where the idea for the company came from and the driving force behind its inception. A mission statement defines why a company exists and what it aspires to become The products and services section should include an explanation of your product or service (description of how your product or service is unique and how you plan to position it in the marketplace). This section is the ideal place for you to start reporting the results of your feasibility analysis. The current status section should reveal how far along your company is in its development. The legal status and ownership section should indicate who owns the business and how the ownership is split up. Many business plans rely on the establishment of partnerships to make them work.
✨ Market Analysis
the first task that's generally tackled in a market analysis is to segment the industry the business will be entering and then identify the specific target market on which it will focus. This is done through market segmentation, which is the process of dividing the market into distinct segments. The more a start-up knows about the consumers in its target market, the more it can gear products or services to accommodate their needs. Also we have to complete a competitor analysis and estimates a firm's annual sales and market share.
✨ The Economic of the Business
it address the basic logic of how profits are earned in the business and how many units of a business's product or service must be sold for the business to "break even" and then start earning a profit. The costs of goods sold are the materials and direct labor needed to produce the revenue driver. A firm's variable costs vary by sales, while its fixed costs are costs a company incurs whether it sells something or not. A firm's operating leverage is an analysis of its fixed versus variable costs (its getting high when fixed costs > variable costs, and will takes longer to BEP ; its getting low when fixed costs < variable costs). Break even analysis is an analysis of how many units of its product a business must sell before it breaks even and start earning a profit.
✨ Marketing Plan
a firm's marketing strategy refers to its overall approach for marketing its products and services. Price, promotion, and distribution should all be in sync with your positioning and points of differentiation. Also in marketing plan should describe the company's sales process or cycle and specific sales tactics.
✨ Product (or service) Design and Development Plan
it must include development status (product conception ⤳ prototyping ⤳ initial production ⤳ full production). A product prototype is the firs physical manifestation of a new product, often in a crude or preliminary form. A virtual prototype is a computer-generated 3D image of a product or service idea. It displays the idea as a 3D model that can be viewed from all sides and rotated 360 degrees. A final section should describe any patents, trademarks, copyrights, or trade secrets that you have secured or plan to secure relative to the products or services you are developing.
✨ Operations Plan
a useful way to illustrate how your business will be run is to first articulate your general approach to operations in terms of what's most important and what the make-or-break issues are. You can lay out the key back-stage and front stage activities and address the most critical ones. In this section too, you should describe the geographic location of your business and describe a firm's facilities and equipment.
✨ Management Team and Company Structure
the profiles should illustrate why each individual is qualified and will uniquely contribute to the firms's success. If people have worked together before and have decided to partner to start a new firm, it usually means that they get along personally and trust one another. A board of directors is a panel of individuals elected by a corporation's shareholders to oversee the management of the firm. A board of advisors is a panel of experts asked by a firm's management to provide counsel and advice on an ongoing basis. The most effective way to illustrate how a company will be structured and the lines of authority and accountability that will be in place is to include an organizational chart in the plan.
✨ Overall Schedule
✨ Financial Projections
sources and uses of funds statement describe how much money a firm needs, where the money will come from, and how the money will be used. The next item to include is an assumptions sheet, which is an explanation of the most critical assumptions on which the financial statements are based. Pro forma financial statements include the pro forma income statements, the pro forma balance sheet, and the pro forma cash flow statement. Most business plan writers interpret or make sens of a firm's historical or pro forma financial statements through ratio analysis.
Presenting the Business Plan to Investors
After writing the business plan, the entrepreneur must prepare to present it effectively to potential investors and possibly others as well. The oral presentation of a business plan typically consists of 20 minutes of formal remarks, accompanied by approximately 12 Power Point slides, and 40 minutes of questions and answers. The presentation should be smooth and well-rehearsed. The slides should be sharp and not cluttered with material.
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