Your Business Plan
An effective business plan describes the nature of your business, how you plan to achieve specific goals for this business and the profits you expect to gain as a result. Typically, it consists of the following elements:
Executive Summary Highlight key strengths of your plan, including where you want to take your company and why your idea will be successful.
Company Description Make this your extended “elevator pitch” to help readers, especially potential investors, quickly grasp the uniqueness of your business.
Market Analysis Show that you understand your industry, target market, customers, competitors and pricing structure.
Organization and Management Describe your company’s organizational structure; introduce ownership and members of your management team.
Service or Product Line Emphasize the benefits you can provide to current and potential customers.
Marketing and Sales Explain how you plan to promote your product/service, create customers and boost sales.
Funding Request Lay out your current and future funding requirements, the intended use of any funds you may receive and types of funding you would prefer.
Financial Projections Summarize your projected income and expenses, past credit history, intended allocation of resources and other financial details.
Appendix Include supporting information/documents: your credit history; letters of reference; resumes of key managers; leases; licenses, permits and/or patents; list of business consultants (attorney, accountant, etc.); relevant research, magazine articles or book references.
I know how to run my business.
Do I really need a written plan?
Yes … and I speak from personal experience. I thought I knew what was needed to ensure business success, and whatever I didn’t know, I would learn along the way. I was wrong and had I taken the time to develop a written plan up front, my failures would have been fewer.
The business plan serves as a road map to follow and is especially valuable when seeking outside investment. It’s not enough to say you know how to run your business; potential investors want to see your actual plans on paper, presented concisely and clearly written.
Ideally, your business plan should be no longer than 10 pages, including financial projections.
Some key questions to answer as you create the plan:
- Do I have the necessary funds to cover startup costs and monthly operating expenses until I reach the point where income matches or exceeds outgo?
- Who is my target customer and what value can I deliver to him or her? What customer needs or wants will I satisfy?
- How will I reach my customers? What is my marketing strategy?
- How much are my customers willing to pay? What are my pricing tactics?
- What resources do I need to produce my product/service, deliver it to market and make a profit? What kind of infrastructure will that require?
- What role will e-commerce play in my business? How will I generate online sales and deliver the goods?
- Who is my competition and what advantages do they offer that I can’t?
- Do I have a competent team in place — an attorney, accountant, insurance agent, etc.?
The process of creating a business plan causes you to think about all of these issues and formulate solutions to potential problems in advance. If you’re not sure how to write a plan, seek help from an experienced entrepreneur such as a counselor at SCORE or the Florida SBDC.
Answer provided by Gray Poehler
Business Counselor, SCORE, Naples Chapter
Tips for Creating a Better Business Plan
1. Package your plan in a loose-leaf binder. It’s easy to make revisions as conditions change.
2. Be thorough but concise. Tell your story with hard facts, not flowery language.
3. Do your homework. Identify your target market and address potential obstacles up front.
4. Use concrete facts to back up claims. “By pricing my product 20% below my competitor XYZ, I’ll recoup costs within six months.”
5. Make it personal. Introduce your management team and stress the specific talents each brings to this new venture.