FloridaTrend.com, the Website for Florida Business

Work the Plan

Every new business has its origins in a dream. The ones that are actually launched and go on to succeed also have a written plan. And while nothing pumps you up quite like sharing your enthusiasm for the dream with friends, family and anyone else you choose to tell, you will need more than bravado and a big idea to succeed. If you truly want to make your dream a reality and be taken seriously by potential funding sources, you will need to put a formal business plan on paper.

 

Business Plan Basics

What Is a Business Plan?

A business plan is a written document describing the nature of your business, how you plan to achieve your specific goals for this business and the profits you expect to gain as a result. Ideally, every business should have a written plan to use as an operational guide and as a tool for communicating its purpose and strategies to others. In that regard, simply putting your thoughts on paper is a useful exercise to help solidify your dream.

Why is a business plan important? If you intend to seek outside funding, a business plan is absolutely required, and it must encompass these four basic topics:

What am I selling?

Who will buy my product or service? Who are my competitors?

How much will people be willing to pay for my product or service? Can I make a profit at this?

Do I/we have what it takes to succeed?

Think of your business plan as a living document. Project your plans 3-5 years ahead, but allow for revisions as your goals change.

 

The Components

How to Structure Your Plan

A business plan is essentially a road map to follow on your journey to business success. Every formal business plan should include the following titled sections:

Highlight the strengths of your plan, including where you want to take your company and why your idea will be successful.

Make this your extended “elevator pitch” to help readers, especially potential investors, quickly grasp the uniqueness of your business.

Show that you understand your industry, target market, customers, competitors and pricing structure.

Describe your company’s organizational structure and introduce ownership and members of your management team.

Emphasize the benefits you can provide to current and potential customers.

Explain how you plan to promote your product/service, create customers and boost sales.

Lay out your current and future funding requirements, the intended use of any funds you may receive and the types of funding you would prefer.

Summarize your projected income and expenses, past credit history, intended allocation of resources and other financial details.

Supporting information and documents such as: your credit history; letters of reference; resumes of key managers; leases; licenses, permits and/or patents; a list of business consultants such as your attorney and accountant; and relevant research, magazine articles or book references.

Start Here

Writing a business plan is not as difficult as it sounds and there is no need for you to reinvent the wheel.

You can access the list of business plan components and individual articles describing what to cover within each topic at sba.gov/writing-business-plan.

And if you’d like more personalized help with your plan, training and guidance are available through the Florida SBDC Network at FloridaSBDC.org.

7 Secrets for a Better Business Plan

Business plans should be easy to change as new facts emerge and early ideas are rejected in favor of better ones. Use 8.5" x 11" paper and package your plan in a binder that allows you to add, subtract and revise as needed.

Tell your business story clearly and concisely. Potential investors want hard facts not flowery language.

Business plans are primarily used to entice investors, so prove that you’re worthy of their consideration: identify your target market; tell how your product or service is unique; and provide details about your competitors’ strengths, weaknesses and estimated market share.

Savvy investors are adept at spotting weak points in business planning. Don’t give them a reason to deny funding by pretending that obstacles don’t exist. Point them out instead. Then present a detailed plan for how you would address each problem.

Potential investors want to know “What’s in it for me?” So focus on benefits rather than features, and use facts to back up your claims. Instead of “ABC product is priced significantly less than its closest competitor, XYZ,” try this: “By pricing ABC product 20% below XYZ, we’ll turn a quicker profit and you’ll recoup your investment within six months.”

Introduce your management team. Describe their previous accomplishments and show how they will bring their talent to this new venture.

It’s natural to be so excited about your product or service that you want to sell it to everyone, everywhere. Beware! Attempting to reach multiple markets right out of the gate may actually hurt more than help your sales. Focus instead on one primary market — your main strength — and give it all you’ve got. You can broaden your reach later.