But, how do you write a business plan? Research, research, research. Read everything you can about your industry and talk to your audience. Determine the purpose of your plan. Create a company profile. However, your profile can be used to describe your company in your business plan. Having your profile in place makes this step a whole lot easier to compose.
Document all aspects of your business. Investors want to make sure that your business is going to make them money.
Because of this expectation, investors want to know everything about your business. Infographic 5. Have a strategic marketing plan in place. A great business plan will always include a strategic and aggressive marketing plan. Where will this business come from?
Because once you know the details of your business inside and out, you will be better prepared to write your executive summary. Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan.
Ideally, your executive summary will be one to two pages at most, designed to be a quick read that sparks interest and makes your investors feel eager to hear more. The critical components of a winning executive summary: One sentence business overview At the top of the page, right under your business name, include a one-sentence overview of your business that sums up the essence of what you are doing.
This can be a tagline, but is often more effective if the sentence describes what your company actually does. This is also known as your value proposition. Problem In one or two sentences, summarize the problem you are solving in the market. Every business is solving a problem for its customers and filling a need in the market. Solution This is your product or service. How are you addressing the problem you have identified in the market?
Target market Who is your target market , or your ideal customer? How many of them are there? Competition How is your target market solving their problem today? Are there alternatives or substitutes in the market? Company overview and team Provide a brief overview of your team and a short explanation of why you and your team are the right people to take your idea to market. Investors put an enormous amount of weight on the team—even more than on the idea—because even a great idea needs great execution in order to become a reality.
Financial summary Highlight the key aspects of your financial plan, ideally with a chart that shows your planned sales, expenses, and profitability. If your business model i. Instead, just include a short statement indicating how much money you need to raise. If you can show that your potential customers are already interested in—or perhaps already buying—your product or service, this is great to highlight. In that case, you can dispense with details about the management team, funding requirements, and traction, and instead treat the executive summary as an overview of the strategic direction of the company, to ensure that all team members are on the same page.
Opportunity There are four main chapters in a business plan—opportunity, execution, company overview, and financial plan. People who read your business plan will already know a little bit about your business because they read your executive summary. The problem and solution Start the opportunity chapter by describing the problem that you are solving for your customers.
What is the primary pain point for them? How are they solving their problems today? Defining the problem you are solving for your customers is far and away the most critical element of your business plan and crucial for your business success.
To ensure that you are solving a real problem for your potential customers, a great step in the business planning process is to get away from your computer and actually go out and talk to potential customers. Validate that they have the problem you assume they have, and then take the next step and pitch your potential solution to their problem.
Is it a good fit for them? Your solution is the product or service that you plan on offering to your customers. What is it and how is it offered? How exactly does it solve the problem that your customers have? For some products and services, you might want to describe use cases or tell a story about a real user who will benefit from and be willing to pay for your solution. Depending on the type of business you are starting and the type of plan you are writing, you may not need to go into too much detail here.
No matter what, you need to know who your customer is and have a rough estimate of how many of them there are. Market analysis and market research If you are going to do a market analysis , start with some research. First, identify your market segments and determine how big each segment is.
A market segment is a group of people or other businesses that you could potentially sell to. While it would be tempting for a shoe company to say that their target market is everyone who has feet, realistically they need to target a specific segment of the market in order to be successful. Perhaps they need to target athletes or business people who need formal shoes for work, or perhaps they are targeting children and their families. Learn more about target marketing in this article.
When identifying target markets, a classic method is to use the TAM, SAM, and SOM breakdown to look at market sizes from a top-down approach as well as a bottom-up approach.
Are they growing or shrinking? Key customers The final section of your target market chapter should discuss key customers. This section is really only required for enterprise large companies that have very few customers. Most small businesses and typical startups can skip this and move on.
But if you selling to other businesses B2B , you may have a few key customers that are critical to the success of your business, or a handful of important customers that are trend leaders in your space. Competition Immediately following your target market section, you should describe your competition. What are your competitive advantages over the competition? The most important thing to illustrate in this section of your business plan is how your solution is different or better than other offerings that a potential customer might consider.
Investors will want to know what advantages you have over the competition and how you plan on differentiating yourself. The simple fact is that all businesses have competition. Instead, Ford was competing against other modes of transportation—horses, bikes, trains, and walking.
On the surface, none of these things look like real direct competition, but they were how people were to solving their transportation problems at that time.
Future products and services All entrepreneurs have a vision of where they want to take the business in the future if they are successful. The focus should be on bringing your first products and services to market. Marketing and sales plan The marketing and sales plan section of your business plan details how you plan to reach your target market segments also called target marketing , how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.
Before you even think about writing your marketing plan, you must have your target market well-defined and have your buyer persona s fleshed out. Without truly understanding who you are marketing to, a marketing plan will have little value. Your positioning statement The first part of your marketing and sales plan is your positioning statement. Positioning is how you will try and present your company to your customers.
Are you the low-price solution, or are you the premium, luxury brand in your market? How are your competitors positioning themselves?
How do you plan on differentiating from the competition? In other words, why should a customer choose you instead of someone else? Where do you see your company in the landscape of other solutions? You just need to explain where your company sits within the competitive landscape and what your core value proposition is that differentiates your company from the alternatives that a customer might consider.
You can use this simple formula to develop a positioning statement: For [target market description] who [target market need], [this product] [how it meets the need]. Unlike [key competition], it [most important distinguishing feature]. Unlike [name omitted], LivePlan creates a real business plan, with real insights—not just cookie-cutter, fill-in-the-blank templates. Your positioning strategy will often be a major driver of how you price your offerings. Price sends a very strong message to consumers and can be an important tool to communicate your positioning to consumers.
If you are offering a premium product, a premium price will quickly communicate that message to consumers. Deciding on your price can feel more like an art than a science, but there are some basic rules that you should follow: Covering your costs. There are certainly exceptions to this, but for the most part, you should be charging your customers more than it costs you to deliver your product or service. Primary and secondary profit center pricing. Your initial price may not be your primary profit center.
For example, you may sell your product at, or even below, your cost, but require a much more profitable maintenance or support contract to go along with the purchase. Matching the market rate.
Your prices need to match up with consumer demand and expectations. Price too high and you may have no customers. Price too low and people may undervalue your offering. You can establish your pricing based on several factors. You can look at your costs and then mark up your offering from there.
How will those relationships impact your day-to-day operations? Accuracy is key, so carefully analyze your past financial statements before giving projections. Another method is to look at the current landscape of competitors and then price based on what the market is expecting. Traction could be some initial sales, a successful pilot program, or a significant partnership. Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. You can always put supporting information or other important details in the appendix.
People who read your business plan will already know a little bit about your business because they read your executive summary. What niche will you attempt to carve out? And so on
Ideally, your executive summary will be one to two pages at most, designed to be a quick read that sparks interest and makes your investors feel eager to hear more. In short: Who are your customers? First, identify your market segments and determine how big each segment is. It also walks you through what each page of your business plan should contain. For the most part, service companies can skip this piece and move on. While your best option may be to search for templates in the form you prefer, there are also plenty of general tools out there to suit any business.
Content marketing is what Bplans is all about. The reasoning for that is twofold: First, you want your business plan to be read and no one is going to read a page or even page business plan. It contains important information including its registered name, address of any physical locations, names of key people in the business, history of the company, nature of the business and more details about products or services that it offers or will offer. If you can show that your potential customers are already interested in—or perhaps already buying—your product or service, this is great to highlight. Creating your plan is easy, as the app leads you through the process.
Then focus on providing detail and backup for your marketing plan. Another way to think about key assumptions is to think about risk. Financial summary Highlight the key aspects of your financial plan, ideally with a chart that shows your planned sales, expenses, and profitability. Small Business Development Centers : SBDCs exist in every state, and are staffed by advisors with expertise in business plan development and other key issues affecting entrepreneurs. In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.
You will still need to cover the logistics of how you will get your products to your customers from your warehouse, but a direct distribution model is usually fairly simple. Business plan apps Today, there's an app for everything -- including creating a business plan. Again, potential spending power is an important number to quantify. What are your competitive advantages over the competition? How exactly does it solve the problem that your customers have? See your industry through their eyes.
When attached to a bCPAP setup, our product provides non-invasive dual pressure ventilation. Price, service, convenience, extensive inventory are all areas where you may be vulnerable. Instead, Ford was competing against other modes of transportation—horses, bikes, trains, and walking. Value pricing. Marketing--whether advertising, public relations, promotional literature, etc--is an investment in the growth of your business. Since customers currently rent bicycles in the local town of Harrisonburg, road signage will communicate our value proposition to all potential customers.
Our next closest competitor is located over miles away.