It should be pretty clear just how important a business plan is. In the article titled “How important is a business plan, really?‘ the advantages are illustrated. So, now that we agree its good to have one, let’s get on with creating one.
Below is an example structure which has been successfully implemented and achieved financial funding. Remember, its not so much the structure as to what you include within the structure. Take your time in creating a business plan. Its not something that should be rushed.
Contents of a business plan
The majority of business plan have, more or less, the same structure which includes:
– An Executive Summary or Introduction (depending on the phase of business you are in).
– The business idea
– The business location /Region
– Your target group
Normally the above is briefly included just after the Executive Summary/Introduction but you’ll need to go into more detail later in the following business plan chapters. These include:
The vision is the story you are telling about your business. It also includes what you wish to provide in terms of meaning and service as well as where you aim to go with this business. This vision refers not only to your business as a concept but also what you wish to bring to your clients or customers.
The client/company formula explains in detail, what you are offering specifically. An illustrator, for example, can specify what kind of illustrations they do and what benefits his/her illustration offers the customer as opposed to another illustrator. Another example would be that of a web shop owner. How can the web shop owner create a client/company formula that makes their particular web shop more attractive than anothers? Hint: Think of things you can offer which help the client or customer more.
Product & Price Overview
Its important to add a comparison model within the business plan. The readers of your business plan want to know and understand where you’ve based your price on and if you’re competitive enough.
How are your prices been built up? Do you offer different pricing models or just one? What about memberships or subscriptions? Whichever structure your choose, do make sure you support it with a sound argument.
Promotion, Promotion, Promotion! Every business, big or small needs promotion, There are several options which you can use for your small business but not all methods will work. In this section you need to explain which promotional methods you’ll be using. You’ll also need to include why you have chosen these and how they will be used. Also think about cross promotion ideas. You don’t have to do every thing alone and sometimes working together will help increase your reach.
Staff & Personnel
Even if you’ve decided to work alone, you’ll still need to include this within your business plan. If you have written an ambitious plan, then do remember that working alone will still have to be feasible. If you’ve written a ambitious plan that isn’t achievable for one person, then your business plan will look unrealistic and may get rejected based on this. Keep it real. There are only 40 hours in a week and even though you may be prepared to work all the hours in a day, you cannot build a business plan based on excessive working conditions. Even business owners need to sleep!
If you do need a team, then you’ll need to specify who you need and why you need them. What are they going to be doing? What kind of experience will they need to have and how many hours will you need them for? What’s also important is how much they will cost. Once again, you need to back this up. You don’t want to be paying too much whilst at the same time if you pay peanuts you will get monkeys.
So where do you want to go with your business and then not only in terms of a general vision but you should define your Qualitative and Quantitative objectives here too. What’s the difference? Qualitative objectives can be seen as the type of non-measurable impact you would like to make, such as trust or be seen as a company that produces quality products or services. You should also set yourself some Quantitative objectives. These help you steer a path of growth. Quantitative objectives can be an increase in clients, products or amount of visitors to your website. For every objective there should also be timescale for you to achieve this, preferably.
Product & Service
How do your products and services compare to your competitors? This section is not another illustration of what your product is, its actually you taking product or service under the microscope and examining it, butt naked! By doing this you get a better overview of what you are offering and are able to fine tune as you go along, if you don’t like what you’ve learnt.
Every business has a target group, but how well do you know yours? Target groups are split up from male, female, teenagers, children and then to age sections such as 18 – 34 and then income groups. The better you know your target group the better it is for you. You’ll be able to market your product and service more effectively in this way. Do also bear in mind that you may have an indirect target group too. For example, if your target group is teenagers aged between 13 and 17 then your indirect target group is likely to be their parent too. Why? Its simple, teenagers are easily influenced and consume large amount of media content. On the other side teenagers are more than often, financially weak. They therefore rely on their parents for financial support. Remember to keep your target groups broad, without being too broad.
What does the market look like in your field of business? Do you have competitors or are you unique? There is not one business that is unique and this included you too. If you think you do not have competitors and include this in your plan then this shows that you’ve not done your research. Don’t make this mistake! Even if there is no other business that offers the exact same as you, you should still include a competitor who offers a similar service, or the same service on a different scale or to a different target group. As a business owner you focus is on your business, but to succeed, your focus should also be on what others are doing and how they are doing it. Its a great way to learn and it keeps you on your toes.
Prospects are important. Its good to know you have leads which can be followed up and where potential business can flow from. But what about new prospects? How will you go looking for them? In this section you will need to include who your prospects are, what chance percentage you give that prospect turning into a client and also how you intend to create new prospects.
How are you currently positioned in the marketing? If you are a new business then the question is how do you want to position yourself against your competition and for your customer or client. Positioning is sometimes referred to as branding. Branding is the feeling a customer or client has about you, your service/product/company. How do you want to be thought of to your clients? This is your positioning, so think about it!
The following article ‘Part 2 – What to include in a business plan‘ includes the remaining sections of a business plan.