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The best recipe for an outstanding business plan
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December is National Write a Business Plan Month. If you are opening a new business or keeping your existing business afloat; having a business plan is essential. An outstanding business plan can serve as a small business road map to success, and if necessary attract investors for additional funding. Having a plan ensures that there is a strategic document in place that serves as a guide and illustration for achieving business goals.
What is the recipe for an outstanding business plan?
An outstanding business plan will have the following essential ingredients:
• A dash of Executive Summary ~ This is a brief description (usually 1 to 2 pages) that highlights the 9 essential ingredients below. The executive summary should be very well done if you are seeking funding, sometimes this is only thing potential investors look at. If your summary does not immediately grab their attention your business plan may get trashed!
• 3 tablespoons - Company Description ~ Explain start up plans or history of the company, legal information, and essentially your company is in business.
• 8 oz. - Market Analysis ~ Identify your customers, Who are they? Where do they live? What do they like? What don't they like? How will you reach them? What is the forecast for your market? You should know your customer and their buying habits better than they know themselves. Do your research and document the results in this section of your business plan.
• 4 cups - Organization and Managment ~ Who's in charge? Detail ownership of your company, be sure to include company profiles of key management and their responsibilities.
• 3 1/4 cups - Product Line or Service ~ Describe your product or service highlighting the benefits for future and existing customers. What are you selling?
• 1 lb - Marketing ~ How will you penetrate the market with your product/service to current and potential customers? Detail your overall marketing plan with emphasis on pricing, product/service placement, positioning, and promotions of product.
• 1/2 cup - Competition ~ Who's your closet competition? Identify 5 competitors that offer the same product or service that you do and detail how you will compete with them in the marketplace. Know their strengths and weaknesses.
• 2 cups - Operation ~ Explain how your company operates or functions everyday. How will you deliver your product or service? How many employees will be needed to help carry out your business plans? How will you accept payment and collect money that is due? What equipment and inventory are needed? What is your exit strategy if you were to close your business?
• 1 lb - Financial Data ~ Detail all of the important financial information. If you are an existing business be sure to include; balance sheets, cash-flow statements, income statements, and any other financial statements. For start-ups detail financial projections 3 - 5 years out, calculate start-up costs including, licensing costs, insurance, leases, equipment, etc.
• Sprinkle - Appendix ~ *Add as much or little to taste. Include important documentation such as; credit reports, licenses/patents/permits, resumes of key management, pictures of product, legal documents, magazine articles or other press related materials about product/service, etc.
In a bowl (do your research) and combine detailed information about Company Description, Market Analysis, Organization and Management, Product Line or Service, Marketing, Competition, Operation, Financial Data, and Appendix. Add the Executive Summary to the beginning of the mixture (It's easier to do the Executive Summary after you have gathered all the other information). Once the mixture is accurate and detailed sprinkle over potential investors (if you're trying to obtain funding). Mixture is done cooking when an investor says, "I'm in! Let's do business".
If you’re not trying to obtain funding then place mixture in a secure place, be sure to look at it as often as needed to carry out your businesses' strategic plan. Analyze your plan at the end of the year. Did you make a profit or breakeven? Revise and update any necessary changes when needed.
Keep in mind who your intended audience is if you are seeking funding. Don't bore bankers and investors with fluff and hype, impress them with accurate numbers and research that supports your business claims.
You wouldn't go out of town without directions so don't take your small business on a journey without the roadmap for success. Use this business plan recipe to put your company on a strategic path to success.
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