04/ 25/ 2007
Whether you're formalizing your dog-walking service or getting ready to sell a product you're finally ready to bring to the market, writing a business plan will be one of the first steps on your journey to entrepreneurial success. While a business plan is essential for securing loans or gaining the interest of a backer, they're also a useful personal tool you can use to concretely shape your business goals. Here are a few things to include on your first plan:
The business
Describe the business, your location (home business, storefront, online), and the products or services you offer in concrete, straightforward terms. While you want to stress any unique or innovative qualities your business may possess, stay away from hyperbole. Especially if you're hoping to gain backing through your business plan, banks and investors will surely be skeptical if you claim your business is foolproof, or that you're offering a product no one will be able to live without. Of course, you shouldn't sell yourself short, either. Allow the plan to convey your enthusiasm about your business.
Market research
Your market research should include a fairly detailed description of the field you're entering and convince your backers that no matter how crowded it may be, there's room for your business. Explain your competition. Are they local, or will you be competing online with businesses across the country? What are their strengths and weaknesses? Most importantly, what can you offer customers that these competitors cannot?
Another important part of your market research is customer demographics. Describe the age groups you serve and their affluence. Be sure to stress if you're part of a market with growth potential, both in the field and the range of customers you serve. Explain the need you'll be fulfilling for customers, and why they will choose to do business with you. If you already have a dedicated customer base (even if so far it's only the people in your dorm), be sure to mention this. The more concrete indicators of success you can give, the better.
The personnel
Explain your qualifications for running your business. Mention experience in the field, business degrees and leadership qualifications. If you're young and somewhat inexperienced, it might be a good idea to mention if you have a relationship with a business mentor or advisor. If you plan on hiring workers or already have, also include a staffing plan, detailing the positions you will need to fill to successfully run your business. If you've already put together a staff, detail their special attributes and qualifications.
The assets
List any physical properties your business already possesses or will need to purchase in order to run. Large office equipment, such as computers and printers, store fixtures, delivery vehicles and so on, should all be included.
The money
Ultimately, this will be the section of your business plan in which the banks or investors will have the most interest. Be specific about how much money you'll need to get your business started, and how the money will be used. You will need to show how much money your business needs to make to break even as well as provide projected income figures. Explain the factors you use in your projected analysis and make sure the projected figures, while not selling yourself short, do not appear overly optimistic or unreachable. You will also need to analyze the projected cash flow of your business, assuring investors you understand how to keep enough capital at hand to keep your business going.
While the thought of writing your business plan may be intimidating, there are many places you can turn for help. There are various software packages especially useful in generating charts and graphs; if you have a business mentor or friends who own small businesses, ask if they'd be willing to show you their business plans or help you compose yours. Just as you should purchase a good map before setting out on an extensive road trip, you should have a strong business plan to guide you through your early experiences as a small-business owner.
