The most important function of a business plan is to create interest among investors so that they write a check. In achieving this goal, business plan writers are often challenged by determining the proper level of optimism in their plan. That is, they must create a compelling story to investors while maintaining credibility.
Optimism shows investors that a company is confident about the market opportunity, its ability to execute on the opportunity, etc. Over-optimism, however, leads investors to believe that the management team does not fully understand the opportunity or the tough road ahead. As such, business plans must be sure to limit over-optimism and show investors they are realistic and credible.
Realism, the opposite of over-optimism, should be used in business plans to portray sobriety and credibility to investors. Realism should manifest itself in management team bios that tell the actual accomplishments of managers, rather than fluff. It should manifest itself in credible market forecasts and sober assumptions of the company’s growth.
While business plans must excite investors so they take action, if they are too optimistic, investors will discount their merit. Conversely, if they are too sober, investors may not feel they will get an adequate return on their investment. As such, business plans should present a compelling, optimistic picture, but continuously refer to hard facts and realistic assumptions to build credibility and genuine excitement
Tuesday, September 23, 2008
Business Plans
Way back in business school we had to churn out business plans every semester. As soon as the assignment would drop we would be scrambling for information. Start the number crunching game, do the analysis, do some mental planning and write business plans.
Then we graduated and got jobs. But, we still have to write business plans.
I came across a collection called Business Plans from 'Business-planning-4-you' (http://business.marc8.com/ebook-info.php/name/business_plans/toc_id/1-0-1-5) a few weeks ago. The title caught my eye as I wondered who would be giving away business plans and how many? How would they manage the number of industries? I wanted to find out more.
- It seems that they have over 1500 readymade business plans in their database.
- Covers a wide range of industries: from Abattoir Business Plan to Zen Practitioner Business Plan.
- The cost is $50 as of this writing. That makes it 3 cents per business plan (50/1500 = 0.03).
- They offer about 24 extra bonuses
I know I would be happy with the business plan templates that I could modify and add my own thoughts. I think it would be like instant soup. You have bought the basic ingredient, but you still need to provide a little bit more like hot water and a bowl.
Though I haven't tried the collection myself it looks quite good. I think this would be useful if you are in business school, early part of your career, or even a seasoned business man venturing into new areas.
Till next week and all the best with your business planning!
Then we graduated and got jobs. But, we still have to write business plans.
I came across a collection called Business Plans from 'Business-planning-4-you' (http://business.marc8.com/ebook-info.php/name/business_plans/toc_id/1-0-1-5) a few weeks ago. The title caught my eye as I wondered who would be giving away business plans and how many? How would they manage the number of industries? I wanted to find out more.
- It seems that they have over 1500 readymade business plans in their database.
- Covers a wide range of industries: from Abattoir Business Plan to Zen Practitioner Business Plan.
- The cost is $50 as of this writing. That makes it 3 cents per business plan (50/1500 = 0.03).
- They offer about 24 extra bonuses
I know I would be happy with the business plan templates that I could modify and add my own thoughts. I think it would be like instant soup. You have bought the basic ingredient, but you still need to provide a little bit more like hot water and a bowl.
Though I haven't tried the collection myself it looks quite good. I think this would be useful if you are in business school, early part of your career, or even a seasoned business man venturing into new areas.
Till next week and all the best with your business planning!
Business Plan
Business Plan - A is a short brief that explains how a business owner, director or entrepreneur plans to orchestrate an enterprising effort that carries out the actions that are necessary in order for the effort to succeed. Basically, a business plan is the written description of a business's business model. Those involved in the planning process and management are the most likely to use a business plan. Business plans are also used when approaching potential lenders or investors that have an interest in a particular business venture.
There is a great deal of subject matter that is addressed in a business plan including a number of sub-plans. There are a number of business plan models that can be used to create a new business plan from or there are software options like the Business Plan Pro 2004. If a business is not using a business plan software program, they will most likely follow what is considered to be a typical business plan format.
About the author:
Business Plan
A business plan is a short brief that explains how a business owner, director or entrepreneur plans to orchestrate an enterprising effort that carries out the actions that are necessary in order for the effort to succeed. Basically, a business plan is the written description of a business’s business model. Those involved in the planning process and management are the most likely to use a business plan. Business plans are also used when approaching potential lenders or investors that have an interest in a particular business venture.
There is a great deal of subject matter that is addressed in a business plan including a number of sub-plans. There are a number of business plan models that can be used to create a new business plan from or there are software options like the Business Plan Pro 2004. If a business is not using a business plan software program, they will most likely follow what is considered to be a typical business plan format.
Most business plans will begin with an executive summary that describes the basics of the business model as well as comprehensive explanations for the scheme of the plan. Next, the business plan will move into the background of the plan with a brief history of the company especially if it a newer company and background information that includes how long the company has been in business, the current number of employees, annual sales figures, the location of all the business’s facilities and a complete description of the business ownership.
Next, most business plans will detail what will be involved in their marketing efforts including the competitive environment, customer priorities, product, pricing and promotion strategies as well as the distribution strategy. The explanation of production and manufacturing should include all work procedures as well as production facility requirements, inventory requirements, equipment needs and fixed cost apportioning. Finance details the source of all funds, anticipated returns, a formal monthly cash flow statement and a list of all existing loans and liabilities. Human resources points out where responsibilities are assigned, training that will be required, necessary skills, union issues, salaries and new hiring information. Other areas that may need to be covered depending on each individual situation can include legal strategies, product research and development, marketing research and any inter-company workings.
For those who feel that they cannot complete a business plan on their own or simply don’t have the time that is needed to put together an effective business plan, there are some software options like the Business Plan Pro 2004. The Business Plan Pro creates a complete and professional looking business plan that is sure to clarify the workings of a business and impress those who see it for understanding and funding purposes. The Business Plan Pro 2004 provides preformatted tables, color charts and graphs, graphic forecaster, built-in formatting, Power Point templates and a great deal more. By using software like the Business Plan Pro 2004, the user is guaranteed to have an impressive and professional looking business plan to present to people of import.
There is a great deal of subject matter that is addressed in a business plan including a number of sub-plans. There are a number of business plan models that can be used to create a new business plan from or there are software options like the Business Plan Pro 2004. If a business is not using a business plan software program, they will most likely follow what is considered to be a typical business plan format.
About the author:
Business Plan
A business plan is a short brief that explains how a business owner, director or entrepreneur plans to orchestrate an enterprising effort that carries out the actions that are necessary in order for the effort to succeed. Basically, a business plan is the written description of a business’s business model. Those involved in the planning process and management are the most likely to use a business plan. Business plans are also used when approaching potential lenders or investors that have an interest in a particular business venture.
There is a great deal of subject matter that is addressed in a business plan including a number of sub-plans. There are a number of business plan models that can be used to create a new business plan from or there are software options like the Business Plan Pro 2004. If a business is not using a business plan software program, they will most likely follow what is considered to be a typical business plan format.
Most business plans will begin with an executive summary that describes the basics of the business model as well as comprehensive explanations for the scheme of the plan. Next, the business plan will move into the background of the plan with a brief history of the company especially if it a newer company and background information that includes how long the company has been in business, the current number of employees, annual sales figures, the location of all the business’s facilities and a complete description of the business ownership.
Next, most business plans will detail what will be involved in their marketing efforts including the competitive environment, customer priorities, product, pricing and promotion strategies as well as the distribution strategy. The explanation of production and manufacturing should include all work procedures as well as production facility requirements, inventory requirements, equipment needs and fixed cost apportioning. Finance details the source of all funds, anticipated returns, a formal monthly cash flow statement and a list of all existing loans and liabilities. Human resources points out where responsibilities are assigned, training that will be required, necessary skills, union issues, salaries and new hiring information. Other areas that may need to be covered depending on each individual situation can include legal strategies, product research and development, marketing research and any inter-company workings.
For those who feel that they cannot complete a business plan on their own or simply don’t have the time that is needed to put together an effective business plan, there are some software options like the Business Plan Pro 2004. The Business Plan Pro creates a complete and professional looking business plan that is sure to clarify the workings of a business and impress those who see it for understanding and funding purposes. The Business Plan Pro 2004 provides preformatted tables, color charts and graphs, graphic forecaster, built-in formatting, Power Point templates and a great deal more. By using software like the Business Plan Pro 2004, the user is guaranteed to have an impressive and professional looking business plan to present to people of import.
Business Plans - What Do They Include?
Ok... so you've finally reached that stage in the development of your home business to get started. You've done the research, you have a game plan and you're ready to go except for one small detail... you need money. Whether it comes from a loan or from investors it doesn't matter but you need a good dose of seed money to put all your hard work and planning into action. However, regardless of who hears your money pitch before they give you a dime they will want see your business plan.
Business Plan - What Is It?
A good way to think of a business plan is that's it's a document that provide answers to the type of questions anyone who may provide financing would like to know about your home business. You will not get outside funding without one, because the people giving you the funding will insist on one because it helps them to know that you’ve thought through what you’re proposing to do. A business plan says to them... "I’ve considered this from every angle, and here’s what I’ve come up with".
Business Plan - What Does It Include?
What is your product or service? This is the first question every business plan should answer. You must explain in the clear, concise language what in the world you plan to produce or what service you plan to provide. You will also want to include why you've chosen this particular product or service.
Who are Your Customers? After you've explained your product or service, the next step is to identify who you plan to sell your product or service too and why. The demographics (age, sex, language, country, state or city, income, etc.) You need to clearly identify your customers in order to properly target your advertising, packaging, pricing, et.
What Makes You Different? You need to identify the "primary factors" that will make your business different than other businesses you'll be competing with. What niche are you filling that they are not or what do you plan to do to fill a particular void in the market that you've identified?
What are Your Expenses? Your start-up expenses include any equipment that you need before you can get up-and-running, while your day-to-day expenses are staff costs and supplies.
Following is a Simplified Example of Business Plan
This a a simplified and shortened version of a business plan. In the real world... each one of the following sections would be 1 - 2 pages in length. That being said... in most instances it's better to be as brief as possible. Only add information if your potential backers request it. It's a bad idea to go into too much detail in your plan. You’re not trying to explain everything down to the nth detail, just the basics of the business and why they should give you the money you need to launch it. And always focus on profit.
Catering Plus
Nature of Business: The business will be a home-based catering company, producing luxury food for special occasions such as birthdays and weddings. We will provide a comprehensive catering service, while specializing in high end customized cakes, which have a higher profit margin than other foods.
Target Market: Our catering business will be aimed at middle-class customers who desire a top-of-the-line catering but must operate on a budget. Our initial market area will consist of Mytown and the affluent area of Theretown.
Key Factors: We will only use commerical grade ingredients purchased from wholesalers and provide top quality design and service. This will allow us to provide food that looks tastes great, while keeping costs as low as possible.
Expenses: Beause I will be using my kitchen and making the food myself, there are only two real expenses: The purchase of an industrial grade mixer and then the day-to-day cost of supplies. I've attached a suppliers’ letter listing prices. Our research has shown that this supplier offers the best value for start-ups.
To wrap it up, you should include a breakdown of both projected profit and loss per month (in graph form)for the first year in business. Show one-time and day-to-day expenses versus projected profit to indicate how you will pay-off your loan. Your business plan should show you making enough of a profit each month to live on – if it doesn’t, then it may be considered unfeasible.
Study a Few Real-World Business Plans
The best way to get a real a feel for the dos and do nots of a business plans is to find real-world plans that have already been approved and study them. A good place to start is the internet. Once you’ve studied a few, you will get a better feel for how much work will be involved in putting your business plan together. Remember, until your business exists for real, the business plan is the only tool you have to sell prospective backers on how great your business is going to be
Business Plan - What Is It?
A good way to think of a business plan is that's it's a document that provide answers to the type of questions anyone who may provide financing would like to know about your home business. You will not get outside funding without one, because the people giving you the funding will insist on one because it helps them to know that you’ve thought through what you’re proposing to do. A business plan says to them... "I’ve considered this from every angle, and here’s what I’ve come up with".
Business Plan - What Does It Include?
What is your product or service? This is the first question every business plan should answer. You must explain in the clear, concise language what in the world you plan to produce or what service you plan to provide. You will also want to include why you've chosen this particular product or service.
Who are Your Customers? After you've explained your product or service, the next step is to identify who you plan to sell your product or service too and why. The demographics (age, sex, language, country, state or city, income, etc.) You need to clearly identify your customers in order to properly target your advertising, packaging, pricing, et.
What Makes You Different? You need to identify the "primary factors" that will make your business different than other businesses you'll be competing with. What niche are you filling that they are not or what do you plan to do to fill a particular void in the market that you've identified?
What are Your Expenses? Your start-up expenses include any equipment that you need before you can get up-and-running, while your day-to-day expenses are staff costs and supplies.
Following is a Simplified Example of Business Plan
This a a simplified and shortened version of a business plan. In the real world... each one of the following sections would be 1 - 2 pages in length. That being said... in most instances it's better to be as brief as possible. Only add information if your potential backers request it. It's a bad idea to go into too much detail in your plan. You’re not trying to explain everything down to the nth detail, just the basics of the business and why they should give you the money you need to launch it. And always focus on profit.
Catering Plus
Nature of Business: The business will be a home-based catering company, producing luxury food for special occasions such as birthdays and weddings. We will provide a comprehensive catering service, while specializing in high end customized cakes, which have a higher profit margin than other foods.
Target Market: Our catering business will be aimed at middle-class customers who desire a top-of-the-line catering but must operate on a budget. Our initial market area will consist of Mytown and the affluent area of Theretown.
Key Factors: We will only use commerical grade ingredients purchased from wholesalers and provide top quality design and service. This will allow us to provide food that looks tastes great, while keeping costs as low as possible.
Expenses: Beause I will be using my kitchen and making the food myself, there are only two real expenses: The purchase of an industrial grade mixer and then the day-to-day cost of supplies. I've attached a suppliers’ letter listing prices. Our research has shown that this supplier offers the best value for start-ups.
To wrap it up, you should include a breakdown of both projected profit and loss per month (in graph form)for the first year in business. Show one-time and day-to-day expenses versus projected profit to indicate how you will pay-off your loan. Your business plan should show you making enough of a profit each month to live on – if it doesn’t, then it may be considered unfeasible.
Study a Few Real-World Business Plans
The best way to get a real a feel for the dos and do nots of a business plans is to find real-world plans that have already been approved and study them. A good place to start is the internet. Once you’ve studied a few, you will get a better feel for how much work will be involved in putting your business plan together. Remember, until your business exists for real, the business plan is the only tool you have to sell prospective backers on how great your business is going to be
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