We've all seen the hype: "We'll put your plan in front of thousands of investors!" "We'll write you an award-winning online business plan!" "Only $3,000 for thousands of investors to learn about your company!"
I cringe every time I see one of these ads. Vultures are preying on honest business people who want to fund their businesses. Here are some ways to spot them:
1. "Only qualified investors see your business plan." Yeah, sure. And who "qualifies" them? Have a friend try to sign up as an investor (that part is usually free). How is she "qualified"? Is there a background check? Does she submit a financial statement? Odds are that she will be asked to do nothing more than sign a statement that she has a certain net worth. That's no "qualification" in my book. So who are these "investors"? Who knows. One could be your strongest competitor.
2. "You approve anyone who sees your business plan." Okay. So what are you going to do to qualify the potential investor? Are you going to run a background check? ask for ID? ask for tax returns? or just be so happy that anyone wants to see your business plan that you jump on the idea? (That's how these scams get away with charging thousands of dollars -- too many entrepreneurs are desperate for funding.)
3. "It's only $500 (or $300 or $100) to register." What does it matter if it's free? If it is diverting your time and energy and resources away from finding a viable investor, it's not worth it.
4. "Your idea is great, but we need to put it into our format. This will only cost $800." Don't walk -- run from these guys.
5. "Your idea is so great that we want to invest $2,000 in it." (That's after you spend $5,000 to put it into "their" system.) Do I really need to comment on this?
6. "Talk with a satisfied customer, or 2 or 3." Here's this entrepreneur who just got $2 million in funding, and he has nothing better to do than sell the web scam to you? Trust me, entrepreneurs who just get funded barely have time to eat, let alone talk.
7. "Look at all these written testimonials." This is harder to disprove because the testimonials look so real -- even the companies might be real. But unless the testimonials, and the companies, can be verified independently, I wouldn't trust them. And I'll lay odds that they cannot be verified independently.
There is one huge exception to this: ACE-Net (http://activecapital.org). This is more properly the Access to Capital Electronic Network run by venture capitalists, institutional investors and individual accredited investors. It was developed by the U.S. Small Business Administration's Office of Advocacy to encourage the creation of a national marketplace for investors to find and invest in equity offers by small companies.
ACE-Net isn't for all companies. Those seeking under $1 million will probably find the paperwork daunting. Those seeking over $5 million won't qualify. There are special qualifications, and of course lots of forms to fill out -- but nothing like the forms required for a formal initial public offering.
But for those who do qualify, it's an amazing tool in raising financing. Spend some time with the website and the forms, and see if your local SBA office can put you in touch with another company that went through the process.
As with any investor tool, don't rely exclusively on ACE-Net. Use it in conjunction with your personally developed targeted funding search. This, combined with an exceptional business plan, doesn't guarantee success but it places your company head and shoulders above all the rest.
Friday, October 17, 2008
Startup Advice: Advice from Experts to Start your own Business Plan
Most entrepreneurs get paranoid over the idea of starting a business. With so many federal, state, and, local laws governing any business, it becomes crucial to make an informed decision about the venture. Here are a few steps worth considering before your business takes off in full swing
Most of us get paranoid over the idea of starting a business. With so many federal, state, and, local laws governing any business, it becomes crucial to make an informed decision about the venture. Gathering all the necessary information for a business setup could be a time-consuming, and an exhaustive process. Here are a few steps worth considering before your business takes off in full swing.
Initial capital investment:
The very foundation of your business rests on the initial capital amount you invest in it. Dearth of funds initially could spell serious trouble for you in future. So, whether it's an online or an offline business venture, make sure that you're not low on the initial capital to be invested.
These days, local banks have opened their doors for you to get loans for low budget business ventures. As long as you have a healthy credit score, getting a small loan is really simple. Just keep in mind that you don't go overboard on your initial business expenses. Watch your financial moves carefully. Once your business takes off well and gets you a huge profit, you could consider taking another loan to expand your business
Experience in managing the business
Lack of experience is a major put off for most people contemplating a business venture. This major deterrent as far as starting a business is concerned.
Expert business plan:
It is imperative to have concrete business guidelines. Most often, it's observed that, home-based and other small-scale businesses fair badly due to a lack of a business "blue-print". Such businesses suffer heavy monetary losses. Without a concrete business proposal, almost 70% of the businesses wind up within a year of being established. Therefore, a rough draft of the business plan taking into account all the minute details are necessary for any business venture. The business plan should explicitly define the target audience for your products. It should also present a detailed description of the average cost per product and your expected profit on each product. Besides, it should also portray the desired break-even point and your expected income from the business. Thus, for a smooth sailing business, it's extremely important that your business plan defines the ways of converting your business into a cash generating system.
Take valuable guidance from a business mentor:
http://www.startup-advice.com/Vending-startup.html
http://www.startup-advice.com/Day-Care-startup.html
http://www.startup-advice.com/Laundromat-startup.html
http://www.startup-advice.com/SBA-startup.htm
Don't hesitate to learn from the experiences of your most admired business mentor. They would show you the right way to expand your small-scale business into a vast business empire. Never miss out on an opportunity to gather those pearls of wisdom from an established businessman. Most business books also talk about the ways to a successful business enterprise is only by learning from the experiences of seasoned business stalwarts. So, pick up all the nuances for a successful business from your very own business mentor. Keeping in mind all the above-mentioned factors you can ensure a long life for your start up business enterprise. We wish you luck for your forthcoming business venture.
For startup advice and guidance please visit:http://www.startup-advice.com
Most of us get paranoid over the idea of starting a business. With so many federal, state, and, local laws governing any business, it becomes crucial to make an informed decision about the venture. Gathering all the necessary information for a business setup could be a time-consuming, and an exhaustive process. Here are a few steps worth considering before your business takes off in full swing.
Initial capital investment:
The very foundation of your business rests on the initial capital amount you invest in it. Dearth of funds initially could spell serious trouble for you in future. So, whether it's an online or an offline business venture, make sure that you're not low on the initial capital to be invested.
These days, local banks have opened their doors for you to get loans for low budget business ventures. As long as you have a healthy credit score, getting a small loan is really simple. Just keep in mind that you don't go overboard on your initial business expenses. Watch your financial moves carefully. Once your business takes off well and gets you a huge profit, you could consider taking another loan to expand your business
Experience in managing the business
Lack of experience is a major put off for most people contemplating a business venture. This major deterrent as far as starting a business is concerned.
Expert business plan:
It is imperative to have concrete business guidelines. Most often, it's observed that, home-based and other small-scale businesses fair badly due to a lack of a business "blue-print". Such businesses suffer heavy monetary losses. Without a concrete business proposal, almost 70% of the businesses wind up within a year of being established. Therefore, a rough draft of the business plan taking into account all the minute details are necessary for any business venture. The business plan should explicitly define the target audience for your products. It should also present a detailed description of the average cost per product and your expected profit on each product. Besides, it should also portray the desired break-even point and your expected income from the business. Thus, for a smooth sailing business, it's extremely important that your business plan defines the ways of converting your business into a cash generating system.
Take valuable guidance from a business mentor:
http://www.startup-advice.com/Vending-startup.html
http://www.startup-advice.com/Day-Care-startup.html
http://www.startup-advice.com/Laundromat-startup.html
http://www.startup-advice.com/SBA-startup.htm
Don't hesitate to learn from the experiences of your most admired business mentor. They would show you the right way to expand your small-scale business into a vast business empire. Never miss out on an opportunity to gather those pearls of wisdom from an established businessman. Most business books also talk about the ways to a successful business enterprise is only by learning from the experiences of seasoned business stalwarts. So, pick up all the nuances for a successful business from your very own business mentor. Keeping in mind all the above-mentioned factors you can ensure a long life for your start up business enterprise. We wish you luck for your forthcoming business venture.
For startup advice and guidance please visit:http://www.startup-advice.com
The Business Plan and the Four P’s
The Business Plan area of the business plan demonstrates how a aggregation will admission the bazaar with its articles and services. The Business Plan should cover “the four P’s” – Product, Promotions, Price, and Place.
Products and/or Casework
The aboriginal “P” stands for Product, but includes all articles and casework that the aggregation offers. This area of the business plan should detail all the appearance of the articles and services, how they work, their unique/proprietary attributes, etc. For articles that are patented and/or abstruse in nature, assets and advancement abstracts should be presented in the Appendix.
Most growing companies action assertive articles and casework today but apprehend to action added in the future. It is important to acknowledgment both accepted and approaching products/services here, but to focus primarily on the short-to-intermediate appellation horizon.
Promotions
Promotions cover anniversary of the activities that abet a chump to buy the company’s articles and services. Promotional activities could cover advertising, accessible relations (PR), chargeless samples, discounts, absolute mail, telemarketing, partnerships, etc.
This area of the business plan discusses which promotions will be acclimated and how they will be used. For instance, if partnerships will be acclimated to defended new customers, the plan accept to explain which companies are partners, how they will be able to accommodate new customers, how the affiliation will plan (from operational/ banking standpoints), etc.
This area accept to be as specific as possible, decidedly as it relates to discussing approaching promotions. To say that a aggregation is traveling to accomplish PR in barter magazines is artlessly too vague. Rather, the plan accept to explain the blazon of article/feature that may be accounting about the close and why, which specific barter journals that will be targeted and/or the projected advertisement dates.
In discussing how the aggregation will advance itself, it is important to altercate how the aggregation will position itself. This accession account data the attributes that barter will accredit to the company, its articles and services. The best of promotional activities accept to abutment this positioning. For example, discounts ability not be constant with a admiration to be advised an flush brand.
Price
This area of the plan should detail the amount point(s) at which the company’s articles and casework will be sold. If the products/ casework are awash as bundles, these should be abundant in this section. Rationale for the appraisement should be accustomed if applicative (e.g., why the aggregation has called an admission fee additional account associates fees against a ancient lifetime associates fee).
Place
The final “P” refers to “Place” or “Distribution” and explains how a company’s articles and/or casework will be delivered to customers. This area is acute because if barter cannot admission articles and services, they cannot acquirement them.
This area is abnormally analytical for high-growth, capital-constrained companies. Attaining profit-effective administration channels is generally the a lot of afflictive claiming for these businesses. Examples of administration methods cover retail locations, website, distributors, wholesalers, absolute mail catalogs, etc.
Many companies accept assorted administration methods to bear their articles and casework to barter and anniversary should be abundant here.
Detailing the “the four P’s” in the business plan is analytical in proving to investors that your aggregation will be able to calmly and finer admission its market.
You Can Make Money With A Home Based Business
Would you like to make money by starting your own home-based business? People choose to work from home for several reasons including the desire to stay home with their children, the need for extra income, or simply being dissatisfied with their current job. A home-based business will provide you with an exciting way to make money and be your own boss. Numerous opportunities are available to internet marketers.
When starting your home-based business you should develop a business plan and research your options thoroughly. Making wise decisions and following your business plan each step of the way can help you in creating a steady stream of income. Operating a home-based business will require hard work and effort. You will not become wealthy over night. It will take determination to succeed as an internet marketer. The amount of money you make will be directly related to the amount of work you are willing to do.
When making your business plan, include both short and long term goals. Determine how you will achieve those goals and put your plan into action. Affiliate programs are excellent home-based business programs and there are numerous other internet marketing offers that will create steady income if you are willing to make the effort. Some of these opportunities may require an initial investment from you and others are advertised as free. Research all internet marketing opportunities carefully to make sure you understand the terms and conditions.
As an internet marketer, you will have to distinguish yourself from the competition if you want to succeed. You should know your target audience and know your competition even better. Do not let self-doubt stop you from accomplishing your goals. Every successful internet marketer gives their business the very best effort possible. Hard work and determination will make your home-based business a success and provide you with a steady stream of income.
Starting a home-based business is one of the most exciting and challenging endeavors you will ever undertake. A sound business plan and the will to succeed will set you apart from the competition. Choose the products or services you provide carefully. Make certain your services will be needed over the long term and make customer service your top priority. A loyal customer base is the key to the success or failure of your home-based business. A home-based business is an excellent way to gain independence and financial freedom. A sound business plan and a strong work ethic are all it takes to succeed.
When starting your home-based business you should develop a business plan and research your options thoroughly. Making wise decisions and following your business plan each step of the way can help you in creating a steady stream of income. Operating a home-based business will require hard work and effort. You will not become wealthy over night. It will take determination to succeed as an internet marketer. The amount of money you make will be directly related to the amount of work you are willing to do.
When making your business plan, include both short and long term goals. Determine how you will achieve those goals and put your plan into action. Affiliate programs are excellent home-based business programs and there are numerous other internet marketing offers that will create steady income if you are willing to make the effort. Some of these opportunities may require an initial investment from you and others are advertised as free. Research all internet marketing opportunities carefully to make sure you understand the terms and conditions.
As an internet marketer, you will have to distinguish yourself from the competition if you want to succeed. You should know your target audience and know your competition even better. Do not let self-doubt stop you from accomplishing your goals. Every successful internet marketer gives their business the very best effort possible. Hard work and determination will make your home-based business a success and provide you with a steady stream of income.
Starting a home-based business is one of the most exciting and challenging endeavors you will ever undertake. A sound business plan and the will to succeed will set you apart from the competition. Choose the products or services you provide carefully. Make certain your services will be needed over the long term and make customer service your top priority. A loyal customer base is the key to the success or failure of your home-based business. A home-based business is an excellent way to gain independence and financial freedom. A sound business plan and a strong work ethic are all it takes to succeed.
Alternative Venture Finance: Federal Grants and Loans
While most companies seeking venture capital initially think about angel investors and venture capitalists, a large alternative source of financing is federal grants and loans. The two largest federal grant programs are run by the Small Business Administration (SBA), and by Small Business Investment Companies (SBICS).
An SBA loan, regardless of whether it is a direct loan from the SBA, or, as is more common, a bank loan guaranteed by the SBA, is essentially a bank loan. The benefit of it versus a traditional bank loan is the rate. SBA rates are typically much less than traditional business loan rates.
In most cases, in a guaranteed SBA bank loan, the SBA guarantees 90 percent of the loan will be repaid to the bank. As such, banks are at much less risk than in most other loans, and are a bit more flexible with regards to who they offer these loans. However, the SBA usually requires the founders of the company to personally guarantee the loans, which makes them risky should the venture collapse.
Alternatively, Small Business Investment Companies (SBICs) are privately organized corporations that are licensed and regulated by the SBA. Small or emerging businesses which qualify for assistance from the SBIC program can receive equity capital and/or long-term loans from these companies. Essentially, these companies provide their own capital, which is supplemented by federal funds, to the companies they fund.
Interestingly, U.S. taxpayers benefits from the SBIC program as tax revenues generated from successful SBIC investments have more than covered the cost of the program. Likewise the program has created hundreds of thousands of jobs.
In summary, SBA and SBIC financing are viable alternatives to financing from angel investors and venture capitalists and should be considered in the capital raising process. Similarly to angel and VC financing, companies seeking SBA and SBIC financing need a strong management team and value proposition, and a highly professional and compelling business plan in order to raise the capital they need.
An SBA loan, regardless of whether it is a direct loan from the SBA, or, as is more common, a bank loan guaranteed by the SBA, is essentially a bank loan. The benefit of it versus a traditional bank loan is the rate. SBA rates are typically much less than traditional business loan rates.
In most cases, in a guaranteed SBA bank loan, the SBA guarantees 90 percent of the loan will be repaid to the bank. As such, banks are at much less risk than in most other loans, and are a bit more flexible with regards to who they offer these loans. However, the SBA usually requires the founders of the company to personally guarantee the loans, which makes them risky should the venture collapse.
Alternatively, Small Business Investment Companies (SBICs) are privately organized corporations that are licensed and regulated by the SBA. Small or emerging businesses which qualify for assistance from the SBIC program can receive equity capital and/or long-term loans from these companies. Essentially, these companies provide their own capital, which is supplemented by federal funds, to the companies they fund.
Interestingly, U.S. taxpayers benefits from the SBIC program as tax revenues generated from successful SBIC investments have more than covered the cost of the program. Likewise the program has created hundreds of thousands of jobs.
In summary, SBA and SBIC financing are viable alternatives to financing from angel investors and venture capitalists and should be considered in the capital raising process. Similarly to angel and VC financing, companies seeking SBA and SBIC financing need a strong management team and value proposition, and a highly professional and compelling business plan in order to raise the capital they need.
How To Write A Quick & Relatively Painless Business Plan
It doesn't have to be the nightmare of your imagination. Traditionally, a business plan is used to secure funding from a lender or a potential investment partner. It serves as something akin to your business's resume, outlining the purpose and scope of your business, identifying the goals, marketing and management, and establishing a basic balance sheet.
Now, even if you aren't going to seek additional funding, even if you're going to grow your business by yourself from your office at home, you'd be wise to put together a business plan. Simply going through the process has value. It'll help you develop a clearly defined vision of what you intend to do with your business and how you intend to do it.
These are some of the questions you should already have asked and answered before you sit down to write your business plan:
== What "want" does your business fill, and what service or product will you be providing to fill that want?
== Who will be your potential customer (this should be an established, niche market with die-hard buyers).
== Why will people purchase from you as opposed to the business down the street (in other words ... what's your Unique Selling Position)?
== How do you intend to reach your customers? A storefront? An ad in the phone book? Direct mail? An Internet campaign? Selling door-to-door? A combination of these?
== Will you need additional funding and if so, how much will you need and how do you intend to secure it?
Okay, so let's take a look at what you'll want to include in your business plan.
Most business plans are structured to examine four primary areas:
1. Executive Summary - a decription of the business
2. How you intend to market the business
3. How the busines finances will be arranged and handled
4. How the busines will be managed
Let's take a further look at these.
Executive Summary: what the business will do, its Unique Selling Position, the business goals, its ownership and legal structure, your skills and knowledge and how they will benefit the business.
Marketing The Business: describe your product or service, identify your market niche, how big it is, and how you plan to reach it. Define your customer, identify your competition, detail your pricing plan, outline how you intend to attract and convert customers.
Financing The Business: estimate your start-up costs, project your monthly operating budget for the first year, outline your ROI (return on investment) and cash flow for the first year, project your income and expense balance sheet for the first two years, explain how you're going to compensate yourself, establish who will maintain the accounting records and how they'll be maintained, and if you're in need of funding, explain how much you need and how it'll be used by the business.
Managing The Business: how will the business be managed day-to-day, what the hiring and personnel procedures will be, how the products or services will be developed and how they'll get into the hands of your customers. You'll also need to account for equipment the business will need, and how insurance, rental agreements, etc. will be handled.
That's it. In a nutshell.
If you'd like to see some free sample business plans to get a better idea of how they're structured and how they read, here's a good source for you: http://www.bplans.com/sp/businessplans.cfm
Now, even if you aren't going to seek additional funding, even if you're going to grow your business by yourself from your office at home, you'd be wise to put together a business plan. Simply going through the process has value. It'll help you develop a clearly defined vision of what you intend to do with your business and how you intend to do it.
These are some of the questions you should already have asked and answered before you sit down to write your business plan:
== What "want" does your business fill, and what service or product will you be providing to fill that want?
== Who will be your potential customer (this should be an established, niche market with die-hard buyers).
== Why will people purchase from you as opposed to the business down the street (in other words ... what's your Unique Selling Position)?
== How do you intend to reach your customers? A storefront? An ad in the phone book? Direct mail? An Internet campaign? Selling door-to-door? A combination of these?
== Will you need additional funding and if so, how much will you need and how do you intend to secure it?
Okay, so let's take a look at what you'll want to include in your business plan.
Most business plans are structured to examine four primary areas:
1. Executive Summary - a decription of the business
2. How you intend to market the business
3. How the busines finances will be arranged and handled
4. How the busines will be managed
Let's take a further look at these.
Executive Summary: what the business will do, its Unique Selling Position, the business goals, its ownership and legal structure, your skills and knowledge and how they will benefit the business.
Marketing The Business: describe your product or service, identify your market niche, how big it is, and how you plan to reach it. Define your customer, identify your competition, detail your pricing plan, outline how you intend to attract and convert customers.
Financing The Business: estimate your start-up costs, project your monthly operating budget for the first year, outline your ROI (return on investment) and cash flow for the first year, project your income and expense balance sheet for the first two years, explain how you're going to compensate yourself, establish who will maintain the accounting records and how they'll be maintained, and if you're in need of funding, explain how much you need and how it'll be used by the business.
Managing The Business: how will the business be managed day-to-day, what the hiring and personnel procedures will be, how the products or services will be developed and how they'll get into the hands of your customers. You'll also need to account for equipment the business will need, and how insurance, rental agreements, etc. will be handled.
That's it. In a nutshell.
If you'd like to see some free sample business plans to get a better idea of how they're structured and how they read, here's a good source for you: http://www.bplans.com/sp/businessplans.cfm
Top Ten Reasons To Create A One Page Business Plan
1. Choose opportunities more wisely and waste less time
because I have my plan in place (P 6)
2. A single page can contain all the elements you need to
tell your employees, board of directors, potential partners
or banker where you are taking your business and how you are
going to get there. (P 17)
3. The most important reason to have a business plan is to
clarify your thinking, regardless of the size of your
company (P 18)
4. It facilitates creating and analytical thinking, problem
solving, communication, and teamwork. (P 18)
5. It creates hope and enthusiasm about the future. (P 18)
6. It also brings out procrastination, frustration,
differences of opinions and possibly anger. (P 18)
7. Somehow writing initiates the transformation from idea
to reality. (P 21)
8. The written word produces a contract with yourself that
results in immediate action. (P 21)
9. Writing allows others to participate in your dream and
give you feedback (P 21)
10. Because your coach, consultant, business builder
strategist, friend, relative tells you that one of the
top reasons businesses fail is a lack of planning! That's why!
because I have my plan in place (P 6)
2. A single page can contain all the elements you need to
tell your employees, board of directors, potential partners
or banker where you are taking your business and how you are
going to get there. (P 17)
3. The most important reason to have a business plan is to
clarify your thinking, regardless of the size of your
company (P 18)
4. It facilitates creating and analytical thinking, problem
solving, communication, and teamwork. (P 18)
5. It creates hope and enthusiasm about the future. (P 18)
6. It also brings out procrastination, frustration,
differences of opinions and possibly anger. (P 18)
7. Somehow writing initiates the transformation from idea
to reality. (P 21)
8. The written word produces a contract with yourself that
results in immediate action. (P 21)
9. Writing allows others to participate in your dream and
give you feedback (P 21)
10. Because your coach, consultant, business builder
strategist, friend, relative tells you that one of the
top reasons businesses fail is a lack of planning! That's why!
Identifying the Right Venture Capital Firm Partner
Venture capital firms are comprised of individual partners. These partners make investment decisions and typically take a seat on each portfolio company's Board. Partners tend to invest in what they know, so finding a partner that has past work experience in your industry is very helpful. This relevant experience allows them to more fully understand your venture's value proposition and gives them confidence that they can add value, thus encouraging them to invest.
Fortunately, most venture capital firm websites list their partners with great pride. Each partner typically has a bio that includes their educational credentials, business accomplishments and investments that they have made. In identifying the right venture capital partner to contact for your company, try to find the partner that, from their background, will truly grasp the opportunity and can really add value.
Once you have identified the most appropriate venture capital partner, it is important to figure out how to contact them. As partners are often inundated with business plans, having a personal connection and/or introduction is often the difference between getting heard and not getting heard. For instance, if you attended the same university or worked at a company that they did, call or email them and use this as the introduction. If not, it is important to network. Call people that may have been associated with the partner and ask for an introduction.
Getting the partner's attention is the first key hurdle in raising venture capital. The second hurdle is getting them to believe in the opportunity, and finally, giving them the enthusiasm and information needed to convince other partners in their firm that investing in your venture represents a sound investment.
Fortunately, most venture capital firm websites list their partners with great pride. Each partner typically has a bio that includes their educational credentials, business accomplishments and investments that they have made. In identifying the right venture capital partner to contact for your company, try to find the partner that, from their background, will truly grasp the opportunity and can really add value.
Once you have identified the most appropriate venture capital partner, it is important to figure out how to contact them. As partners are often inundated with business plans, having a personal connection and/or introduction is often the difference between getting heard and not getting heard. For instance, if you attended the same university or worked at a company that they did, call or email them and use this as the introduction. If not, it is important to network. Call people that may have been associated with the partner and ask for an introduction.
Getting the partner's attention is the first key hurdle in raising venture capital. The second hurdle is getting them to believe in the opportunity, and finally, giving them the enthusiasm and information needed to convince other partners in their firm that investing in your venture represents a sound investment.
Wednesday, October 15, 2008
Keys to a Good Business Plan.
A business plan is a very important part of any business. It is usually drawn up before the business launches, but can also be developed after a business has already taken off. A good plan can take some time to develop but the effort you put into it will be well worth it to make your business succeed. Not many people know exactly what goes into a good business plan. What alot don't realize is that each business plan is unique to each business. Just because a Candy Shop's business plan is successful for them doesn't mean it will be successful for a Webhosting business. Though the design of the business plan may be similar, it is truly the details inside that make it work.
Here is an example outline of a business I developed for Logo2D.com . This will give you an idea of some of the subjects that go into a good business plan:
1.0 Executive Summary
1.1 Objectives
1.2 Mission
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2.0 Company Summary
2.1 Company Ownership
2.2 Company History (for ongoing companies) or
Start-up Plan (for new companies)
2.3 Company Locations and Facilities
--------------------------------------------------------------------------------
3.0 Products and Services
3.1 Product and Service Description
3.2 Business Advertising Program
3.3 Sourcing and Fulfillment
3.4 Technology
--------------------------------------------------------------------------------
4.0 Strategy and Implementation Summary
4.1 Customers, Target Market & New Technology
4.2 Competitive Edge
4.3 Marketing
4.4 Main Competitors
4.5 Strategic Alliances
4.6 Milestones
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5.0 Web Plan Summary
5 Development Information
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6.0 Management Summary
6.1 Organizational Structure
6.2 Personnel Plan
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7.0 Financial Plan
7.1 Break-even Analysis
7.2 Projected Profit and Loss
7.3 Projected Balance Sheet
--------------------------------------------------------------------------------
As you can see it seems a little complex, but the best thing to do is to break it down into parts. Usually each category(Category 1-7) will remain the same on most business plans. Some categories may be added in or taken out all together. The key is to provide as much essential data as possible. For example on Number 5.0 - Web Plan Summary. You business plan mike look something like this:
Part: 5.0 Web Plan Summary
5 Development Information
Logo2D.com has already developed the necessary tools for business including:
- Business Identity
Our logo is unique to us, displaying a eye appealing, unique symbol that when seen can be easily recognized as Logo2D.com creating brand labelling.
- Ecommerce service
Logo2D.com features a fully operational ecommerce website system that allows products to be added through an admin section on the site. It also has the ability to take, receive and process orders, remove sold products, creating promotional offers and coupons/vouchers and also displaying featured products on the front page of the website. Also included in the ecommerce program is an area to add, create and manage website ads placed on the Logo2D.com.
- Website development
All graphics for the website development have already been developed, coded and integrated into the ecommerce system. The website is live and taking orders on www.Logo2D.com
- Products
Development needed products(such as logos) have already be developed and an inventory of over 150 products are on the website at any given time. As soon as logo is sold(as well as during down times) a new logo/new logos are being developed to the highest of quality and added back onto the website.
- Marketing Material
Marketing plan and materials are in the works.
As you can see from above what details are given have already been researched and found out. There aren't any comments from a personnel stand point, just facts that have proven. You can also project different areas of your business plan but you will have to do some research on this as well. So when you are developing your business plan you want to deal with facts and information you already have or can get(not comments or guesses).
When developing a good business plan, research is definitely key. The effort you put into it will determine the effort you will put into your business.
Here is an example outline of a business I developed for Logo2D.com . This will give you an idea of some of the subjects that go into a good business plan:
1.0 Executive Summary
1.1 Objectives
1.2 Mission
--------------------------------------------------------------------------------
2.0 Company Summary
2.1 Company Ownership
2.2 Company History (for ongoing companies) or
Start-up Plan (for new companies)
2.3 Company Locations and Facilities
--------------------------------------------------------------------------------
3.0 Products and Services
3.1 Product and Service Description
3.2 Business Advertising Program
3.3 Sourcing and Fulfillment
3.4 Technology
--------------------------------------------------------------------------------
4.0 Strategy and Implementation Summary
4.1 Customers, Target Market & New Technology
4.2 Competitive Edge
4.3 Marketing
4.4 Main Competitors
4.5 Strategic Alliances
4.6 Milestones
--------------------------------------------------------------------------------
5.0 Web Plan Summary
5 Development Information
--------------------------------------------------------------------------------
6.0 Management Summary
6.1 Organizational Structure
6.2 Personnel Plan
--------------------------------------------------------------------------------
7.0 Financial Plan
7.1 Break-even Analysis
7.2 Projected Profit and Loss
7.3 Projected Balance Sheet
--------------------------------------------------------------------------------
As you can see it seems a little complex, but the best thing to do is to break it down into parts. Usually each category(Category 1-7) will remain the same on most business plans. Some categories may be added in or taken out all together. The key is to provide as much essential data as possible. For example on Number 5.0 - Web Plan Summary. You business plan mike look something like this:
Part: 5.0 Web Plan Summary
5 Development Information
Logo2D.com has already developed the necessary tools for business including:
- Business Identity
Our logo is unique to us, displaying a eye appealing, unique symbol that when seen can be easily recognized as Logo2D.com creating brand labelling.
- Ecommerce service
Logo2D.com features a fully operational ecommerce website system that allows products to be added through an admin section on the site. It also has the ability to take, receive and process orders, remove sold products, creating promotional offers and coupons/vouchers and also displaying featured products on the front page of the website. Also included in the ecommerce program is an area to add, create and manage website ads placed on the Logo2D.com.
- Website development
All graphics for the website development have already been developed, coded and integrated into the ecommerce system. The website is live and taking orders on www.Logo2D.com
- Products
Development needed products(such as logos) have already be developed and an inventory of over 150 products are on the website at any given time. As soon as logo is sold(as well as during down times) a new logo/new logos are being developed to the highest of quality and added back onto the website.
- Marketing Material
Marketing plan and materials are in the works.
As you can see from above what details are given have already been researched and found out. There aren't any comments from a personnel stand point, just facts that have proven. You can also project different areas of your business plan but you will have to do some research on this as well. So when you are developing your business plan you want to deal with facts and information you already have or can get(not comments or guesses).
When developing a good business plan, research is definitely key. The effort you put into it will determine the effort you will put into your business.
Describing Intellectual Property in Your Business Plan
Most companies that are aces of adopting adventure basic accept proprietary Intellectual Property (IP). In fact, the above of the IP and the administration aggregation are generally the two a lot of important aspects of a adventure capitalist’s investment decision. The claiming that abounding ventures face, however, is that a lot of investors will not assurance non-disclosure agreements (NDAs), and NDAs are analytical to advancement the proprietary attributes of the IP. This commodity data the adapted action for acclamation proprietary IP in your business plan in adjustment to allure broker absorption while application the acquaintance of your inventions.
Focus on the Allowances of and Applications of the IP: The business plan should not altercate the arcane aspects of the IP. Rather, the plan should altercate the allowances of the IP. Remember that even the a lot of amazing of technologies will not accelerate investors unless it has absolute allowances to customers.
The business plan aboriginal needs to altercate the articles and casework into which the IP will be integrated. It again accept to detail the allowances that these articles and casework accept to barter and differentiate them from aggressive products. If applicable, it is accessible to cover non-confidential assets and advancement abstracts of the articles and casework in the Appendix.
Focus on Chump Needs and the Accordant Bazaar Size: The business plan accept to aswell altercate how the allowances of the IP achieve a ample chump need. To achieve this, the plan needs to detail chump wants and needs and prove that the company’s offerings accurately accommodated these needs.
Secondly, the plan needs to altercate the exchange in which the IP is offered and the admeasurement of this marketplace. Analytical to this assay is free the accordant bazaar size. The accordant bazaar admeasurement equals a company’s sales if it were to abduction 100% of its specific alcove of the market. For example, a medical device’s bazaar admeasurement would not be the abundance dollar healthcare market, but rather the sales of all aggressive medical devices.
Focus on Competition and Aggressive Differentiation: Your business plan accept to aswell prove that your IP is bigger than aggressive inventions. In anecdotic competitors, agenda that advertisement no or few competitors has a abrogating connotation. It implies that there may not be a ample abundant chump charge to abutment the company’s articles and/or services. On the added hand, should there be too abounding competitors, again the bazaar may be too saturated to abutment the advantage of a new entrant. The acknowledgment -- any aggregation that aswell serves the chump needs that you serve should be advised a competitor.
The business plan should detail both the absolute and abrogating aspects of competitors’ IP and products/services and validate that your offerings are either above in general, or are above in confined a specific chump niche.
Prove that you can Assassinate on the Opportunity: As chiefly as proving the above of the IP and that a all-inclusive bazaar exists for its applications, the business plan a lot of prove that the aggregation can auspiciously assassinate on the opportunity.
The plan should detail the company’s able accomplishments, including descriptions and dates if above-mentioned allotment circuit were received, articles and casework were launched, acquirement milestones were reached, key partnerships were executed, etc.
When a aggregation is a complete start-up, and no milestones accept been accomplished, the plan should focus on able accomplishments of the administration aggregation as an indicator of the company’s adeptness to assassinate successfully.
Results: Getting Investors to Assurance the NDA: If you are able to argue the -to-be broker that the IP is chip into a product/service which yields absolute chump allowances in a ample market, again the broker will yield the above of the apparatus for accepted if reviewing the plan. Later, during the due activity process, the broker will analysis the absolute technology. At this point, a altercation apropos signing an NDA would be appropriate.
Developing a Business Plan = Developing a Succesful Business.
Whether you are starting up a new business or you already have an established company, the importance of a business plan may be over looked. Yes, they can take some time to draw up but just think of your business plan as a map of a country. Without the details and information on this map, trying to navigate yourself around a country will usually end up leaving you lost. Probably travelling the same routes over and over again, taking you 2-3 times longer to find your way(if you do every find your way).
A detailed business plan could mean your success in business. Consider this. How can you take your company in the right direction, developing the methods you need to succeed if you do not know what you are trying to accomplish. It would be like building a house with no plans and trying to put the roof on first. Yes, you may be successful in building the roof but your house will be missing some essential pieces. You may not miss these pieces at first, but down the line(especially when the winter comes) you are going to be wishing you built those walls too!
A business plan plots a course for your business to follow. It allows you to determine and realize your growth but more importantly what steps are needed to be token to achieve this. It helps you figure out the materials you need in place so that you can first build a strong infrastructure for your business. Another great thing about a business plan is that like any map it can be changed over time to represent the lay of the land. Which allows you to make any changes that need to be made to your route and to help you navigate them better.
While you are developing your business plan you will see that it will start to show you what you will need to do to be successful. Including such things as materials needed, your timeline and projected numbers for your business. It also will show your projected income and losses, as well as how your business will do in the first months and year(s) of operations. This information is priceless.
Another important factor of a business plan is that it will show you how you need to grow. You may wonder why this is so important? Simple. It falls right under you developing a marketing plan and picking out areas/markets for you to advertise in to grow your business. Without knowing where your business is going, there will be no way for you to develop an accurate marketing plan. These two things go hand and hand with each other.
So remember whether your business has been around for days, weeks months, years or is just an idea in your head. Develop a business plan which will help you develop a successful business.
A detailed business plan could mean your success in business. Consider this. How can you take your company in the right direction, developing the methods you need to succeed if you do not know what you are trying to accomplish. It would be like building a house with no plans and trying to put the roof on first. Yes, you may be successful in building the roof but your house will be missing some essential pieces. You may not miss these pieces at first, but down the line(especially when the winter comes) you are going to be wishing you built those walls too!
A business plan plots a course for your business to follow. It allows you to determine and realize your growth but more importantly what steps are needed to be token to achieve this. It helps you figure out the materials you need in place so that you can first build a strong infrastructure for your business. Another great thing about a business plan is that like any map it can be changed over time to represent the lay of the land. Which allows you to make any changes that need to be made to your route and to help you navigate them better.
While you are developing your business plan you will see that it will start to show you what you will need to do to be successful. Including such things as materials needed, your timeline and projected numbers for your business. It also will show your projected income and losses, as well as how your business will do in the first months and year(s) of operations. This information is priceless.
Another important factor of a business plan is that it will show you how you need to grow. You may wonder why this is so important? Simple. It falls right under you developing a marketing plan and picking out areas/markets for you to advertise in to grow your business. Without knowing where your business is going, there will be no way for you to develop an accurate marketing plan. These two things go hand and hand with each other.
So remember whether your business has been around for days, weeks months, years or is just an idea in your head. Develop a business plan which will help you develop a successful business.
Restaurant Business Plan Software Considerations
Whether you are an administrator searching to alpha your aboriginal restaurant, or you accept been alive in the account industry for a continued time, restaurant business plan software can advice you actualize a automated business plan that will advance your affairs of funding. Here are few things to accumulate in apperception if comparing assorted packages.
Your needs - Assorted business plan software bales are geared against altered sizes of restaurant business and altered levels of allotment needs. Make abiding the software does what you charge it to do. Don’t go abdicate on a affairs that offers added than you need.
Feedback - Make abiding to get in blow with added humans who accept acclimated the software afore and get their feedback. The added acclaimed restaurant business plan software vendors will accommodate testimonials and acquaintance advice of antecedent customers. Make abiding to compare. Accumulate an eye out for absolute comments about affluence of use.
If you accept been in the restaurant business already, you apparently accept a amount of contacts you can arrangement with for information. Ask added restaurant owners you assurance if there was a software affairs they acclimated or accept heard acceptable things about. Word of aperture recommendations can generally accommodate admired leads.
Support – Make assertive your software bell-ringer offers abounding abutment for their programs. Many top vendors action 24/7 online and assessment chargeless abutment for their programs. If belief benefits, this is an important agency to yield into consideration. You wish to be assured you can get the software to work.
Cost – Once you’ve narrowed your choices down by the aloft benefits, it is time to accede costs. Check altered vendors, as there can generally be a ample aberration in prices amid vendors for the aforementioned title. Make assertive to agency in shipment and administration costs and supply time of your restaurant business plan software if comparing prices.
Once you’ve called and installed your software, it’s time to get to plan creating the business plan for your restaurant. If you accept any trouble, be abiding to get in blow with the vendor’s abutment as anon as possible. Acceptable luck with your new business venture!
The Management Team Section of the Business Plan - Don't Just Include Resumes
Even the best new concept or existing plan will fail if executed poorly. The Management Team section of the business plan must prove to the investor why the key company personnel are "eminently qualified" to execute on the business model.
The Management Team section should include biographies of key team members and detail their responsibilities. It is important that these biographies are not merely resumes that include the educational backgrounds and previous job titles and responsibilities of the team members. Rather, biographies should highlight the most relevant past positions that the individuals have held and specific successes in each. These successes could include launching and growing new businesses or managing divisions of established companies.
Team member biographies should be tailored to the company's growth stage. For instance, a start-up company should emphasize its management's success launching and growing companies. A more mature company should emphasize how team members have successfully operated within the framework of larger enterprises.
Depending upon the stage of the company, key functional areas may be missing from the team. This is acceptable provided that the plan clearly defines the roles that these individuals will play and identifies the key characteristics of the individuals that will be hired. However, it is generally not favorable if personnel are missing for ultra-critical roles. For example, a plan that is fundamentally a marketing play should not seek financing without a stellar marketing team.
The Management Team section should also include biographies of the company's Advisory Board and/or Board of Directors. While having well-known advisors/board members adds credibility to the business plan, it is highly effective to explain how these advisors will directly impact the company through strategic advice and/or providing conduits to key clients, partners, suppliers, etc.
In summary, the Management Team section of the business plan is an opportunity to prove to investors that your company has the necessary talent to succeed. Rather than waste this opportunity by merely showing employee resumes, which could be included in the Appendix, the section should be used to explain precisely how the team is uniquely qualified to execute the venture in its present state.
As President of www.growthink.com, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
The Management Team section should include biographies of key team members and detail their responsibilities. It is important that these biographies are not merely resumes that include the educational backgrounds and previous job titles and responsibilities of the team members. Rather, biographies should highlight the most relevant past positions that the individuals have held and specific successes in each. These successes could include launching and growing new businesses or managing divisions of established companies.
Team member biographies should be tailored to the company's growth stage. For instance, a start-up company should emphasize its management's success launching and growing companies. A more mature company should emphasize how team members have successfully operated within the framework of larger enterprises.
Depending upon the stage of the company, key functional areas may be missing from the team. This is acceptable provided that the plan clearly defines the roles that these individuals will play and identifies the key characteristics of the individuals that will be hired. However, it is generally not favorable if personnel are missing for ultra-critical roles. For example, a plan that is fundamentally a marketing play should not seek financing without a stellar marketing team.
The Management Team section should also include biographies of the company's Advisory Board and/or Board of Directors. While having well-known advisors/board members adds credibility to the business plan, it is highly effective to explain how these advisors will directly impact the company through strategic advice and/or providing conduits to key clients, partners, suppliers, etc.
In summary, the Management Team section of the business plan is an opportunity to prove to investors that your company has the necessary talent to succeed. Rather than waste this opportunity by merely showing employee resumes, which could be included in the Appendix, the section should be used to explain precisely how the team is uniquely qualified to execute the venture in its present state.
As President of www.growthink.com, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
Top Ten Reasons To Create A One Page Business Plan
1. Choose opportunities more wisely and waste less time
because I have my plan in place (P 6)
2. A single page can contain all the elements you need to
tell your employees, board of directors, potential partners
or banker where you are taking your business and how you are
going to get there. (P 17)
3. The most important reason to have a business plan is to
clarify your thinking, regardless of the size of your
company (P 18)
4. It facilitates creating and analytical thinking, problem
solving, communication, and teamwork. (P 18)
5. It creates hope and enthusiasm about the future. (P 18)
6. It also brings out procrastination, frustration,
differences of opinions and possibly anger. (P 18)
7. Somehow writing initiates the transformation from idea
to reality. (P 21)
8. The written word produces a contract with yourself that
results in immediate action. (P 21)
9. Writing allows others to participate in your dream and
give you feedback (P 21)
10. Because your coach, consultant, business builder
strategist, friend, relative tells you that one of the
top reasons businesses fail is a lack of planning! That's why!
Quotes 1-9 are from the One Page Business Plan Book, by Jim
Horan. For more information on the One Page Business Plan,
visit http://www.coachmaria.com/events/onepage.html
because I have my plan in place (P 6)
2. A single page can contain all the elements you need to
tell your employees, board of directors, potential partners
or banker where you are taking your business and how you are
going to get there. (P 17)
3. The most important reason to have a business plan is to
clarify your thinking, regardless of the size of your
company (P 18)
4. It facilitates creating and analytical thinking, problem
solving, communication, and teamwork. (P 18)
5. It creates hope and enthusiasm about the future. (P 18)
6. It also brings out procrastination, frustration,
differences of opinions and possibly anger. (P 18)
7. Somehow writing initiates the transformation from idea
to reality. (P 21)
8. The written word produces a contract with yourself that
results in immediate action. (P 21)
9. Writing allows others to participate in your dream and
give you feedback (P 21)
10. Because your coach, consultant, business builder
strategist, friend, relative tells you that one of the
top reasons businesses fail is a lack of planning! That's why!
Quotes 1-9 are from the One Page Business Plan Book, by Jim
Horan. For more information on the One Page Business Plan,
visit http://www.coachmaria.com/events/onepage.html
Identifying the Right Venture Capital Firm Partner
Venture capital firms are comprised of individual partners. These partners make investment decisions and typically take a seat on each portfolio company's Board. Partners tend to invest in what they know, so finding a partner that has past work experience in your industry is very helpful. This relevant experience allows them to more fully understand your venture's value proposition and gives them confidence that they can add value, thus encouraging them to invest.
Fortunately, most venture capital firm websites list their partners with great pride. Each partner typically has a bio that includes their educational credentials, business accomplishments and investments that they have made. In identifying the right venture capital partner to contact for your company, try to find the partner that, from their background, will truly grasp the opportunity and can really add value.
Once you have identified the most appropriate venture capital partner, it is important to figure out how to contact them. As partners are often inundated with business plans, having a personal connection and/or introduction is often the difference between getting heard and not getting heard. For instance, if you attended the same university or worked at a company that they did, call or email them and use this as the introduction. If not, it is important to network. Call people that may have been associated with the partner and ask for an introduction.
Getting the partner's attention is the first key hurdle in raising venture capital. The second hurdle is getting them to believe in the opportunity, and finally, giving them the enthusiasm and information needed to convince other partners in their firm that investing in your venture represents a sound investment.
Fortunately, most venture capital firm websites list their partners with great pride. Each partner typically has a bio that includes their educational credentials, business accomplishments and investments that they have made. In identifying the right venture capital partner to contact for your company, try to find the partner that, from their background, will truly grasp the opportunity and can really add value.
Once you have identified the most appropriate venture capital partner, it is important to figure out how to contact them. As partners are often inundated with business plans, having a personal connection and/or introduction is often the difference between getting heard and not getting heard. For instance, if you attended the same university or worked at a company that they did, call or email them and use this as the introduction. If not, it is important to network. Call people that may have been associated with the partner and ask for an introduction.
Getting the partner's attention is the first key hurdle in raising venture capital. The second hurdle is getting them to believe in the opportunity, and finally, giving them the enthusiasm and information needed to convince other partners in their firm that investing in your venture represents a sound investment.
An Exporter? Who, Me?
(NC) If you're a small- to medium-sized business with a potential market for your product abroad, you may profit from making a move into exporting.
Your first reaction may be "Me, an exporter?" but it isn't as farfetched as you may think. Even if your company is relatively small, there may be a market for your product or service outside of Canada. In fact, 90 per cent of Canadian exporters have annual export sales of less than $1 million. What's important is having the right product or service, a commitment to succeed, and a sound strategy.
The best export strategies are built on the foundation of an up-to-date and comprehensive business plan. If yours isn't as current as it should be, you might consider refining it with the help of the resources offered by BusinessGateway.ca. Located at www.businessgateway.ca, this Web site provides lots of free tips, advice and tools, all related to starting, running and developing your business.
Take your business plan, for example. It should enable you to:
# identify the strengths and weaknesses of your company;
# establish your objectives and strategies, and analyse your company's performance with respect to them;
# determine your cash needs so you can approach banks and investors with confidence; and
# communicate your intentions to employees and investors.
If your plan falls short in any of these areas, check out the free, Interactive Business Planner, located in the Tools section of the site. It covers everything your plan will need, including:
# identifying the types of information required in your plan;
# locating information on basics such as marketing and costing; and
# preparing financial projections for your business.
Once you're satisfied with your business plan, you can return to the Tools section and use the Interactive Export Planner. It's similar to the Business Planner, but also covers issues such as:
# adapting your products or services to a foreign market;
# getting an overview of the targeted export market;
# creating a market entry strategy and an export implementation plan; and
# preparing financial plans related to the targeted export market.
And don't forget to use the Exporting link on the BusinessGateway.ca home page. It will point you to other essential sources of information that can help your company find business opportunities around the world. Once you take the leap, you may discover that export success is a lot closer than you ever imagined!
Your first reaction may be "Me, an exporter?" but it isn't as farfetched as you may think. Even if your company is relatively small, there may be a market for your product or service outside of Canada. In fact, 90 per cent of Canadian exporters have annual export sales of less than $1 million. What's important is having the right product or service, a commitment to succeed, and a sound strategy.
The best export strategies are built on the foundation of an up-to-date and comprehensive business plan. If yours isn't as current as it should be, you might consider refining it with the help of the resources offered by BusinessGateway.ca. Located at www.businessgateway.ca, this Web site provides lots of free tips, advice and tools, all related to starting, running and developing your business.
Take your business plan, for example. It should enable you to:
# identify the strengths and weaknesses of your company;
# establish your objectives and strategies, and analyse your company's performance with respect to them;
# determine your cash needs so you can approach banks and investors with confidence; and
# communicate your intentions to employees and investors.
If your plan falls short in any of these areas, check out the free, Interactive Business Planner, located in the Tools section of the site. It covers everything your plan will need, including:
# identifying the types of information required in your plan;
# locating information on basics such as marketing and costing; and
# preparing financial projections for your business.
Once you're satisfied with your business plan, you can return to the Tools section and use the Interactive Export Planner. It's similar to the Business Planner, but also covers issues such as:
# adapting your products or services to a foreign market;
# getting an overview of the targeted export market;
# creating a market entry strategy and an export implementation plan; and
# preparing financial plans related to the targeted export market.
And don't forget to use the Exporting link on the BusinessGateway.ca home page. It will point you to other essential sources of information that can help your company find business opportunities around the world. Once you take the leap, you may discover that export success is a lot closer than you ever imagined!
How To Write A Quick & Relatively Painless Business Plan
If you've never written a business plan before, the idea alone can be overwhelming. It doesn't have to be the nightmare of your imagination. Traditionally, a business plan is used to secure funding from a lender or a potential investment partner. It serves as something akin to your business's resume, outlining the purpose and scope of your business, identifying the goals, marketing and management, and establishing a basic balance sheet.
Now, even if you aren't going to seek additional funding, even if you're going to grow your business by yourself from your office at home, you'd be wise to put together a business plan. Simply going through the process has value. It'll help you develop a clearly defined vision of what you intend to do with your business and how you intend to do it.
These are some of the questions you should already have asked and answered before you sit down to write your business plan:
== What "want" does your business fill, and what service or product will you be providing to fill that want?
== Who will be your potential customer (this should be an established, niche market with die-hard buyers).
== Why will people purchase from you as opposed to the business down the street (in other words ... what's your Unique Selling Position)?
== How do you intend to reach your customers? A storefront? An ad in the phone book? Direct mail? An Internet campaign? Selling door-to-door? A combination of these?
== Will you need additional funding and if so, how much will you need and how do you intend to secure it?
Okay, so let's take a look at what you'll want to include in your business plan.
Most business plans are structured to examine four primary areas:
1. Executive Summary - a decription of the business
2. How you intend to market the business
3. How the busines finances will be arranged and handled
4. How the busines will be managed
Let's take a further look at these.
Executive Summary: what the business will do, its Unique Selling Position, the business goals, its ownership and legal structure, your skills and knowledge and how they will benefit the business.
Marketing The Business: describe your product or service, identify your market niche, how big it is, and how you plan to reach it. Define your customer, identify your competition, detail your pricing plan, outline how you intend to attract and convert customers.
Financing The Business: estimate your start-up costs, project your monthly operating budget for the first year, outline your ROI (return on investment) and cash flow for the first year, project your income and expense balance sheet for the first two years, explain how you're going to compensate yourself, establish who will maintain the accounting records and how they'll be maintained, and if you're in need of funding, explain how much you need and how it'll be used by the business.
Managing The Business: how will the business be managed day-to-day, what the hiring and personnel procedures will be, how the products or services will be developed and how they'll get into the hands of your customers. You'll also need to account for equipment the business will need, and how insurance, rental agreements, etc. will be handled.
That's it. In a nutshell.
If you'd like to see some free sample business plans to get a better idea of how they're structured and how they read, here's a good source for you: http://www.bplans.com/sp/businessplans.cfm
Now, even if you aren't going to seek additional funding, even if you're going to grow your business by yourself from your office at home, you'd be wise to put together a business plan. Simply going through the process has value. It'll help you develop a clearly defined vision of what you intend to do with your business and how you intend to do it.
These are some of the questions you should already have asked and answered before you sit down to write your business plan:
== What "want" does your business fill, and what service or product will you be providing to fill that want?
== Who will be your potential customer (this should be an established, niche market with die-hard buyers).
== Why will people purchase from you as opposed to the business down the street (in other words ... what's your Unique Selling Position)?
== How do you intend to reach your customers? A storefront? An ad in the phone book? Direct mail? An Internet campaign? Selling door-to-door? A combination of these?
== Will you need additional funding and if so, how much will you need and how do you intend to secure it?
Okay, so let's take a look at what you'll want to include in your business plan.
Most business plans are structured to examine four primary areas:
1. Executive Summary - a decription of the business
2. How you intend to market the business
3. How the busines finances will be arranged and handled
4. How the busines will be managed
Let's take a further look at these.
Executive Summary: what the business will do, its Unique Selling Position, the business goals, its ownership and legal structure, your skills and knowledge and how they will benefit the business.
Marketing The Business: describe your product or service, identify your market niche, how big it is, and how you plan to reach it. Define your customer, identify your competition, detail your pricing plan, outline how you intend to attract and convert customers.
Financing The Business: estimate your start-up costs, project your monthly operating budget for the first year, outline your ROI (return on investment) and cash flow for the first year, project your income and expense balance sheet for the first two years, explain how you're going to compensate yourself, establish who will maintain the accounting records and how they'll be maintained, and if you're in need of funding, explain how much you need and how it'll be used by the business.
Managing The Business: how will the business be managed day-to-day, what the hiring and personnel procedures will be, how the products or services will be developed and how they'll get into the hands of your customers. You'll also need to account for equipment the business will need, and how insurance, rental agreements, etc. will be handled.
That's it. In a nutshell.
If you'd like to see some free sample business plans to get a better idea of how they're structured and how they read, here's a good source for you: http://www.bplans.com/sp/businessplans.cfm
Raising Capital for Your Business - How Long Does it Take?
Most companies vastly underestimate the time commitment necessary to successfully complete a financing. In actuality, a company seeking financing needs to budget between 500 to 1000 work-hours to the capital-raising process, spread out over a 6-9 month time period.
The key processes in the capital-raising process include 1) perfecting the business plan, offering memorandum, and other company due diligence materials, 2) developing a comprehensive, targeted prospective investor list, 3) contacting this list and responding to investor due diligence requests, and 4) negotiating the transaction.
Completing the business plan typically requires at least 200 hours of work. This time is dedicated to conducting the market research to validate the opportunity, developing a comprehensive financial model, determining the most effective way to lay out the business strategy, and actually writing and proofing the business plan.
The next step, developing a comprehensive, targeted prospective investor list is also very time consuming. There are thousands of potential investors, each of which has very different tastes regarding the types of ventures that interest them. Some invest by market sector (e.g., healthcare vs. telecommunications), stage (seed stage vs. later stage), geography, or a combination of these. Many hours must be dedicated to determine which investors are the right fit for your venture. This process involves creating a master investor list, visiting each investor's website to view investment criteria and past investments, and determining who is the right contact at the firm.
To see how easily the time adds up, consider that only about 25% of prospective investors who show an initial interest in a transaction actually progress to detailed company due diligence. Only about 10% of this 25% actually progress to a bonafide offer of funds, of which only 25% of these actually result in an investment transaction. So completing a financing transaction requires, on average, contacting approximately 160 pre-qualified prospective investors.
The due diligence process, where investors scrutinize the investment, can also be very time consuming for the company. Investors often request many documents, some of which can be easily retrieved from files (e.g., prior tax returns), while others may take more time to prepare (e.g., additional market analysis, customer lists with past purchases, contact information, etc.). Finally, negotiating a transaction can take a significant amount of time depending upon the complexity of the transaction and number of parties involved.
Too many companies fail to raise capital since they are unaware of the significant time requirements to do so. Those firms who understand these requirements and budget accordingly are the ones most likely to persevere and end up with the capital they need
The key processes in the capital-raising process include 1) perfecting the business plan, offering memorandum, and other company due diligence materials, 2) developing a comprehensive, targeted prospective investor list, 3) contacting this list and responding to investor due diligence requests, and 4) negotiating the transaction.
Completing the business plan typically requires at least 200 hours of work. This time is dedicated to conducting the market research to validate the opportunity, developing a comprehensive financial model, determining the most effective way to lay out the business strategy, and actually writing and proofing the business plan.
The next step, developing a comprehensive, targeted prospective investor list is also very time consuming. There are thousands of potential investors, each of which has very different tastes regarding the types of ventures that interest them. Some invest by market sector (e.g., healthcare vs. telecommunications), stage (seed stage vs. later stage), geography, or a combination of these. Many hours must be dedicated to determine which investors are the right fit for your venture. This process involves creating a master investor list, visiting each investor's website to view investment criteria and past investments, and determining who is the right contact at the firm.
To see how easily the time adds up, consider that only about 25% of prospective investors who show an initial interest in a transaction actually progress to detailed company due diligence. Only about 10% of this 25% actually progress to a bonafide offer of funds, of which only 25% of these actually result in an investment transaction. So completing a financing transaction requires, on average, contacting approximately 160 pre-qualified prospective investors.
The due diligence process, where investors scrutinize the investment, can also be very time consuming for the company. Investors often request many documents, some of which can be easily retrieved from files (e.g., prior tax returns), while others may take more time to prepare (e.g., additional market analysis, customer lists with past purchases, contact information, etc.). Finally, negotiating a transaction can take a significant amount of time depending upon the complexity of the transaction and number of parties involved.
Too many companies fail to raise capital since they are unaware of the significant time requirements to do so. Those firms who understand these requirements and budget accordingly are the ones most likely to persevere and end up with the capital they need
Sunday, October 12, 2008
In Business Planning, Competition is Good
When developing the competition section of your business plan, companies must define competition correctly, select the appropriate competitors to analyze, and explain its competitive advantages.
To start, companies must align their definition of competition with investors. Investors define competition as any service or product that a customer can use to fulfill the same need(s) as the company fulfills. This includes firms that offer similar products, substitute products and other customer options (such as performing the service or building the product themselves). Under this broad definition, any business plan that claims there are no competitors greatly undermines the credibility of the management team.
In identifying competitors, companies often find themselves in a difficult position. On one hand, they want to show that they are unique (even under the investors broad definition) and list no or few competitors. However, this has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customer need to support the company’s products and/or services.
Business plans must detail direct and, when applicable, indirect competitors. Direct competitors are those that serve the same target market with similar products and services. Indirect competitors are those that serve the same target market with different products and services, or a different target market with similar products and services.
After identifying competitors, the business plan must describe them. In doing so, the plan must also objectively analyze each competitor’s strengths and weaknesses and the key drivers of competitive differentiation in the marketplace.
Perhaps most importantly, the competition section must describe the company's competitive advantages over the other firms, and ideally how the company's business model creates barriers to entry. “Barriers to entry” are reasons why customers will not leave once acquired.
In summary, too many business plans want to show how unique their venture is and, as such, list no or few competitors. However, this often has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customer need to support the venture's products and/or services. In fact, when positioned properly, including successful and/or public companies in a competitive space can be a positive sign since it implies that the market size is big. It also gives investors the assurance that if management executes well, the venture has substantial profit and liquidity potential.
To start, companies must align their definition of competition with investors. Investors define competition as any service or product that a customer can use to fulfill the same need(s) as the company fulfills. This includes firms that offer similar products, substitute products and other customer options (such as performing the service or building the product themselves). Under this broad definition, any business plan that claims there are no competitors greatly undermines the credibility of the management team.
In identifying competitors, companies often find themselves in a difficult position. On one hand, they want to show that they are unique (even under the investors broad definition) and list no or few competitors. However, this has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customer need to support the company’s products and/or services.
Business plans must detail direct and, when applicable, indirect competitors. Direct competitors are those that serve the same target market with similar products and services. Indirect competitors are those that serve the same target market with different products and services, or a different target market with similar products and services.
After identifying competitors, the business plan must describe them. In doing so, the plan must also objectively analyze each competitor’s strengths and weaknesses and the key drivers of competitive differentiation in the marketplace.
Perhaps most importantly, the competition section must describe the company's competitive advantages over the other firms, and ideally how the company's business model creates barriers to entry. “Barriers to entry” are reasons why customers will not leave once acquired.
In summary, too many business plans want to show how unique their venture is and, as such, list no or few competitors. However, this often has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customer need to support the venture's products and/or services. In fact, when positioned properly, including successful and/or public companies in a competitive space can be a positive sign since it implies that the market size is big. It also gives investors the assurance that if management executes well, the venture has substantial profit and liquidity potential.
Why Doesn't Your Business Plan Consistently Secure Your Desired Results?
From small businesses to large corporations, when you render all the challenges and issues facing these economic engines from employees to growth and innovation, the inability to secure desired results or implementation always float to the top as the number one to number three obstacles that prevent business success. As a business owner or management executive, have you ever asked yourself one of these five questions:
1. How do I move from my vision to my desired results?
2. How do I get my employees to perform?
3. How do I recruit new employees with the skills that my company needs?
4. How do I attract new customers or clients?
5. Why can’t I consistently achieve my desired results?
All of these questions when rendered down are about implementation. The failure to implement each corporate wide business goal consumes valuable resources specifically time, people and money. These resources may have been already allocated to other initiatives.
Effective implementation is what separates the successful companies from the not so successful ones. Many authors from Rick Page in -Hope is not a Strategy to Jason Jennings and Laurence Haughton in It's Not the Big that Eat the Small, It's the Fast that East the Slow write about the affects of poor implementation.
Possibly why implementation continues to vex today's businesses is because executives search for an ineffective answer through a business plan instead of a strategic business plan. A recent search using Inventory Overture revealed that searches for business plan were over 200 times as many as for strategic business plan (148,650 vs. 614). From these searches, it suggests that business owners may be looking for the wrong answer.
Why choose a strategic business plan over a business plan? The answer is simple because a strategic business plan defines “Who Does What By When” through the critical success factors and supporting goals that are in alignment with the sales and marketing plans.
The structure of a strategic business plan is all about implementation. Using the ADDIE Plus methodology may help you in your efforts to create an effective strategic business plan.
Assess - The current market conditions, future market conditions and the organization need to be assessed. This evaluation should begin with an overall organizational assessment and may extend to internal and external customers.
Design After the evaluation, a design is crafted. This design should include the vision, values and mission of the organization and is overall architecture for the plan. Simply, speaking this is the Big Picture.
Develop The plan is developed according to the structure of the organization. Smaller plans or pictures such as marketing and sales fit within the overall plan.
Implement - Using specific goal setting and goal achievement, the strategic plan is implemented. At this juncture, who does what by when is identified.
Evaluate Goal achievement is the mechanism to monitor and evaluate successful implementation.
Plus - Follow-up is the plus to ensure necessary course correction that may again require some new assessments along with design, development, implementation and evaluation.
Using the ADDIE+ methodology provides business owners a consistent vehicle from which to create, monitor, evaluate and follow-up on their strategic business plan.
If you truly want to reach that next level of success by bridging the implementation gaps, stop focusing on a business plan and take the time to create a strategic business plan that clearly defines who does what by when.
1. How do I move from my vision to my desired results?
2. How do I get my employees to perform?
3. How do I recruit new employees with the skills that my company needs?
4. How do I attract new customers or clients?
5. Why can’t I consistently achieve my desired results?
All of these questions when rendered down are about implementation. The failure to implement each corporate wide business goal consumes valuable resources specifically time, people and money. These resources may have been already allocated to other initiatives.
Effective implementation is what separates the successful companies from the not so successful ones. Many authors from Rick Page in -Hope is not a Strategy to Jason Jennings and Laurence Haughton in It's Not the Big that Eat the Small, It's the Fast that East the Slow write about the affects of poor implementation.
Possibly why implementation continues to vex today's businesses is because executives search for an ineffective answer through a business plan instead of a strategic business plan. A recent search using Inventory Overture revealed that searches for business plan were over 200 times as many as for strategic business plan (148,650 vs. 614). From these searches, it suggests that business owners may be looking for the wrong answer.
Why choose a strategic business plan over a business plan? The answer is simple because a strategic business plan defines “Who Does What By When” through the critical success factors and supporting goals that are in alignment with the sales and marketing plans.
The structure of a strategic business plan is all about implementation. Using the ADDIE Plus methodology may help you in your efforts to create an effective strategic business plan.
Assess - The current market conditions, future market conditions and the organization need to be assessed. This evaluation should begin with an overall organizational assessment and may extend to internal and external customers.
Design After the evaluation, a design is crafted. This design should include the vision, values and mission of the organization and is overall architecture for the plan. Simply, speaking this is the Big Picture.
Develop The plan is developed according to the structure of the organization. Smaller plans or pictures such as marketing and sales fit within the overall plan.
Implement - Using specific goal setting and goal achievement, the strategic plan is implemented. At this juncture, who does what by when is identified.
Evaluate Goal achievement is the mechanism to monitor and evaluate successful implementation.
Plus - Follow-up is the plus to ensure necessary course correction that may again require some new assessments along with design, development, implementation and evaluation.
Using the ADDIE+ methodology provides business owners a consistent vehicle from which to create, monitor, evaluate and follow-up on their strategic business plan.
If you truly want to reach that next level of success by bridging the implementation gaps, stop focusing on a business plan and take the time to create a strategic business plan that clearly defines who does what by when.
Incorporating Investor Feedback into Your Business Plan
Investors, like the rest of us, have different tastes. One investor may love a concept and/or business plan while the next may hate both. It is important to understand this as business plans are working documents and are always undergoing iterations.
Management teams must not rush to incorporate each potential investor's comments. Instead, have several investors, partners and other business colleagues review the plan and provide feedback. Then incorporate common concerns and probe other comments to determine if they are valid.
Always try to understand the rationale behind an investor's comments. For instance, an investor may poke holes in a business plan if it doesn't have enough funds to fully fund the opportunity. In this case, the investor's criticism is solely for them to save face.
However, if you are hearing the same feedback from multiple investors, it is probably valid. In such cases, be humble. Tell investors that you appreciate their feedback and modify your strategy and plan appropriately. You may then be able to re-approach these investors with great success.
Many investors have significant operating and investing experience and can quickly and expertly find potential flaws in a business plan. Seek out investors who have such experience, and be open to their suggestions. Just don't take one point of feedback and blindly follow their advice. It is also important to note that even the most successful and largest public companies have Boards that provide similar feedback and advice, so don't take criticism and feedback as a sign that something is wrong with your venture. Rather, use it as a launching pad for an even stronger business.
Management teams must not rush to incorporate each potential investor's comments. Instead, have several investors, partners and other business colleagues review the plan and provide feedback. Then incorporate common concerns and probe other comments to determine if they are valid.
Always try to understand the rationale behind an investor's comments. For instance, an investor may poke holes in a business plan if it doesn't have enough funds to fully fund the opportunity. In this case, the investor's criticism is solely for them to save face.
However, if you are hearing the same feedback from multiple investors, it is probably valid. In such cases, be humble. Tell investors that you appreciate their feedback and modify your strategy and plan appropriately. You may then be able to re-approach these investors with great success.
Many investors have significant operating and investing experience and can quickly and expertly find potential flaws in a business plan. Seek out investors who have such experience, and be open to their suggestions. Just don't take one point of feedback and blindly follow their advice. It is also important to note that even the most successful and largest public companies have Boards that provide similar feedback and advice, so don't take criticism and feedback as a sign that something is wrong with your venture. Rather, use it as a launching pad for an even stronger business.
What is an Investor Ready Business Plan
A Business Plan, as all good entrepreneurs starting out in life should know is the foundation, or rather a springboard, towards the establishment and growth of a new business. A business plan is an essential tool for companies raising capital and your business plan needs to be Investor Ready.
What is an Investor Ready business plan?
An investor ready business plan is a document that has been professionally prepared to meet the needs of both Venture Capitalists and Angel investors. In your Business Plan, you should be able to see your own project through the investor's eye. Your plan must be able to answer the concerns of an investor.
The investors, both VCs and angels, are risking their hard earned capital by investing in your venture in the hope of long term returns that are worth many times their original investment. An Investor Ready Business Plan demonstrates to investors that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by prepareing a comprehensive and detailed view of their business objectives and goals. Some important sections that address different concerns of the investors are below:
Management
Investors invest in management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions.
Customers
It is important to communicate to the investors that you understand the needs and requirements of your customers and to articulate your marketing strategy within your business plan.
Product/Service Description
A complete description of the product or the services offered by you should be outlined in detail. A description of the overall market for your product or service, along with the details of your customer base is essential. The investors need to know the reach and the kind of customers your product / service is catering to.
Marketing Plan
One of the most important sections of your business plan is your marketing plan. This section will outline your sustainable competitive advantage to your investors. In a way assure them why you will succeed where others have failed. This section is where you include a definitive description of your customers, market size, demographics, characteristics, growth prospects, trends and sales potential per product / service category.
Here is where the pricing strategies are outlined and how they can directly influence the growth potential of each product /service. It is also important to include the future growth, market share and trend influences.
Barriers to Entry
Along with giving the details of what your product / service is and who your customers are, you also have to inform your investors how you will you prevent your competitors from taking away your customers. The barriers to entry section outlines your business strategy to keep your competitors at bay and grow in the market. Investors need to feel comfortable about the soundness of your strategy before they invest in your venture.
What is an Investor Ready business plan?
An investor ready business plan is a document that has been professionally prepared to meet the needs of both Venture Capitalists and Angel investors. In your Business Plan, you should be able to see your own project through the investor's eye. Your plan must be able to answer the concerns of an investor.
The investors, both VCs and angels, are risking their hard earned capital by investing in your venture in the hope of long term returns that are worth many times their original investment. An Investor Ready Business Plan demonstrates to investors that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by prepareing a comprehensive and detailed view of their business objectives and goals. Some important sections that address different concerns of the investors are below:
Management
Investors invest in management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions.
Customers
It is important to communicate to the investors that you understand the needs and requirements of your customers and to articulate your marketing strategy within your business plan.
Product/Service Description
A complete description of the product or the services offered by you should be outlined in detail. A description of the overall market for your product or service, along with the details of your customer base is essential. The investors need to know the reach and the kind of customers your product / service is catering to.
Marketing Plan
One of the most important sections of your business plan is your marketing plan. This section will outline your sustainable competitive advantage to your investors. In a way assure them why you will succeed where others have failed. This section is where you include a definitive description of your customers, market size, demographics, characteristics, growth prospects, trends and sales potential per product / service category.
Here is where the pricing strategies are outlined and how they can directly influence the growth potential of each product /service. It is also important to include the future growth, market share and trend influences.
Barriers to Entry
Along with giving the details of what your product / service is and who your customers are, you also have to inform your investors how you will you prevent your competitors from taking away your customers. The barriers to entry section outlines your business strategy to keep your competitors at bay and grow in the market. Investors need to feel comfortable about the soundness of your strategy before they invest in your venture.
Business Plans- What Consultants Don't tell You!
Do you have a Business Plan? Congratulations, but you are in a small minority. And if you have a plan, is it integral to your business, and instrumental to its growth? If the answer to this question is yes, then you need to read no further. However, most business owners who actually go to the trouble to write a business plan have left it languishing on their bottom shelf, gathering dust! This is the dirty little secret of business consultants.
Most business consultants are only interested in selling their time or their -Business Plan in a Box- but know that for a business plan to be useful, it has to be part of a Business Management System. But this is a much harder proposition for the consultant to sell, particularly to small business owners who are just looking for a quick fix. So most consultants just sell a quick fix solution- a business plan that they know will, within months, end up on the bottom shelf. Once owners have prepared their fill in the blanks plan, they expect it to transform their business overnight just by its mere existence. And because this does not happen, they never look at it again.
Business Plans do work, but you have to make them work. It is not a one-off exercise. If you buy a ‘Business Plan in a Box', you need to understand that you are responsible for maintaining the plan. You also need to satisfy yourself that the product you buy is not just a fill in the blanks product. These plans always end up on the bottom shelf. They don't show you how to do your strategic analysis (which is never a fill in the blanks exercise- no matter what someone tells you).
Business Planning is a real soul searching exercise for the business owner. You have to be brutally honest with yourself. Even if you prepare your plan yourself (without a coach), get someone else involved to keep you honest! Looking at examples of what others have done can help, but your business will have different strengths and weaknesses and will operate in a different marketplace. And lastly, make sure any off-the-shelf product you choose will show you how to implement your plan into your business.
When you use a consultant, insist that they show you how the plan should be implemented into your business process. And have the consultant give you at least one review of your performance against your plan six months after the plan has been delivered. While this will cost you extra, this will ensure that your plan does not end up on the bottom shelf- because you know you will be held to account!
Business Planning is not an easy process. It takes time and commitment. You don't just do it once. This is not what business owners want to hear, and what most consultants won't tell you, because it might cost them a sale. But the rewards from a well implemented business plan are worth many times your investment.
Most business consultants are only interested in selling their time or their -Business Plan in a Box- but know that for a business plan to be useful, it has to be part of a Business Management System. But this is a much harder proposition for the consultant to sell, particularly to small business owners who are just looking for a quick fix. So most consultants just sell a quick fix solution- a business plan that they know will, within months, end up on the bottom shelf. Once owners have prepared their fill in the blanks plan, they expect it to transform their business overnight just by its mere existence. And because this does not happen, they never look at it again.
Business Plans do work, but you have to make them work. It is not a one-off exercise. If you buy a ‘Business Plan in a Box', you need to understand that you are responsible for maintaining the plan. You also need to satisfy yourself that the product you buy is not just a fill in the blanks product. These plans always end up on the bottom shelf. They don't show you how to do your strategic analysis (which is never a fill in the blanks exercise- no matter what someone tells you).
Business Planning is a real soul searching exercise for the business owner. You have to be brutally honest with yourself. Even if you prepare your plan yourself (without a coach), get someone else involved to keep you honest! Looking at examples of what others have done can help, but your business will have different strengths and weaknesses and will operate in a different marketplace. And lastly, make sure any off-the-shelf product you choose will show you how to implement your plan into your business.
When you use a consultant, insist that they show you how the plan should be implemented into your business process. And have the consultant give you at least one review of your performance against your plan six months after the plan has been delivered. While this will cost you extra, this will ensure that your plan does not end up on the bottom shelf- because you know you will be held to account!
Business Planning is not an easy process. It takes time and commitment. You don't just do it once. This is not what business owners want to hear, and what most consultants won't tell you, because it might cost them a sale. But the rewards from a well implemented business plan are worth many times your investment.
2 Types of Business Plan Executive Summaries
Companies seeking capital often ask how long the Executive Summary of their business plan should be. The answer depends upon the use of the summary, mainly determining if
1) it precedes the full business plan, or
2) it will be used as a stand-alone document.
When the Executive Summary precedes the business plan, its length should be short, typically only one to two pages and certainly no longer than three pages. This is because the Executive Summary is not meant to tell the whole story of the business opportunity. Rather, the summary must simply stimulate and motivate the investor to learn more about the company in the body of the plan.
The second type of Executive Summary is a stand-alone document. That is, it is given, by itself, to investors for their initial review. If interested, the investor will then request the full business plan. A stand-alone Executive Summary is often used to limit the flow of information. That is, if an investor is not interested in the general opportunity that your summary presents, you don’t want to reveal to them intimate details of your plan.
Regardless of which type of Executive Summary you are developing, the summary must included the following critical elements:
1. A concise explanation of the business
2. A description of the market size and market need for the business
3. A discussion of how the company is uniquely qualified to fulfill this need
In addition, a stand-alone Executive Summary should include summaries of each essential elements of the business plan. This includes paragraphs addressing each of the following:
- Customer Analysis: What specific customer segments the company is targeting and their demographic profiles
- Competition: Who the company's direct competitors are and the company's key competitive advantages
- Marketing Plan: How the company will effectively penetrate its target market
- Financial Plan: A summary of the financial projections of the company
- Management Team: Biographies of key management team and Board members
The Executive Summary is the most critical element of the business plan. If it does not grab the investor's attention, the investor will neither read nor request the full business plan. As such, spend time developing the best possible summary, create two versions (e.g., stand-alone and full plan predecessor) as appropriate, and work to get it in the hands of the right investors.
1) it precedes the full business plan, or
2) it will be used as a stand-alone document.
When the Executive Summary precedes the business plan, its length should be short, typically only one to two pages and certainly no longer than three pages. This is because the Executive Summary is not meant to tell the whole story of the business opportunity. Rather, the summary must simply stimulate and motivate the investor to learn more about the company in the body of the plan.
The second type of Executive Summary is a stand-alone document. That is, it is given, by itself, to investors for their initial review. If interested, the investor will then request the full business plan. A stand-alone Executive Summary is often used to limit the flow of information. That is, if an investor is not interested in the general opportunity that your summary presents, you don’t want to reveal to them intimate details of your plan.
Regardless of which type of Executive Summary you are developing, the summary must included the following critical elements:
1. A concise explanation of the business
2. A description of the market size and market need for the business
3. A discussion of how the company is uniquely qualified to fulfill this need
In addition, a stand-alone Executive Summary should include summaries of each essential elements of the business plan. This includes paragraphs addressing each of the following:
- Customer Analysis: What specific customer segments the company is targeting and their demographic profiles
- Competition: Who the company's direct competitors are and the company's key competitive advantages
- Marketing Plan: How the company will effectively penetrate its target market
- Financial Plan: A summary of the financial projections of the company
- Management Team: Biographies of key management team and Board members
The Executive Summary is the most critical element of the business plan. If it does not grab the investor's attention, the investor will neither read nor request the full business plan. As such, spend time developing the best possible summary, create two versions (e.g., stand-alone and full plan predecessor) as appropriate, and work to get it in the hands of the right investors.
The Key to a Successful Business
Where would a business be without a business plan?
A business plan sets the course for the future of the
business. It gives the business owner or manager a
sense of direction, listing the objectives and goals of
the business from the outset.
Writing a business plan requires a lot of time; a
successful business plan cannot be a rush job. Once
an idea for a business has been developed,
researching the many facets of owning and operating a
business is the next most important step. Your local
county council should be able to assist you with
accessing the required information of a legal nature, as
should your local business enterprise center. The rest
of the research will be up to you! You will need to
research products for your business, at the same time
as researching other enterprises that may be in direct
competition to you. Furthermore, you need to research
the market to determine whether there is a need for
your business product or service.
With the research out of the way, sitting down to write
a business plan requires focus. Your business plan will
become the bible of your business for at least the next
3 to 5 years so it is important to make it clear, concise
and comprehensive. Most enterprises will complete a
SWOT analysis to determine their strengths,
weaknesses, opportunities and threats of the
business. Whilst the business is in infancy,
brainstorming would be the most accurate way of
performing the analysis, as the business would not yet
have customers and profitability would not yet have
been experienced. However, it is very important to
remember that a good business plan is flexible and
can be changed as your business experiences growth.
After completing a SWOT analysis, you will need to
determine your business name if it has not already
been decided (and register it), as well as your vision
and values, your business goals and long term mission
and how you will achieve all of this when the business
is up and running. Writing every thought down
regardless of how minute you feel it is will allow you to
collate everything pertinent to your business for easy
reference in the future. Who knows, the thought or idea
that you have today may well turn into a million dollar
idea in a years time! Maintaining good records and
following a strong business plan is the key to a
successful business!
A business plan sets the course for the future of the
business. It gives the business owner or manager a
sense of direction, listing the objectives and goals of
the business from the outset.
Writing a business plan requires a lot of time; a
successful business plan cannot be a rush job. Once
an idea for a business has been developed,
researching the many facets of owning and operating a
business is the next most important step. Your local
county council should be able to assist you with
accessing the required information of a legal nature, as
should your local business enterprise center. The rest
of the research will be up to you! You will need to
research products for your business, at the same time
as researching other enterprises that may be in direct
competition to you. Furthermore, you need to research
the market to determine whether there is a need for
your business product or service.
With the research out of the way, sitting down to write
a business plan requires focus. Your business plan will
become the bible of your business for at least the next
3 to 5 years so it is important to make it clear, concise
and comprehensive. Most enterprises will complete a
SWOT analysis to determine their strengths,
weaknesses, opportunities and threats of the
business. Whilst the business is in infancy,
brainstorming would be the most accurate way of
performing the analysis, as the business would not yet
have customers and profitability would not yet have
been experienced. However, it is very important to
remember that a good business plan is flexible and
can be changed as your business experiences growth.
After completing a SWOT analysis, you will need to
determine your business name if it has not already
been decided (and register it), as well as your vision
and values, your business goals and long term mission
and how you will achieve all of this when the business
is up and running. Writing every thought down
regardless of how minute you feel it is will allow you to
collate everything pertinent to your business for easy
reference in the future. Who knows, the thought or idea
that you have today may well turn into a million dollar
idea in a years time! Maintaining good records and
following a strong business plan is the key to a
successful business!
Why Should You Have a Business Plan?
Are you planning to start a new business? Or are you considering
expanding your current business and require a bank loan or
investment from outsiders?
If you are going to look for an investment of capital it is quite
likely that you will be required to have a business plan. If you
are starting a business, despite the work involved, a business
plan can prepare you for the obstacles ahead and help ensure your
success.
A business plan is something that many small businesses fail to
create, however, many business owners are adamant that having a
written business plan is one of the keys to their present
success. Creating a business plan forces you to contemplate
possible obstacles to your business and prepares you to find
solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that
you have the experience or resources to run the business. They
will want to see your projected income as well as your suggested
repayment plan already laid out. Taking the time to do this is
not only important for them, but it gives you a measuring tool to
verify if your business is growing properly. You can gage your
success on how close to the plan your business has actually
performed. Perhaps you'll do worse, or perhaps you'll do better,
either way it helps you determine how well your business is
getting on.
If you have never seen a business plan before you may be
concerned that is is too difficult a proposition for you to
manage on your own.
While there are services available where you can hire someone to
write a business plan for you, depending on your needs it may be
wise to familiarize yourself with a business plan's layout. This
will not only help you to provide the necessary information, but
may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in
creating a business plan. Some of the topics you will be required
to explain are your Market, Customer, Competition, Marketing
Plan, Research & Development along with financial forecasts. You
may consider hiring someone to help you with your financial
sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business
partner - indicating where you need to improve and helping you
stay one step ahead of your competition. Make it a priority to
have this crucial road map for your business
expanding your current business and require a bank loan or
investment from outsiders?
If you are going to look for an investment of capital it is quite
likely that you will be required to have a business plan. If you
are starting a business, despite the work involved, a business
plan can prepare you for the obstacles ahead and help ensure your
success.
A business plan is something that many small businesses fail to
create, however, many business owners are adamant that having a
written business plan is one of the keys to their present
success. Creating a business plan forces you to contemplate
possible obstacles to your business and prepares you to find
solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that
you have the experience or resources to run the business. They
will want to see your projected income as well as your suggested
repayment plan already laid out. Taking the time to do this is
not only important for them, but it gives you a measuring tool to
verify if your business is growing properly. You can gage your
success on how close to the plan your business has actually
performed. Perhaps you'll do worse, or perhaps you'll do better,
either way it helps you determine how well your business is
getting on.
If you have never seen a business plan before you may be
concerned that is is too difficult a proposition for you to
manage on your own.
While there are services available where you can hire someone to
write a business plan for you, depending on your needs it may be
wise to familiarize yourself with a business plan's layout. This
will not only help you to provide the necessary information, but
may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in
creating a business plan. Some of the topics you will be required
to explain are your Market, Customer, Competition, Marketing
Plan, Research & Development along with financial forecasts. You
may consider hiring someone to help you with your financial
sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business
partner - indicating where you need to improve and helping you
stay one step ahead of your competition. Make it a priority to
have this crucial road map for your business
Documenting the Exit Strategy in Your Business Plan
All investors greatly desire and are motivated by a clear picture of a company's exit strategy, or the timing and method through which they can -cash in- on their investment. This picture best comes into focus when the key valuation and liquidity drivers of the company are clearly delineated. An excellent method to accomplish this is through descriptions of comparable firms that have had successful liquidity events, either through acquisition, merger, of initial public offerings (IPOs).
It is helpful to show other companies in your market, or similar companies in other markets, who have successfully exited, and how and why these companies were successful. For instance, were they successful since they acquired a large customer base? Or were they successful since they accomplished fast growth or high profit margins? It is also important to tie their success to their exit price. Was the exit price based on earnings or the number of customers the firm had at the time? The business plan should tie these metrics (e.g., exit price of $X per customer) to the business to determine its future price.
The most common exit strategies in business plans are IPOs or acquisitions. While the method of exit is not always crucial, the investor often wants to see the decision to better understand the management team's motivation and commitment to building long-term value. If acquisition is the selected exit path, then the business plan should detail potential companies that might want to acquire the firm in the future and why. Likewise, if an IPO is expected in the future, the business plan should document the financial metrics of the company that make it ripe for this type of exit.
In most cases, investors only make money when the business reaches a successful exit event. As such, it is critical that business plans explain the expected exit, detail why this exit was chosen and validate a realistic exit price.
It is helpful to show other companies in your market, or similar companies in other markets, who have successfully exited, and how and why these companies were successful. For instance, were they successful since they acquired a large customer base? Or were they successful since they accomplished fast growth or high profit margins? It is also important to tie their success to their exit price. Was the exit price based on earnings or the number of customers the firm had at the time? The business plan should tie these metrics (e.g., exit price of $X per customer) to the business to determine its future price.
The most common exit strategies in business plans are IPOs or acquisitions. While the method of exit is not always crucial, the investor often wants to see the decision to better understand the management team's motivation and commitment to building long-term value. If acquisition is the selected exit path, then the business plan should detail potential companies that might want to acquire the firm in the future and why. Likewise, if an IPO is expected in the future, the business plan should document the financial metrics of the company that make it ripe for this type of exit.
In most cases, investors only make money when the business reaches a successful exit event. As such, it is critical that business plans explain the expected exit, detail why this exit was chosen and validate a realistic exit price.
The Ideal Length of Your Business Plan
How long should a business plan be? A business plan needs to be whatever length is required to excite the investor, prove that management truly understands the market, and detail the execution strategy. From surveys of investor needs, Growthink has found that 15 to 25 pages of text is the optimum length in which to accomplish this. Any more and the time-constrained investor will be forced to skim certain sections of the plan, even if they are generally interested, which could lead them to miss essential elements. Any less and the investor will think that the business has not been fully thought through, or will simply not have enough information to make an investment decision.
Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the business plan is not meant to tell the whole story. Rather, the company must be boiled down- into its essential elements. If the investor is interested, there will be plenty of additional time to tell the whole story.
Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company's value proposition within fewer pages.
While the body of the business plan should be 15 to 25 pages, the Appendix can be used for supplemental information. The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.
If the Appendix is long, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick business plan, which will make them queasy before even opening it up.
To summarize, the goal of the business plan is to create interest not to have an investor write you a check. In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. As Mark Twain once said, If I had more time, I would write a shorter story.- Likewise, condensing your business plan to a concise, compelling document is challenging and time consuming. Fortunately the rewards are significant.
Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the business plan is not meant to tell the whole story. Rather, the company must be boiled down- into its essential elements. If the investor is interested, there will be plenty of additional time to tell the whole story.
Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company's value proposition within fewer pages.
While the body of the business plan should be 15 to 25 pages, the Appendix can be used for supplemental information. The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.
If the Appendix is long, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick business plan, which will make them queasy before even opening it up.
To summarize, the goal of the business plan is to create interest not to have an investor write you a check. In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. As Mark Twain once said, If I had more time, I would write a shorter story.- Likewise, condensing your business plan to a concise, compelling document is challenging and time consuming. Fortunately the rewards are significant.
5 Crucial Components Of A Business Plan
The format of a Business Plan is something that has been developed and refined over the years and is something that should not be changed. Like a good recipe, a business plan needs to include certain ingredients to make it work.
When you create a business plan, don't attempt to recreate its format. Those reviewing this type of document have expectations you must meet. If they do not see those crucial decision-making components, they'll see no reason to proceed with their review of your business plan, no matter how great your business idea.
Executive Summary Section
Every business plan must begin with an Executive Summary section. A well-written Executive Summary is critical to the success of the rest of the document. Here is where you need to capture the attention of your audience so that they will be compelled to read on. Remember, it's a summary, so each and every word must be carefully selected and presented.
Use the Executive Summary section of your business plan to accurately describe the nature of your business venture including the need that you plan to fill. Show the reasons why people need your product or service. Show this by including a brief analysis of the characteristics of your potential market.
Describe the organization of your business including your management team. Also, briefly describe your sales and marketing plan or approach. Finally include the numbers that those reviewing your business plan want to see - the amount of capital you seek, the carefully calculated sales projections and your plan to repay the loan.
If you've captured your audience so far they all read on. Otherwise, they'll close the document and add your business plan to the heap of other rejected ideas.
Devote the balance of your business plan to providing details of the items outlined in the Executive Summary.
The Business Section
Be sure to include the legal name, physical address and detailed description of the nature of your business. It's important to keep the description easy to read using common terminology. Never assume that those reading your business plan have the same level of technical knowledge that you do. Describe how you plan to better serve your market than your competition is currently doing.
Market Analysis Section
An analysis of the market shows that you have done your homework. This section is basically a summary of your Marketing Plan. It needs to show the demand for your product or service, the proposed market, trends within the industry, a description of your pricing plan and packaging and a description of your company policies.
Financing Section
The Financing section must show that you are as committed to your business venture as you expect those reading your business plan to be. Show the amount of personal funds you are contributing and their source. Also include the amount of capital you need and your plan to repay this debt. Include all pertinent financial worksheets in this section: annual income projections, a break-even worksheet, projected cash flow statements and a balance sheet.
Management Section
Outline your organizational structure and management team here. Include the legal structure of your business whether it is a partnership, corporation or limited liability corporation. Include resumes and biographies of key players on your management team. Show staffing projection data for the next few years.
By now you're probably thinking that you don't need Business Plan just yet. Well you do, and there is business plan building software that can help you through this immense project. These software packages are easy to use and affordable. Use one today and produce a professional-quality Business Plan - including all critical components - tomorrow!
When you create a business plan, don't attempt to recreate its format. Those reviewing this type of document have expectations you must meet. If they do not see those crucial decision-making components, they'll see no reason to proceed with their review of your business plan, no matter how great your business idea.
Executive Summary Section
Every business plan must begin with an Executive Summary section. A well-written Executive Summary is critical to the success of the rest of the document. Here is where you need to capture the attention of your audience so that they will be compelled to read on. Remember, it's a summary, so each and every word must be carefully selected and presented.
Use the Executive Summary section of your business plan to accurately describe the nature of your business venture including the need that you plan to fill. Show the reasons why people need your product or service. Show this by including a brief analysis of the characteristics of your potential market.
Describe the organization of your business including your management team. Also, briefly describe your sales and marketing plan or approach. Finally include the numbers that those reviewing your business plan want to see - the amount of capital you seek, the carefully calculated sales projections and your plan to repay the loan.
If you've captured your audience so far they all read on. Otherwise, they'll close the document and add your business plan to the heap of other rejected ideas.
Devote the balance of your business plan to providing details of the items outlined in the Executive Summary.
The Business Section
Be sure to include the legal name, physical address and detailed description of the nature of your business. It's important to keep the description easy to read using common terminology. Never assume that those reading your business plan have the same level of technical knowledge that you do. Describe how you plan to better serve your market than your competition is currently doing.
Market Analysis Section
An analysis of the market shows that you have done your homework. This section is basically a summary of your Marketing Plan. It needs to show the demand for your product or service, the proposed market, trends within the industry, a description of your pricing plan and packaging and a description of your company policies.
Financing Section
The Financing section must show that you are as committed to your business venture as you expect those reading your business plan to be. Show the amount of personal funds you are contributing and their source. Also include the amount of capital you need and your plan to repay this debt. Include all pertinent financial worksheets in this section: annual income projections, a break-even worksheet, projected cash flow statements and a balance sheet.
Management Section
Outline your organizational structure and management team here. Include the legal structure of your business whether it is a partnership, corporation or limited liability corporation. Include resumes and biographies of key players on your management team. Show staffing projection data for the next few years.
By now you're probably thinking that you don't need Business Plan just yet. Well you do, and there is business plan building software that can help you through this immense project. These software packages are easy to use and affordable. Use one today and produce a professional-quality Business Plan - including all critical components - tomorrow!
Saturday, October 11, 2008
Your Business Plan Will Become Your Partner
Are you planning to start a new business? Or are you considering expanding your current business and require a bank loan or investment from outsiders?
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
A Critical Component of a Winning Business Plan
Business plans continue to be an essential element of the capital-raising process. They must convince investors to take notice - investors that are shrewder today due to the ups-and-downs they have experienced over the past few years.
Adding to the financing challenge is the plethora of high-quality companies, both public and private, in which investors can choose to invest. In this environment, more and more investors are asking companies seeking capital the question "Why You, Why Now"?
The question seems simple at first, but has many complexities. The management team must clearly delineate what it is about the business opportunity that makes it such a good investment now. Should this investment have been made a year ago to cement a market leadership position? Or, is the venture before its time - will slow market adoption cause slow sales over the next few years, and as such, should the investment wait. Questions like these, based on investment failures from the past few years, continue to surface and must be addressed by the management team in their business plans.
Likewise the team must address what it is that makes them uniquely qualified to succeed. Does the team have proprietary (and protectable) technology, management talent and experience that competitors do not, long-term strategic partners? According to Growthink president, Dave Lavinsky, "Management teams must prove to investors why they are unique and why they will succeed. They can't just state how wonderful they are - they need to prove it through detailing past successes and unique qualifications."
A business plan that fails to address the "Why You, Why Now" question, is most likely a business plan that will remain in the stack of "not now" business plans. Business plans must present a compelling argument as to why the investor should invest and in our fast-paced world with unbelievable opportunities and opportunity costs, why investors should invest now.
Adding to the financing challenge is the plethora of high-quality companies, both public and private, in which investors can choose to invest. In this environment, more and more investors are asking companies seeking capital the question "Why You, Why Now"?
The question seems simple at first, but has many complexities. The management team must clearly delineate what it is about the business opportunity that makes it such a good investment now. Should this investment have been made a year ago to cement a market leadership position? Or, is the venture before its time - will slow market adoption cause slow sales over the next few years, and as such, should the investment wait. Questions like these, based on investment failures from the past few years, continue to surface and must be addressed by the management team in their business plans.
Likewise the team must address what it is that makes them uniquely qualified to succeed. Does the team have proprietary (and protectable) technology, management talent and experience that competitors do not, long-term strategic partners? According to Growthink president, Dave Lavinsky, "Management teams must prove to investors why they are unique and why they will succeed. They can't just state how wonderful they are - they need to prove it through detailing past successes and unique qualifications."
A business plan that fails to address the "Why You, Why Now" question, is most likely a business plan that will remain in the stack of "not now" business plans. Business plans must present a compelling argument as to why the investor should invest and in our fast-paced world with unbelievable opportunities and opportunity costs, why investors should invest now.
Developing Realistic Financial Assumptions in Your Business Plan
Many investors skip beeline to the banking area of the business plan. It is analytical that the assumptions and projections in this area be realistic. Plans that appearance penetration, operating allowance and revenues per agent abstracts that are ailing reasoned, internally inconsistent or artlessly unrealistic abundantly accident the believability of the absolute business plan. In contrast, sober, alive banking assumptions and projections acquaint operational ability and credibility.
For instance, if the aggregation is categorized as a networking basement firm, and the business plan projects 80% operating margins, investors will accession a red flag. This is because investors can readily admission the operating margins of publicly-traded networking basement firms and acquisition that none accept operating margins this high.
As abundant as possible, the banking assumptions should be based on absolute after-effects from your or added firms. As the archetype aloft indicates, it is adequately simple to attending at a accessible company’s operating margins and use these margins to almost your own. Likewise, the business plan should abject acquirement advance on added firms. Many firms acquisition this impossible, back they accept they accept a break-through artefact in their market, and no added aggregation compares. In such a case, abject acquirement advance on companies in added industries that accept had break-through products. If you apprehend to abound even faster than they did (maybe because of new technologies that those firms weren’t able to employ), you can cover added advancing assumptions in your business plan as continued as you explain them in the text.
The financials can either enhance or decidedly abuse your business plan’s affairs of acceptable you in the capital-raising process. By accomplishing the analysis to advance astute assumptions, based on absolute after-effects of your or added companies, the financials can bolster your firm’s affairs of acceptable investors. As importantly, the added astute financials will aswell accommodate a bigger roadmap for your company’s success.
The importance of planning
Are you planning to alpha a new business? Or are you because accretion your accepted business and crave a coffer accommodation or investment from outsiders?
If you are traveling to attending for an investment of basic it is absolutely acceptable that you will be appropriate to accept a business plan. If you are starting a business, admitting the plan involved, a business plan can adapt you for the obstacles advanced and advice ensure your success.
A business plan is something that abounding baby businesses abort to create, however, abounding business owners are determined that accepting a accounting business plan is one of the keys to their present success. Creating a business plan armament you to contemplate accessible obstacles to your business and prepares you to acquisition solutions that will advice you to affected them.
To acquisition investors or get a coffer loan, they will wish to see that you accept the acquaintance or assets to run the business. They will wish to see your projected assets as able-bodied as your appropriate claim plan already laid out. Taking the time to do this is not alone important for them, but it gives you a barometer apparatus to verify if your business is growing properly. You can cuff your success on how abutting to the plan your business has in fact performed. Conceivably you'll do worse, or conceivably you'll do better, either way it helps you actuate how able-bodied your business is accepting on.
If you accept never apparent a business plan afore you may be anxious that is is too difficult a hypothesis for you to administer on your own.
While there are casework accessible area you can appoint anyone to address a business plan for you, depending on your needs it may be astute to accustom yourself with a business plan's layout. This will not alone advice you to accommodate the all-important information, but may animate you to try your own duke at it.
There's a chargeless apparatus at www.bdc.ca which will abetment you in creating a business plan. Some of the capacity you will be appropriate to explain are your Market, Customer, Competition, Marketing Plan, Research & Development forth with banking forecasts. You may accede hiring anyone to advice you with your banking bedding afterwards commutual the accounting allotment of the Business Plan.
Your Business Plan will become your adviser and bashful business accomplice - advertence area you charge to advance and allowance you break one footfall advanced of your competition. Make it a antecedence to accept this acute alley map for your business.
How to Use Graphs and Archive in Your Business Plan
Many humans ask how abounding graphs or archive they should accept in their business plans. As with a lot of added business planning questions, the acknowledgment is “it depends”. This commodity discusses the key factors influencing the bulk of graphs and archive to cover in your business plan.
To begin, the key point to accede in developing your business plan is the time restraints of your audience. If your admirers is a retired angel investor, he may accept few obligations and can absorb an hour reviewing your business plan. However, the added acceptable book is that a adventure capitalist, accumulated broker or accommodation administrator will analysis your plan while sitting at a board topped with fifty added business plans. As such, it is analytical that your plan conveys its key credibility bound and calmly – this is area graphs or archive appear in.
In free whether to use a blueprint or chart, accede the old adage, “a account is account a thousand words.” The point actuality is that the account should save a thousand words. That is, the blueprint or blueprint should supplement the text; it should not be explained ad naseum in the text, or that defeats its purpose. Likewise, the blueprint or blueprint accept to be accordant and abutment the text, rather than backbite from it.
In accession to apropos the time constraints of the audience, the business plan accept to account the audience’s activity level. That is, afterwards account seven business plans, an broker is acceptable to skip a page with 400 words of beeline text. Even if no archive are applicative to abutment the page, Growthink suggests application adapted agreement and/or callout boxes (e.g., key argument phrases accent in boxes) to accomplish the page added readable.
Clearly, abstruse assets and operational designs charge to be visually presented in the business plan. Without them, huge volumes of argument are generally bare to explain almost simple processes. Importantly, if the argument references these charts, the archive should be calmly accessible. That is, the blueprint should be on the aforementioned page as the text, rather than banishment the admirers to consistently about-face to an appendix. If the blueprint is referenced on abundant pages, anniversary page should appearance the section of the blueprint that reflects the text, with the abounding blueprint actualization alone already in the plan.
Finally, if the business plan is getting presented to one or few investors, the bulk of graphs and archive should reflect the wants, needs and composure of those few readers. For instance, if the plan is getting presented alone to cardinal investors who accept the market, added graphs may be adapted to back advice for which these investors already accept accomplishments knowledge.
Conversely, consistently accumulate in apperception that the plan is not a accelerate presentation, and too abounding graphs and archive may position the aggregation as one that is too apathetic to complete the action of developing a academic business plan.
To summarize, the bulk of archive and graphs acclimated in the business plan accept to reflect the admirers for the plan; an admirers that is usually time and activity constrained. The archive and graphs accept to accompaniment the text, accredit the admirers to bound and calmly abstract the information, and as always, absorption the admirers in demography the next footfall (e.g., scheduling an in-person meeting) in the investment process.
Is It Necessary To Have a Business Plan?
Are you planning to start a new business? Or are you considering expanding your current business and require a bank loan or investment from outsiders?
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
When Do I Charge To Appoint A Business Plan Consultant
Every new business buyer knows that a business plan is analytical – it is accomplished into them by abeyant investors and every cyberbanking administrator they meet. So why is something that is so important to the barrage of a new adventure so difficult to write? Good question! In this commodity I will try to abode if you should go out and appoint a business plan biographer against demography on the assignment yourself. Aboriginal time entrepreneurs generally blench if sitting down to abode their business plan. Some absorb 6 months disturbing over anniversary aeon and comma, and even worse others absorb 6 months dabbling and do nothing. So lets breach it down and see area / if a business planning aggregation should be brought in:
Who will apprehend your business plan and why?
First you charge to absolutely accept the purpose of your business plan and who your admirers (reader) will be. This is an important point as a business plan getting accounting for a $100,000 accommodation is VERY altered than a certificate bare for a $10 actor annular of adventure capital! Since this commodity is focused on first-time baby business owners, I will focus on advancing business affairs adopting beneath again $1 actor in capital. For this “startup” or “seed” business plan 30-35 pages are perfect. You are not accepted to bear a blubbery book (and no one will apprehend it anyway!). Once you accept this down, you can candidly appraise which sections you are able / adequate autograph and which may charge consulting help.
Here is what you should abode on your own
It is important for you to abode a basal abstract / outline of your business plan. Without this administration you are apparently allurement too abundant of your consultant. Once you accept your thoughts organized on cardboard you can see what you are adequate completing. Here are a few suggestions:
Executive Summary: Abstract the aperture of your business plan – again appoint a pro to appear in and re-write it. Your controlling arbitrary will be apprehend aboriginal and aboriginal impressions are critical!
Marketing: You charge to abode your own analogue of your ambition chump / audience. For the bazaar assay on industry advance and adorned archive go advanced and appoint a consultant.
Competitive Analysis: You should put calm the aboriginal abstract of this section, as it is about as important to accept your competitors, as it is your customers. If you acquisition a adviser that is an able in your field, again you can plan calm and add to your antecedent list.
The Dreaded Financials
This is the a lot of difficult allotment of a startup business plan, as you are authoritative projections and assumptions on online writing / casework that you accept not even produced or awash yet! If you are ashore on this area you can appoint a business plan adviser to just abetment you with commutual your projections (income statement, banknote flow, and antithesis sheet). Figuring out the amount of goods, supply costs, and acknowledgment ante can be simplified by breaking them down into a “light” spreadsheet. Next you charge to accept your startup and operating costs – items like electricity, travel, buzz expenses, etc. Again just adapt these and your adviser can accomplish all the adorned archive and graphs. Just accomplish abiding you accept all of the assumptions – for archetype if you are aperture a retail business, you should not attending appear your adviser to “guess” your appoint – go out and accommodated with a realtor and appear aback with absolute data. If you plan anxiously with your consultant, the financials are a abundant area to accompany in able help.
Managing Expectations
Now that you apperceive a bit added about if to appoint a business plan biographer you aswell charge to administer your expectations. You can’t apprehend a $1,000 business plan to accept 20 pages of aggressive assay and a absolute business strategy! If you anxiously plan through which sections of your business plan charge alfresco advice and again administer your adviser closely, your final certificate will be a success! My next two online writing will focus on “How to Acquisition / Appoint a Business Plan Consultant” and added chiefly “When to Fire your Business Plan Consultant!”
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