As we explained in our previous post, there are 2 types of business plans. Today we will explain the Condensed Business Plan and the elements you should include are listed below:
Summary: brief overview of your business plan (no more than one page). You should write it AFTER completing the 9 areas we will describe and completing the financial sections. it should highlight the key ideas in your plan and make sense to whomever is reading it.
1) Business Description:
This answers what your business IS and what your business DOES. Describe your business concisely and directly.
For example: enV by Vanessa Coppes is a provider of quality, handcrafted artisan jewelry, made from genuine gemstones and a diversity of metals imported from the designer’s homeland, the Dominican Republic. Based in Staten Island, NY these unique pieces of jewelry art sell at local boutiques, online and through direct contact with Vanessa Coppes. enV by Vanessa Coppes is seeking to broaden its exposure by strategic marketing and partnering with more national and international distributors.
2) Market Analysis:
Here you describe WHO your customers are or will be. Are they individuals or businesses? how many customers are out there? Is individuals, what are their characteristics: age, location or common traits. if businesses, how can they be identified: by industry, by size, etc.
If your product or service is already available from other sources, how big is the market. This means, how much is each potential customer already spending on this specific service or product? What are the past, present, and future trends in that market? Is the market segmented, meaning if it is a commodity, is unique. Other questions to answer are what is the demographic area of your market? What part of the market will you be selling to?
3) Product or Service Analysis:
Describe specifically WHAT your product or service is and WHY customers will purchase it. What are the features or benefits of your product or service that are better than the competition (better quality, faster, softer, one-of-a-kind, etc.)? What need does your product meet? how does it satisfy demand? Is the product protected by a patent or exclusive contract? What makes your product unique? Is it branded for a private label? What will your warranty policy be?
Identify the 3-4 top companies that provide the same or an alternative product or service. be sure not to overlook foreign competition. Briefly describe them in terms of size, location, target market, distribution or other characteristics. You may wish to this section as a chart. A good place to start this research is your local yellow page telephone directory and industries directory. Also, describe strengths and weaknesses, for example: competitor #1 has a large sales force, competitor #2 has no local distribution.
Your competitor can be a great teacher. What are they doing right? What are they doing wrong? What strategies are they using to market, for sales and operations? How can you emulate these?
5) Marketing Strategy:
This requires you to describe HOW you will reach your customers and your sales goals. Think specifically of WHY customers will buy from YOU and not the competition. Identify and describe how you will get sales, how you will reach specific markets, how you will price your product or service, how the product or service will be distributed. For example: Will you sell through retailers, direct mail, sales representatives, regional distributors, direct sales people, etc.? how will you promote the product or service-will you develop a brochure or data sheet, where and when will you advertise (determine cost)? Will you build a market niche? How will your service and other policies interact with marketing?
Describe HOW you will make or obtain your product or provide your service. Be specific in describing how much space, or special electrical service or plumbing may be needed for machinery, for storage, packaging, shipping and handling, what type of machinery is required, how much warehouse and office space you need, and if there are any zoning or regulatory concerns. How many people will you need and when will you need them? Are special skills required?
This section identifies WHO will be in your business. What experience are you bringing into the the business, how does your background relate to your business? Provide resumes or detailed descriptions of the people that will be working with you, their education and their experience. If there are several owners or partners, identify all of them. Identify support persons and services, such as accountants, attorneys, etc. You may want to include job descriptions that identify specific tasks and responsibilities.
this section describes HOW MUCH your proposal will cost. Describe the past, present, and future fiscal sides of your business. If your business is already operating, provide financial statements or tax returns for the last 3 years. How much business are you doing right now? Are you making a profit, if so, how much?
Estimate how much your proposition will cost and how much more will you sell or cost effectively produce your product or provide your service. identify the specific cost of your product or service. Can you charge enough to make a profit?
Estimate the operating costs you will incur by reviewing the following areas: rent, wages, benefits, insurance, advertising, printing, telephone, utilities, business travel, sales expenses, etc.
if you plan to borrow money or get short-term business loans, don’t forget to include the proceeds of the loan and repayment of principal and interest. As you work on the numbers, remember to write down the assumptions behind the numbers.
9) Supporting Information:
Provide copies of brochures, photos, news clippings or other relevant information that will help the reader to better understand your proposal.