Why do you need a business plan?
A business plan is a written guide for starting and running your business successfully. This is also what you will present to lenders and investors if you’re seeking funds. Many people may avoid developing a business plan because they don’t know where to begin or because they think the process is too time consuming.
Don’t worry, the SBDC is here to help you and all your small business endeavors. Here is a break down of a business plan into five simple parts. Let’s dive into each part and its components!
The Executive Summary of your Business Plan should sum up what you plan to do and how you plan to do it. Often, the executive summary is the only part of a business plan that a prospective investor or lender will read before deciding whether or not to continue reading the rest of your plan. So, be careful to avoid jargon or highly technical language. Your executive summary should be clear and concise, communicating your business idea and enthusiasm for your idea.
The business description serves as your introduction. In this section, provide an overview of your business, focusing on the “who, what, when, where, and why.” Some of these points should include: the name, location and type of business, products or services, a mission statement, and a description of your target market. The Mission Statement is a brief explanation of your business purpose or the reason it exists. We recommend keeping yours short and clear and easy to remember. A target market is the group consumers or organizations most likely to buy your products or services.
Operations & Production Plan
The operations plan is designed to describe just how the business functions on a day-to-day basis. This includes the descriptions of the products and/or services your business is producing, how you will keep track of and manage your inventory, where you will do business, the surrounding area of your business and why the location is effective, and business liability insurance.
Marketing Analysis & Plan
Your marketing plan describes both the wide scope of your business industry as well as decisions about specific marketing activities to reach your target market. Your goal in this section is to describe how you’ll attract and retain customers. You’ll also describe how a sale will actually happen. There’s no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs. This can include providing some background research about the industry for your business or product, your target market and market share.
The financial section of a business plan is one of the most important components of the plan. This section helps you learn how to manage your business successfully. If you are planning to start a business, it is critical to determine a budget for getting started. Every business is different – some may be able to get started on a smaller budget while others may require a large up-front investment. Regardless, all businesses, whether startup or growing, will be required to supply financial projections or what you expect your company to be able to do within the next three to five years. A three-year projection is required by most lenders. This research is beneficial because researched numbers help predict pitfalls as well as opportunities for growth!
If you are interested in learning more about developing a business plan visit our web site or watch our On-Demand Recording of, “From Idea to Action: Developing Your Business Plan,” Visit this link to register: https://pasbdc.ecenterdirect.com/events/30487