simple business plan

simple business plan

Developing a Successful Business Plan

1. Executive Summary

– What are the future financing needs for your company and why? The total amount of capital we will need comes out to around $315,000 to start the business. $220,000 of this money is required for non-borrowed assets, which are shown in the Total Start-Up Expenses section on the attached paper. The additional $95,000 is to be used for an emergency fund in case of deferment in our start-up revenue and should remain a line of equity for the company to stay in place until it is needed and paid back at some undetermined time. There are a multitude of reasons we need this financing, including everything from buying the initial inventory needed to operate the restaurant to creating sales and advertising buzz. All of this is expanded upon in our Financial Plan section.

– What type of business are you opening and what is its concept? This business is a restaurant that will be opened in The Commons retail unit in Ithaca. The restaurant will take advantage of the void in the current market for moderately priced, high-quality Mexican food in the area and create a fun and inviting atmosphere for people to eat at.

The executive summary outlines the who, what, where, when, how, and why of the business. In other words, this section is a concise look at what the rest of the plan entails. Despite the fact that this is a summary, the reader will still need to know what they are looking at, and therefore all aspects of the plan must be covered in this summary, including the business and its idea, the financing needs, and the various financial markets that will be penetrated, the mission and vision of the company, and the implementation and management of the business plan.

2. Company Overview

Mission Statement What is the company’s purpose in existing? The mission can be used to counter changes in decision-making criteria. If an opportunity doesn’t further the mission, then the firm should not undertake the opportunity. The mission provides a framework for selection or elimination of current and future business. A mission should be enduring and identifies the unique purpose of the organization, distinguishing it from other similar businesses. Avoid using a goal as a mission. As an example, “to be the biggest retailer in the US” should not be a mission. This is something a firm strives to complete but does not describe purpose. This would serve as a goal while a mission would be something like “To provide a high-end department store shopping experience, offering the widest selection of products at the best price”.

Company History This is where you can describe the birth of the firm and how it evolved. Who had the idea of starting the business? What were the major developments along the way? Who has been involved and what have been their roles? What have been the major milestones? This section could be taken from your personal recollection or from information gathered from other employees.

3. Market Analysis

Another important way to understand the market is to look at the competition and determine your competitive edge. Your edge can be anything from the specific groups of customers you are targeting, to the high quality of your product, or a service offered that is currently not available in the market. Realizing your edge will help to define the factor that makes your company stand out when it comes time to promote your product to customers, as well as how to achieve your edge and allocate resources in the most efficient manner.

In this section, you want to exhibit that you have a comprehensive understanding of the present market in which your business sells products and services. Illustrate the function and size of the industry, the growth rate, and trends expected in the future. Define which ones are relevant to your company. With the knowledge of the market, you can illustrate to investors that your company is capable of capturing a share of the market, which can be viable above the point where your company expenses and profits intersect enabling you to achieve your defined business plan goals.

After defining your business and identifying your customers in the “product” and “customer” chapters, market analysis comes to the core of your business plan. The market analysis section can help you illustrate your knowledge of your industry and market and convince the investors so that you can accomplish your business plan goals.

4. Marketing and Sales Strategy

If marketing is done effectively, there will be a high volume of sales and customers. This, in turn, proves the feasibility of the sales strategy. Therefore, it is important to create an effective marketing strategy. Advertising and promoting the product and the company is essential to entry of the product into the business (into the market) and the growth of the company. This is achieved through a website and direct personal interaction with the customer. To promote the product and to form an impression on the customer, a demonstration of the product is essential. This can be a virtual demonstration on the website. Ads will be deals on the product to entice customers. Customer loyalty is desired, and when the marketing strategy has proved effective, the company will have a strong customer base. Once the product has been successfully promoted and is present in the market, the focus is now maximizing the sales volume. The sales strategy will involve personal sales and sales promotions. The ultimate goal is to form a relationship with the customer to make the evidence-based product a regular purchase. This will be done through follow-up of leads generated by marketing interaction and creating and maintaining a customer relationship by keeping in regular contact with, and providing a high level of service to the customer.

5. Financial Projections

Financial projections are a key element of the business plan. They enable you to set budgets and plan for future financing and are a way of gauging past performance. The accuracy of your financial projections rests on the assumptions you make. They reflect the most likely results you to get if the strategies and programs in your plan are implemented. You should have a best and worst case scenario, there is no point in having only the best case scenario as it is unlikely everything will go to plan. The forecast should include a profit and loss account, balance sheet, and cash flow statement. All of the different aspects of the business will have different strategies to produce, the forecasts should be detailed reflecting these methods. For example, the advertising strategy would reflect the advertising program it is related to and the number and type of salespeople is a reflection of the sales strategy. Produce monthly projections for the first year and then annually for the following years. It is better to have a sheet for all of the details and a summarized version, as in a plan you can include the detailed sheets and mention only the main points in the body. This way in presentation the understanding of how you came to say a certain figure is clear. Cash is king. It is probably the cash flow forecast that is most important to your business as it is what keeps your business afloat. The profit and loss account will no doubt look healthier than the cash flow forecast, and it is the fact that people generally misunderstand the difference between profit and cash that is the main reason for the failure of many businesses.