business plan examples

business plan examples

Business Plan Examples

1. Introduction

Impact tutoring is an example of a business that at the moment has nothing more than an idea. This is a proposed web-based business that would offer a platform for students to connect with experienced tutors in various subject areas on an on-demand “as needed” basis. These sessions would be virtual, and sessions would be logged with rate and comments. Parents would be billed for these services on a weekly basis according to session duration. Most likely, there would be an option for a free version of this product driven by trial advertising. This product, in essence, is a connector; it will establish a platform for students to find tutors and vice versa. This will provide students with resources that may make a substantial difference in their scholarly ventures, be it a struggling student who finally “gets it” with a certain subject or an above-average student looking to gain the edge in entering an advanced placement program. This idea has huge potential if done right, and it is certain that there is still a large target market for tutoring. This has a low-risk, high-reward factor but may require significant funding to meet key success on the first try.

An example of a business that needs a new product to revive a market is EC Software Consulting. EC Software Consulting is a part-time web-based business run by two consulting professionals who specialize in PeopleSoft Enterprise Financials consulting. The two owners have 18+ years of PeopleSoft experience and started their consulting careers over 20 years ago at the same company and have been friends ever since. In 2013/14, the market for PeopleSoft consulting drastically changed when Oracle made the strategic decision to end the PeopleSoft product line. This severely impacted the job market for consultants, and jobs became scarce. At present, there are many PeopleSoft consulting companies that have deviated to other technical areas due to lack of work and would revert back to PeopleSoft if the job market improved. If these owners can manufacture a product that will revitalize the PeopleSoft job market, perhaps migrating some of those companies back to PeopleSoft and opening up new job opportunities, they are confident that there would be ample opportunities to form a new consulting company with a unique product. The revolutionary product developed by EC Software Consulting would be this transitioning point from non-PeopleSoft jobs to PeopleSoft jobs. EC Software Consulting does not exist at the moment, but it is a vision that could come to fruition with the right job market. This business has a clear objective on what it wants to do and who it wants to impact and would certainly benefit from a little creative indulgence. A product like this can require significant amounts of capital, especially during the start-up phase due to R&D for the product, and venture capital funding would be a great source for this.

The introduction represents the framework from which the remainder of the document is guided. This is the first building block for the business plan. It will clarify the purpose of the business, who the primary and secondary target audience is, what the proposed product consists of, and what distinguishes the proposed business from competition. The introduction will also define why the entrepreneurs believe a business is needed and what problems the business will resolve. This should be a clear and concise 2-3 page summary whose aim is to capture the reader’s interest and have them continue with the business plan. This section provides an informal blueprint for the remainder of the business plan and should be constantly referred back to for guidance.

2. Executive Summary

A “Rule of Business Plan” by the United States Small Business Administration states, “This document is anything a potential investor may want to see, with the SBA the imaginative and prescient of an executive summary is vital to all involved.” As mentioned, investors and lending institutions need to be sold on the business. If the executive summary fails to capture their interest, they will not take the time to dig further into the plan. Either an investor will want to meet with the business owner for more information or they will want to see the complete business plan. This document’s existence can be the distinction between having a meeting to speak business or having a potential investor pass on the opportunity to take it any further. The executive summary is a business tool and should be dealt with as such.

The executive summary is generally considered by most seasoned business owners to be the most outstanding section of any business plan. This should be a succinct and powerful statement highlighting the purpose of the business, its goals, and it will focus on moving the business ahead. Essentially, it should be a call to action to make the reader want to learn more about the business or, in the case of investors, to want to invest. Due to the fact that the executive summary ends with the most critical and exciting aspect of the business, it stands alone as a selling tool. Many business owners rely on the executive summary as the sole content of the plan which they will use to pique a potential investor’s or financial institution’s interest to take a meeting regarding financing.

3. Business Description

We will target a specific and underserved market. With the rapid growth in the construction industry, many contractors will be in need of a replacement vehicle at one time or another. Come the end of their workday, many will wish there was a place they could stop by and check out prices on a new or additional work vehicle. An advantage for these customers is that they are people working with and depending on their vehicles to support themselves. For planning purposes, these often very busy people may like the option of scheduling an appointment for a specific time where they may get the undivided attention of a salesperson who can assist them in making what could be a large and important purchase for them. Schedule permitting, we might even be able to send a salesperson to show vehicles to the customer at their jobsite.

Our business will help fill a void in the market for an additional used truck dealership. With public and private transportation rapidly growing, there has been a great increase in the number of trucks on the road. As the tourism industry here in Hawaii grows, the number of trucks will also increase. Many of these people will prefer to buy new or used vehicles from dealerships, rather than import vehicles from the mainland, since it will typically be easier and more convenient to obtain a vehicle locally. This is a community with people of many different ethnic backgrounds. We hope to help serve those people as best we can. Our sales staff will be able to assist customers that can speak English, Tagalog, and Japanese. A further highlight of our plan is to begin to offer higher quality used vehicles, possibly including cars in addition to trucks.

In the market for used trucks, there are currently only a few companies offering a “one-stop” shopping center for used trucks. This would consist of a large showroom containing every type, make, and model of used truck the company has to offer. There might even be a “rainy day” or “bad weather” special to draw additional customers on those days.

4. Market Analysis

Market Overview In the market overview section, you are going to answer the questions: What is the size of the market? What are the trends? Who are the main players? At the early stage of a business plan, these may not be easy questions to answer. If you have identified the relevance of your product, the next step is to look at the broad market and then the niche segments. The broad market is the total market involved in the industry. For example, the broad market for DVD rentals is the rental of both DVD and VHS rentals. After identifying the broad market, niche segments within the market need to be identified. A market may have varied niche segments, so the objective is to identify those which are the closest match to the product/service you are offering. This also helps when choosing a targeted segment to focus on. Factors which can determine whether a niche segment is viable depend on the expected growth and potential long-run profitability. A niche segment with a constant demand has a more stable outlook than one which is expected to decline in the long run. The forecast method of market demand has a high degree of uncertainty and specificity depends on the stage of the business plan. For small businesses, it may be enough to look at the total sales of a leading competitor and gain an estimate on the product price. For larger businesses, a more detailed quantitative approach may be necessary. A thorough understanding of industry trends is important for the forecast. If the product satisfies a trend, then the expectation of higher sales is reasonable. If the market is a declining one, then the feasibility of the product must be reconsidered. Alternatively, if the goal is to increase market share for an existing product, then the forecast is identified by the planned sales volume increase. The sales of a product in a set period can be expressed by the volume sold in (number of units) and the value sold by (£ or $). The volume of sales multiplied by the price equals the total sales value, so the increase in sales can be isolated on volume. Matching the total sales volume against market volume can show whether the increased volume is a realistic measure or if it’s an overambitious measure to gain a percentage increase in market share.

5. Financial Projections

Expected Sales Volume must be split into different products and/or product lines. If you have limited knowledge of the market and its trends, a useful method is to make optimistic, pessimistic, and most likely sales estimates. A contingency plan can then be made based on the changes in the expected sales volume.

A sales forecast is an estimation of sales level over a defined period. This is important for planning stock levels, future investment, and assessing the likelihood of reaching the financial targets you have set. The accuracy of your sales forecast is crucial for the precision of subsequent financial projections. Any changes in sales levels will evidently affect costs and income.

5.3 Sales Forecasting

To calculate the expected profit over a defined period, use the formula Total Profit = (Expected Sales Volume x (Selling Price Per Unit – Variable Cost Per Unit)) – Fixed Costs. From this calculation you can assess the likelihood of reaching your expected profit, given the cost and sales estimates you have made.

Profit

Knowing how many units you need to sell to break-even, you can now form an estimate of expected sales in a defined period. Expected Sales Revenue = Predicted Sales Volume x Selling Price Per Unit. By using the break-even calculation and the thus attained expected sales revenue, you now have a definite financial target to aim for. This is important for assessment of business performance in the future.

Expected Sales

To calculate the break-even point, it is crucial that you have as accurate an estimate as possible of your fixed costs. These are costs that must be paid regardless of the amount of sales including the cost of premises and equipment; administration and selling costs; and interest on loans. It is important to be sure you can cover these costs with your expected sales. Failure to do so may mean a need for further investment, or a re-evaluation of goals. Step one in calculating a break-even point is to add estimated fixed costs to variable costs. Step two is to assess average price per unit, and average variable cost per unit. Step three is to use the formula Break Even Point in Units = Fixed Costs / (Selling Price Per Unit – Variable Cost Per Unit). This will give you an estimation of how many units you must sell to break-even.

Fixed Costs

First, the break-even point indicates when an investment will generate a profit. This is important because a business cannot survive if it cannot reach a break-even point. The break-even point is when fixed costs are covered by profit. Anything earned past this point is profit.

The 5.2 Break-Even Analysis