business plan outline

business plan outline

Developing a Successful Business Plan

1. Executive Summary

The business plan is the foundation and is a necessary tool for creating a successful business. This document provides a systematic and standardized way of looking at your business idea, thoroughly considering whether it is viable and demonstrating to yourself and others that you have what it takes. Think of a business plan as a decision-making tool. It is a time and an analysis during which the manager may evaluate the whole business and determine the feasibility of an idea. The plan serves as a guideline for the owners/managers, a map to indicate where the business is headed and how it intends to get there. It is also a report that presents details in such a way that others can assess the potential for the business and make informed decisions.

Different things motivate and drive commerce, and many people are drawn to it for the opportunity of achieving financial success while doing the work that they love. As alluring as this is, the reality is that the chance of surviving the first five years in business are slim, and even fewer those that survive, manage to achieve the type of success that they’d hoped for. As realized as this may seem, defeat isn’t an absolute, and for those who are willing to seek some guidance and put some effort into planning, the direction of failure can be turned around.

2. Company Description

Demonstrate a good understanding of the industry your business falls into. A comprehensive understanding of the industry will aid you in developing a successful marketing strategy and business model. Therefore, we recommend you do a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). This should provide a detailed analysis of the industry your business falls into.

If your business is a partnership, describe what each partner will contribute and the division of any shares or salary. This should state the percentages of ownership and the responsibilities of each partner. With an executive summary, always provide an honest assessment of your business, its strengths, and what it can achieve, including your expectations. In this section, you should also include the legal structure of your business. For a small business, this may be solely owned, a partnership, or possibly a proprietary limited company (PT). Include details on the history of the business, including the date of formation, locations, and its progress through the years.

A company description provides an overview of key aspects of your business. Its purpose is to give the reader a good understanding of what your business is about, what the business is hoping to achieve, and how it will accomplish its goals. It serves as an introduction to the reader and is a good tool for use in obtaining funding or encouraging partners or key employees to join the business.

3. Market Analysis

An industry consists of all businesses that are involved in producing the same or similar products. An industry analysis is specific to the industry you will be operating in. It provides information about the market where you will be competing. This is done with a market industry report or other sources of market information. You should research the current state and future projections of your industry. Determine the size of your industry, sales, and establish a projected growth pattern. This will provide valuable information for the long run. Monitor any significant changes in the industry in order to adjust the plan and to best prepare the business for success.

An important component of your business plan will be your formal market analysis. This requires market research about your industry, target market, and competitive environment. The purpose of your market analysis is to fine-tune your target market and to better understand the competitive environment in which you will be operating. A key component to a business’s success is careful and accurate market analysis to best determine how successful your business can and will be.

4. Marketing and Sales Strategy

Chapter 4 Marketing and Sales Strategy describes the business marketing and sales strategies. Marketing is a process involving the interaction between a potential buyer and someone trying to persuade the buyer to make a purchase. The author advocates a combination of both direct and indirect sales promotion strategy in order to produce the desired stream of revenue from sales. A 20% annual growth in sales, as mentioned in the mission, is the desired result. In pursuit of this goal, the author suggests that it would be a good idea to hire a full-time sales consultant for the first year. A sales consultant will man a booth at a local market several times a year, initially. What better way to sell our regional gourmet foods? He will keep customer contact information from those visits and make good use of the phone and Internet for sales leads. Later, he will visit various restaurants and gourmet food shops for the purpose of building brand recognition and making our food products available to the local population. He will work at these locations in an attempt to secure a contract for a long-term business relationship that will have the food products featured as part of the establishment’s menu. This is considered an attempt to upsell as it would likely lead to more purchases in an effort to resell the food to the establishment’s clients. With an established base of local customers, the sales consultant will seek to target more of the state and develop a larger-scale mobile sales promotion with the goal of product exposure to dealers in the food industry. Sales to the consumer are a byproduct of sales to dealers that like to resell the product. This is the best time to do direct sales promotion. A college student will be hired to coordinate all the traveling for the appointed duration. An increase in sales to dealers will result in the eventual recruitment of another sales consultant and an increase in sales promotion scale to the regional and national level. An always important element of the sales strategy is feedback from customers and dealers. This is how the company will be able to continually assess the satisfaction of its customers. This information will be used to alter promotions and sales methods as necessary. Customer communication will be the primary method in the assessment of information.

5. Financial Projections

The financial projections section will outline your analysis of the future profitability of your business. If your business is new, this will be difficult to analyze but you can make educated guesses by studying the similar businesses, industry trends, and cost analysis. If you are already established, use historical data as your guide. The key to a successful business is to make sure you keep up to date with all of your costs and making sure you analyze your selling price to make sure you are making a decent profit. The last thing you want to do is sell a product at a loss because you did not account for hidden fees. Taxes can often make or break your business so it is recommended you seek advice from a qualified tax professional to make sure you account for tax rates and how they will affect your bottom line. Finally, you must analyze a break-even analysis which is the level of sales at which your company begins to generate a profit. The break-even point tells you how much product you must sell in order to cover your fixed costs. This is important information to know because it will help you set the sales targets for your staff and determine the feasibility of your business plan.