examples of a business plan

examples of a business plan

Developing an Effective Business Plan

1. Executive Summary

Step-by-step coverage walks readers through each phase of developing a plan, from the very beginning to the very end. A variety of fulfilling cases and sample plans, along with an emphasis on diagnosing business problems, ensure that readers can effectively apply what they learn to any business situation. When used in an entrepreneurship, small business management or strategic planning course, this book will provide students with a tangible tool for learning.

With a continued emphasis on real-world applicability, converting the plan from a development project to a completed plan and a business analysis at the end will be useful for students of small business and entrepreneurs all over the world.

Throughout this book, the reader will have the unique opportunity to look over the shoulder of the authors as they develop a business plan with a fictitious company. This plan will be used throughout the book to illustrate concepts and techniques of developing a plan and information for a company. This book is a great resource for people who need or want to develop a business plan for their own company.

2. Company Description

The company description is a brief document which contains a company’s history, goals, future goals, and the nature of the business. In a traditional enterprise, it may be the first section of a business plan taken from a business plan that helped to craft CASA’s annual report. This is a polished final draft. It should be written for an external audience but can also help a group of people collaborate. This document has enriched CASA’s self-understanding and is a first step in adapting to the demands of the ever-changing real estate industry in Central Arizona. This company started as ANS Construction in 1972 as a sole proprietorship owned by Anthony Schettino. It was formed into a corporation with several partners in 1980 and reverted back to a sole proprietorship in 1990. The company was incorporated in 1999 as ANS Construction Inc. with the intention of creating a business entity that could endure. We have seen how difficult it is to maintain a successful company in the real estate development and construction business. This is largely due to the fact that most companies are small and undercapitalized and have no clear business plan because they are driven by the contractor’s experience in his trade. These companies slash their prices to get jobs in down times and eventually end up out of business or holding their breath on every project. Current economic forces have made for an ever-increasing difficulty in dealing with local building officials and inspectors due to changes in municipal personnel as well as a proliferation of legislation covering occupational safety and health and the environment. ANS has seen its profitability dwindling in recent years with increased competition and an ever-expanding amount of time spent resolving problems related to construction defects. In December 2000, ANS took on a partner in order to restructure and clarify its mission, develop a viable long-range strategy, and attain a higher level of profitability. The partner brought in knowledge of a very profitable niche market: development of residential real estate in planned communities. This was the defining moment in ANS Construction’s evolution. A comprehensive business plan was created and the decision was made to reorganize the corporate identity into the DBA (doing business as) form known as a trade name. This marked the beginning of CASA De Las Montanas Phase 2.

3. Market Analysis

The purpose of the market analysis is to review current and potential profitability. A key element in the process is the identification of the target market. This could be the same as the current market but in many situations it’s different than the current market of sales. With the help of the identification of the target market, this will allow the company to focus its energy on an area which is both sufficient and feasible. Identifying the target market gives a sense of direction to the company on the promotional materials that it may use and what kind of advertising it will need to perform. Another element in the process is determining vertical and horizontal growth. This information can help identify the direction which the company wants to go. Step one in market analysis is positioning the company by reviewing its strategy and objectives. With this information it can help identify what type of strategy the company needs to implement and type of strategy that may or may not be successful in the particular market. Step two is determining the information needed about the environment. This is where an assessment of what information is available at the present time both in primary and secondary form is determined. This could be about general information of the environment such as technology or it could be about a specific topic such as what are people’s thoughts on a particular product. Step three is defining the information needed. With research at its peak, there is an abundance of information. So, with an idea of what needs to be done the company can narrow its focus and not be overwhelmed by the various types of data. Step four involves designing the research. This is where is the actual conduct of primary and secondary research is pinpointed and how the company will go about gathering the research. Step five is doing the research. This step is self-explanatory. Lastly, with all the research completed step six is implementing the information learned from the research in specific marketing strategies and advertisement.

Keep this section at the center of the business plan. A solid market analysis is the backbone of a good business plan. It will not only provide you and your team of strategists with a vital document, but will allow for a future of successful marketing and continued competitive strength. The market analysis is very important to all business divisions. This includes reviewing the company’s own history of marketing, customer information databases, the resources of the company’s sales force, and state of the art and information about the industry. With the use of technology which includes the World Wide Web, company Intranet, Extranet, and using various databases, this could provide to be very successful.

4. Marketing and Sales Strategy

4.3 Promotion This is the method in which the product is made known to the consumer. There are many different avenues for promotion including: print ads, television, radio, and the internet. The most important thing is to get your message through to your target market. Methods to measure the effectiveness of a promotion can be done through a pay per click campaign, or by assigning associates to track how they heard of the product. Often times the best strategy for a new product is to offer a sample test to give consumers a risk-free trial. This provides the opportunity to get the product through to the customer, and if the product is of high quality, it will create repeat sales.

4.2 Pricing For any product, price is a huge factor in the amount of sales that you make. Analysis should be done on what the best price for the product would be in order to maximize the return. If the price is too high, consumers will not buy enough; if it is too low, there may not be enough return to cover costs or make a profit. Often times a new company will elect to price their product lower for an introductory period and raise the price later on.

4.1 Positioning How do you want your company and product to be perceived by the consumer? Often times there is a disparity between how you see your product and how customers take it in. We want to make sure that the consumer is in tune with our vision of the product.

Marketing is the process of creating customers, and customers are the lifeblood of your business. In this section, the mechanics of how you will get through to your target market will be detailed. The following elements need to be considered:

5. Financial Projections

Financial projections are important because they enable the business to see its future in black and white. If the projections are positive, a company knows they must stick to their current strategy and look for incremental increases in resource efficiency. If the projections are negative, one is prompted to make a new plan, analyzing whether the incorrect variables were forecasted or if an unforeseen event has hindered the company. A company can also compare its ratios of revenue and expense throughout the years to pinpoint any industry or internal structural changes. Most importantly, financial projections serve as a test of the plan’s feasibility. If the plan cannot be translated into numbers, it is not a successful plan. Period.

Financial projections are a forecast of future revenues and expenses for a business, generally in the range of three to five years. Predicting the future is not an easy task, but there are multiple resources available to develop these projections. Published industry data helps in creating benchmarks for a similar company, using a key metric such as revenue per employee. A bottom-up approach utilizes data on spending and costs from a specific project or division to project what it will cost in the future. This is the most accurate method but is very time-consuming. Regrettably, many businesses use the top-down method which is just taking a percentage of increased revenue and applying it to certain expenses.

Having described the components of the business plan, the plan itself should tell a coherent story. This means that the plan should flow smoothly from one topic to the next. Once again, this is a direct result of making plans to satisfy the requirements of lenders or investors. Essentially, the plan should present a unified strategy to increase the value of the company. This can be done with a strategic game plan with a defined marketing segment or a procedural plan that details cost minimization with high productivity.