| The first type of business plan is one you plan on | | | | product can you afford to produce? How do you plan |
| showing to others. This might be so you can raise | | | | on keeping store shelves (or inventory) stocked? |
| venture capital funding or get a bank loan. The second | | | | Anything related to how and at what cost your |
| type of business plan is for yourself. It is in essence a | | | | product reaches customers belongs in the market plan, |
| document to keep you on track, something you can | | | | spelled out in as much detail as you can go into. This |
| refer to in the day-to-day chaos of your operations | | | | will firm up your vision in the minds of anyone reading it. |
| and use to determine whether you are on target. First, | | | | Financial Projections |
| let's explore the first type. | | | | The number one question on the mind of any business |
| If you are writing a business plan to obtain funding, you | | | | partner is "How much money is going to come out of |
| are essentially giving a stranger an overview of your | | | | this?" The financial projections are where you attempt |
| company. This person will want to evaluate your goals, | | | | to answer this question. What are your sales goals? |
| your personell, and your financial projections for the | | | | What kind of profit margin do you expect? When do |
| future. Therefore, these are the things you want to | | | | you predict the company will be profitable? Are there |
| address and give special attention to in your business | | | | significant debts that need to be taken and later repaid, |
| plan. At bare minimum, your business plan needs an | | | | such as for machinery or equipment? If so, you need |
| executive summary, a marketing plan, financial | | | | to factor such things into your projections. A person |
| projections, and a description of the personell involved. | | | | reading your financial projections will want to know |
| Let's learn a little more about each phase, as each one | | | | that you have taken everything into account and |
| is crucially important. | | | | produced some realistic expectations for the business. |
| Executive Summary | | | | Personell |
| The executive summary is what you might call "the | | | | Finally, those reading your business plan will want to |
| main point." It is the most important part of your | | | | know that you have competent, accomplished people |
| business plan. This is where you summarize the | | | | working with you. In the personell section, you want to |
| purpose of your company, how you will make money, | | | | list the names, achievements, and qualifications of |
| in essence, what you will be going into business to do. | | | | anyone who will be working with you. The idea is to |
| You want to touch upon the surface of all the other | | | | convince the VC or partner that the personell you |
| categories, but without going into super-specific detail. | | | | have chosen are suited for the tasks that lie ahead. |
| For example, rather than naming the stores you want | | | | This is especially important, given the modern trend of |
| to sell your product in or the names of specific | | | | venture capitalists appointing their own guys to |
| personell, you might say something like "We will utilize a | | | | companies they fund. |
| robust strategy of discount store selling made possible | | | | The other type of business plan is the one you write |
| by high-ranking personell in the retail field." A venture | | | | for yourself; for example, if you are bootstrapping with |
| capitalist or business partner should be able to read | | | | your own funds and growing the business organically, |
| your executive summary and come away with a | | | | by reinvesting profits. This type of business plan can |
| broad understanding of your goals. Of course, you'll | | | | be much more informal in nature, since you will be the |
| need to firm up specifics of how your business will be | | | | only one looking at it. However, you should still be |
| run in order to provide that understanding. Therefore, it | | | | thinking about the same questions. Too many business |
| would be best to hold off on writing the executive | | | | owners lose sight of why they are in business at all, |
| summary until after you are down with your marketing | | | | and try to be all things to all people. This does not |
| plan, financial projections, and personell descriptions. | | | | work, and a solid business plan is a great way to keep |
| Then you yourself will be intimately familiar with the | | | | yourself focused on what matters -- on what is |
| details and in a good position to sum it all up in your | | | | profitable. |
| executive summary. | | | | Therefore, no matter how you choose to structure |
| Marketing Plan | | | | your business plan, it should have the following: |
| Your marketing plan is basically how you intend to | | | | * Specific, numeric sales goals and time frames for |
| reach your customers. It is also where you define your | | | | achieving them. |
| ideal customer: say, 22-35 year old SUV driving males | | | | * A list of ways you intend on marketing your product |
| in the northeast with incomes of $80,000 per year or | | | | and the steps necessary to see it through |
| more. The person reading your marketing plan should | | | | * When you expect to be profitable and why |
| come away knowing where your product will be sold | | | | Forcing yourself to think these things through will be an |
| and how. Details are crucial here. Do you know buyers | | | | invaluable benefit as you build your company. They will |
| at Home Depot or Wal-Mart, if that's where you plan | | | | give you standards to judge yourself against daily, as |
| on selling? Will you be using Google AdWords or | | | | well as show you how to correct any mistakes you |
| affiliate deals, if you will be retailing online? How much | | | | are making. |