Starting your own business begins with a very simple premises, write the vision. A business plan is your vision for a successful business. Whether your goal is to open a teen caf� that houses arcade games and allows for skateboards on sidewalks or a senior social center that teaches dance classes, everything hinges on your plan.
Before you begin drafting a plan, there are two huge steps to take. First, you must determine what you’re selling, and second, once you have chosen your product or service, research. Essentially, research requires you to know every aspect of your venture if possible.
Once these steps are taken, it is time to write the plan! Your business plan is the vision that details your business from its creation through its estimated progression. The plan covers the business concept, its expectations, inner workings, management structure, marketing tactics and reasons supporting its success.
According to The Small Business Start-Up Guide by Hal Root and Steve Koenig, business plans vary according to business. A business plan can be a couple of pages or an extensive portfolio. The key–no matter how long the plan–is establishing your business on paper.
A well written and well researched business plan should guide every decision for the foreseeable future. SeeThe Small Business Start-Up Guide at p. 17. Key components of a business plan, as outlined in Writing a Convincing Business Plan by Arthur R. DeThomas and Lin Grensing-Pophal, include a financial proposal, executive summary, business concept and mission statement, operating plan, marketing plan, financial plan, industry analysis, market analysis, and business description.
This resource covers each component in a separate chapter. The following summary of the components will give you an idea of the research necessary to write an effective plan and how your business plan ultimately aids in running a successful business.
An executive summary presents all the information in your business plan in an abbreviated and interesting manner to provide an overview for readers and to pique their interest in your venture. A financial proposal is a formal request for financial backing, and an excellent financial proposal evidences your financial savvy and exceptional managerial skills. See Writing a Convincing Business Plan at p. 17. The business description details the nature and purpose of the business. See id at 25.
An industry analysis identifies external factors like competitors and the economy and internal factors like production or cash-flow management that affect your commercial and financial success. Id at 45. Market analysis is a companion to industry analysis and focuses on the business’s target market and any competition the business faces. Id at 65. A marketing plan outlines how goods or services reach your target consumer and at what cost. See id at 97.
The operating plan describes the logistics of how your business makes or provides its product or service. Id at 127. An organization plan contains information concerning the legal form of the business, the design of your businesses internal structure, and the job descriptions for the people necessary to fill positions within the business structure. Id at 149. The financing plan estimates the finances needed to implement all the other components of the business plan. See id at 171.
Finally, a summary recapitulates the entire plan for the reader and wraps everything up with compelling remarks about the business. See The Small Business Start-Up Guide at p. 45. Generally, an effective business plan will also include appendices of charts, research data and other information that supports your plan. See id.
Tiffanie King, an African American entrepreneur, says the best advice she was given about her business was ‘not to be concerned with time.’ In writing an effective and thorough business plan, you may need numerous drafts and several days, months or years to write your vision. Just remember that all of the time invested in an effective business plan means less time for headaches and heartaches once your business is firmly established.In addition to The Small Business Start-Up Guide and Writing a Convincing Business Plan, you may find business plan resources online at the U.S. Small Business Administration website, which is an excellent resource for entrepreneurs. Examples of business plans can be found online at the additional resource links listed with this article.
