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What is a Business Plan?

A business plan is a written description of the goals and objectives of the business and how they are going to be achieved. It includes the mission of the business along with the production, organising, marketing, and financing intentions:

Is it feasible to operate my own business?

Is my business idea feasible?

Why Develop a Business Plan?

A business plan is a very important tool if you are starting a new business or expanding an existing one.

The business plan communicates to others how successful you are going to be.
Lending institutions require them to support loan applications.
Experience shows that successful businesses have a plan; the majority that fail do not.
A good business plan is your road map to success!

Key Components of a Business Plan

The business plan covers six key areas:

The Industry, the Company, and the Products
Market Research and Analysis
Marketing Plan
Operating Plan
Management Team
Financial Plan

The Industry, the Company, and the Service

This section of the business plan describes the business venture in a detailed but concise manner. You must clearly describe:

The nature of the industry
The proposed business
The product the business plans to offer

The Industry

Present the current status and outlook for the industry in which the business will operate.

New products and developments
New markets and customers
General trends affecting the business
Identify sources of information used to describe trends

The Company

Write a detailed description of the proposed business venture, the products and services it will offer, and the principal customers.

Mission statement with goals and objectives
Ownership and legal form of the company
Reasons why the business will be successful

The Services

Describe in detail the products or services to be sold, as well as the application of the product or service.

Benefits to the customers/clients
Competitive advantages
Unique features
Current state of development

Market Research and Analysis

This section of the business plan presents enough facts obtained through market research and analysis to determine if the product or service has a substantial market in a growing industry despite a competitive market.

Customers/Clients

Market Size and Trends
Competition
Market Share and Sales

Types of Market Research

PRIMARY RESEARCH = DO IT YOURSELF:

Observation
Surveys
Interviews

SECONDARY RESEARCH = USE EXISTING DATA:

Public Library
College or Universities
Chamber of Commerce
Business Publications
Trade Shows
The Internet
Census Information
Sales Tax Data

Types of Market Analyses

The information obtained through primary and secondary research techniques can be analysed in a variety of ways.

Economic Trend Analysis
Political and Social Analysis
Customer Analysis
Market Potential Analysis
Competitive Analysis

Customers

Identify your target market and develop a customer profile.

Demographic profile
Lifestyle patterns
Expectations

Customer/ Client Profile

Age
Income
Education
Gender
Stage of business
Type of business
Size of business
Location
Behavior patterns
Customer expectations
Other ???

Who is your target audience?

How will you reach this audience?

Market Size and Trends

Describe the primary market for the product, both geographically and in terms of sales volume.

Describe seasonal fluctuations
Discuss potential for growth
Discuss factors affecting growth

Competition

List the strengths and weaknesses of competitive products and services and list the companies that supply them.

Identify and list current and future competitors
Assess the competition on the basis of price, quality, performance, service, etc.
Discuss advantages and disadvantages of competing products or services

Market Share and Sales

Summarise what it is about your product or service that will make it sell in the face of current and future competition.

Identify and list major customers and estimate potential sales
Estimate share of the market
Estimate sales in units and dollars for the next two to five years

Marketing Plan

This section of the business plan describes the company€™s marketing goals and objectives and how they will be achieved.

Overall Market Strategy
Pricing
Sales Tactics
Advertising and Promotion
Packaging
Marketing Plan Outline

Overall Market Strategy

Describe the general marketing philosophy and strategy of the company.

Derived from market research and analysis results
Include discussion of markets targeted for sales promotions
List short-term and long-term marketing objectives
Discuss specific marketing tactics

Pricing

The pricing strategy selected can mean the difference between success and failure.

Provide a detailed description of the pricing strategy for each product or service
Outline factors considered in developing pricing strategies
Discuss wholesale vs. retail pricing strategies
Discuss price levels, geographic terms, discount policies, etc.

Advertising and Promotion

Describe approaches the company will use to bring the product or service to the attention of the target market.

List advertising methods along with benefits and costs
Discuss promotional efforts and strategies
Publicity

Marketing Plan Outline

A marketing plan outline is a useful tool for pulling together information related to the marketing plan. The marketing plan outline should include information on the following:

Marketing situation
Marketing objectives
Marketing Strategies
Budget
Action plan
Evaluation