If you start your own business from home, or are a freelancer, it will help you to keep focused. Needless to say, the business plan must be short and to the point.
What should be included in such a business plan?
The executive summary describes in one page what your business is all about.
If you are looking for financing (bank loan, crowd sourcing, angel investor), this is section that convinces them. It proves that you start/have a viable business.
Content of this section can also be used for promotional materials (e.g., to describe your business on your website) and for the boilerplate in your press release.
Reason for starting/having your business
This section describes why you want to start/started your business. It explains the business/market need that you identified and why you have the resources, talent, and opportunity to meet this need. It outlines how you came up with the idea to start your own business.
This section also includes your short bio emphasizing your strengths and experience in your line of business/market segment. If you have co-owners, it’s best to create a separate section with all the bios.
In this section, your short- and long-term goals for your business are described.
- Which products/services you are going to provide to which customers group.
- How fast will your business grow?
- When are planning to reach your breakeven point/turn a profit?
- Do you plan to add products/services, approach additional customer groups, use new channels (e.g., online shop) in the future?
- Are you planning to form a partnership (e.g., join venture, revenue sharing) with other suppliers/providers?
- Are you planning to sell your business at a certain point in the future?
This section describes the products/services that you are providing. It also explains how your product/service differs from everything else’s in the market.
Your main differentiators not only show what makes your business unique, but also illustrate your business opportunities.
This section also explains the business potential of your product/service. If you are looking also looking for financing, it should include the following elements:
- Facts & figures of your market segment (e.g., number of suppliers, potential customers, shopping behavior).
- State if your business is online, brick-and-mortar, or a combination
- Clarify if your business is B2B or B2C
- Indicate the geographical area you are going to serve
- Explain which customer groups you are going to provide
List your delivery channels (e.g., email, postal service, delivery truck)
In this section, you explain how you are going to market and promote your business.
Some examples are:
- WOM (word-of-mouth) using social media such as Twitter and Facebook
- Advertising in printed media, on the web (e.g., Google AdWords), radio/TV
- Listings in directories, forums
- Press releases (using free or paid services)
- Using a PR professional
- Sponsoring, including donating at charity events
This section gives an overview of the financial forecasts. It should include a table of your expected costs and revenues per quarter or year. It is important to define your initial and ongoing investments (e.g., in keeping stock, premises) as well as the projected breakeven point/profits.
If you are looking for financing, it should detail how much money you’d like to borrow and on what it will be spent.
This section outlines when you would close down your business.
Benchmarks could include:
- Occurrence of certain market conditions (e.g., no need for the product/service anymore, losing market share to large competitors, change of regulations)
- Not reaching the financial targets (e.g., no breakeven point, only operating at a loss)
- Consumer behavior changed and there is no interest in your offering anymore (or it’s available for free)
- Your co-owners pull out
- Changes in technology make it impossible to provide/deliver your product/service
Do you want more information? Please feel free to contact me!
(Image courtesy of Ted Gogg at www.tedgoff.com)