Business Plans - What Do
They Include?
by: Kevin Erickson
Ok... so you've finally reached that stage in the development of your
home business to get started. You've done the research, you have a game
plan and you're ready to go except for one small detail... you need money.
Whether it comes from a loan or from investors it doesn't matter but you
need a good dose of seed money to put all your hard work and planning into
action. However, regardless of who hears your money pitch before they give
you a dime they will want see your business plan. Business Plan - What Is It? A good way to think of a business plan is that's it's a document that
provide answers to the type of questions anyone who may provide financing
would like to know about your home business. You will not get outside
funding without one, because the people giving you the funding will insist
on one because it helps them to know that you’ve thought through what
you’re proposing to do. A business plan says to them... "I’ve considered
this from every angle, and here’s what I’ve come up with". Business Plan - What Does It Include? What is your product or service? This is the first question every
business plan should answer. You must explain in the clear, concise
language what in the world you plan to produce or what service you plan to
provide. You will also want to include why you've chosen this particular
product or service. Who are Your Customers? After you've explained your product or service,
the next step is to identify who you plan to sell your product or service
too and why. The demographics (age, sex, language, country, state or city,
income, etc.) You need to clearly identify your customers in order to
properly target your advertising, packaging, pricing, et. What Makes You Different? You need to identify the "primary factors"
that will make your business different than other businesses you'll be
competing with. What niche are you filling that they are not or what do
you plan to do to fill a particular void in the market that you've
identified? What are Your Expenses? Your start-up expenses include any equipment
that you need before you can get up-and-running, while your day-to-day
expenses are staff costs and supplies. Following is a Simplified Example of Business Plan This a a simplified and shortened version of a business plan. In the
real world... each one of the following sections would be 1 - 2 pages in
length. That being said... in most instances it's better to be as brief as
possible. Only add information if your potential backers request it. It's
a bad idea to go into too much detail in your plan. You’re not trying to
explain everything down to the nth detail, just the basics of the business
and why they should give you the money you need to launch it. And always
focus on profit. Catering Plus Nature of Business: The business will be a home-based catering company,
producing luxury food for special occasions such as birthdays and
weddings. We will provide a comprehensive catering service, while
specializing in high end customized cakes, which have a higher profit
margin than other foods. Target Market: Our catering business will be aimed at middle-class
customers who desire a top-of-the-line catering but must operate on a
budget. Our initial market area will consist of Mytown and the affluent
area of Theretown. Key Factors: We will only use commerical grade ingredients purchased
from wholesalers and provide top quality design and service. This will
allow us to provide food that looks tastes great, while keeping costs as
low as possible. Expenses: Beause I will be using my kitchen and making the food myself,
there are only two real expenses: The purchase of an industrial grade
mixer and then the day-to-day cost of supplies. I've attached a suppliers’
letter listing prices. Our research has shown that this supplier offers
the best value for start-ups. To wrap it up, you should include a breakdown of both projected profit
and loss per month (in graph form)for the first year in business. Show
one-time and day-to-day expenses versus projected profit to indicate how
you will pay-off your loan. Your business plan should show you making
enough of a profit each month to live on – if it doesn’t, then it may be
considered unfeasible. Study a Few Real-World Business Plans The best way to get a real a feel for the dos and do nots of a business
plans is to find real-world plans that have already been approved and
study them. A good place to start is the internet. Once you’ve studied a
few, you will get a better feel for how much work will be involved in
putting your business plan together. Remember, until your business exists
for real, the business plan is the only tool you have to sell prospective
backers on how great your business is going to be |
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