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The importance of your business
plan
Your business plan
-- and management's ability to communicate it -- gets management
and investors on the same page and ready for action.
The Plan is the
most important communication tool an entrepreneurial team has to
secure investment resources. It sets priorities and evaluates
resources such as management team, employees, vendors, client
markets and board members. This is critical in the rapidly
evolving environment of a start-up.
Perhaps even more
importantly, creating your business is a process that enables an
entrepreneur to evaluate the business opportunity, identify the
resources required for growth and lays out a "road map"
for implementation. The Business Plan integrates all the
functional elements -- marketing, sales, operations and finance
into a single cohesive communication.
Potential
investors will review your proposed plan with an eye to how
thorough your research is, how well you know your industry, how
realistic your projections are, and how capable your management
team is of leading your start-up enterprise. Supporting your
projections with facts lends credibility to your plan. Include
footnotes or appendices with sources for your information whenever
possible.
Although business
plans may vary depending on the type of business or industry, the
major sections of all business plans should include:
- An Executive Summary
- Description of the Company, (product or service)
- Market Analysis
- Market Opportunities (including methods of distribution and
operations)
- Key Personnel
- Financial Results, Projections & Analysis
- Appendices (as needed)
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An Outline for a
Business Plan
- Summary
-
Business
concept
Current situation
Key success factors
Financial situation/needs
- Vision
-
Vision
statement
Milestones
- Market
analysis
-
The
overall market
Changes in the market
Market segments
Target market and customers
Customer characteristics
Customer needs
Customer buying decisions
- Competitive
analysis
-
Industry
overview
Nature of competition
Changes in the industry
Primary competitors
Competitive products/services
Opportunities
Threats and risks
- Strategy
-
Key
competitive capabilities
Key competitive weaknesses
Strategy
Implementing strategy
- Products/services
-
Product/service
description
Positioning of products/services
Competitive evaluation of products/services
Future products/services
- Marketing
and sales
-
Marketing
strategy
Sales tactics
Advertising
Promotions/incentives
Publicity
Trade shows
- Operations
-
Key
personnel
Organizational structure
Human resources plan
Product/service delivery
Customer service/support
Facilities
- Creating
the financials of the business plan
-
Assumptions
and comments
Starting balance sheet
Profit-and-loss projection
Cash flow projection
Balance sheet projection
Ratios and analyses
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