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 |
