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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