should be taken in the process that will facilitate writing the plan.
Conduct your own research of the business category in which you will enter, with the objective of learning as much as possible about how the category operates, and importantly what it takes to be successful in the market. Before you write the plan you should be able to identify the 3-5 keys to success in the business you will be entering.
Seek secondary sources that can add to your knowledge of the categories. For example, some business libraries will have examples of business plans written by others that you could use as an example of how you plan to approach the venture. One library in New York City (Science and Industry Business Library -. SIBL) contains hundreds of business plans for different types of companies, and you might find one written about your type of business or something very close to it. Another excellent source for business plan examples is the website www.bplans.com. They also have hundreds of sample plans you can use to help you develop your document.
Identify a business plan format that appeals to you. There is no ‘ right’ business plan format. If you search Google for business plan formats you will get 20,800,000 results, none of which is the ideal, but most of which probably are adequate. In this chapter we will identify the sections of a business plan that we believe to be most important. You can decide if this is right for you, or you go to other sources for an approach that makes you feel more comfortable.
Determine your personal goals. Specifically, what are you trying to achieve with your venture. Are you seeking to develop a large business with many employees that will generate approximately $XXX in personal income? Or is your goal to just create a successful one-person venture that can give you $YYY income each year? Perhaps your goal is to be a high profile businessperson who is regularly quoted in the papers and online, and this is more important to you than the income you make from the business? Needless to say, there are infinite combinations of personal goals but it is essential that you carefully think through yours, as they will impact significantly on the type of business plan you develop.
Length of a Business Plan - One of the most common questions we get from clients is how long the plan should be. We have seen plans that are three pages and others that are eighty pages. Generally, the length of the plan depends on the use for which it is written, thus it is often necessary to have two plans. Specifically, an investor or lender of any type generally will not be favorable toward a plan that exceeds 10 pages, thus requiring you to summarize much of the important information. However, a plan written to help you assess and ultimately manage the business might be 20-40 pages. We always suggest writing the more thorough plan first, and then reducing it to the short version when the need arises relative to reaching outside investors or lenders.
The Sections of a Business Plan - The following will provide a description of the various sections of a business plan. Each of these is essential to the plan. Should you wish to add other sections that would be fine based on your own judgment.
Executive Summary - This is the first section of any business plan but the last one that should be written. The goal of this section is to provide a 1-2 page overview of the key information in your plan so a reader could quickly read the summary and get a general idea about the business category you will be entering, how you will approach the venture and what the anticipated financial results are that you are anticipating.
Market Overview - This section should consist of a very brief, but thorough overview of the business category in which you will be entering. Specifically, what are the key characteristics of the business in terms of operations, marketing, sales and distribution? What have been the growth patterns of the business in the past and what is the anticipation for the future? In the event you are creating a new category where there is no specific history, this section should provide information about other similar categories and what you have learned from their dynamics and growth patterns that will provide a sufficient background for your specific entry into the related business.
Competitive Environment - This is a very important section as it provides a detailed analysis of the various competitors in the market in terms of their overall business strategy, how they have performed, and what you believe to be the key reason for their success. For example, were they the first in the market, do they have the strongest brand name, the best distribution system, the largest advertising budget? Each of these is very important. Further this section should explore the key messages of the various brands that would give their customer a reason why to purchase them versus the other similar brands in the market.
Description of your Product or Service - This is a brief section that provides a detailed description of the product or service you will be marketing. The key to this section is to ensure that a person who knows nothing about your venture could read this section and have a complete understanding of what you are offering.
Overall Business Strategy - This is a one-paragraph statement of the goals of the business and the strategic approach to achieving this goal. The implementation of the plan would be a direct outgrowth of the strategies from this paragraph. The following would be an example of a business strategy for a new dry cleaning business:
The overall objective for the XYZ dry cleaning business is to be the leading supplier in ABC County in terms of both volume and profitability. To achieve this objective our strategic focus will be:
To provide a level of quality and professionalism that is unique to the industry
To be the premium price dry cleaner in the area, justifying the higher price by offering a much higher level of service than is currently offered
To generate customers by offering convenience via multiple drop-off outlets and free pick-up and delivery
To execute a marketing plan unique to the industry involving both awareness generating advertising and trial and repeat pro motional programs
Keys to Success - This is an essential section of the business plan as it identifies the key elements of your program that will lead to the success of your product or service. This section would consist of a description of the element(s) of the marketing program that will determine the success or failure of your program. It is based on an in-depth analysis of the market in which you determine that the real leverage in the category and reason you will succeed will depend on being able to deliver on the key(s) to success you have identified. Some examples of potential keys to success might be:
The ability to obtain in depth distribution in independent toy stores
The ability to generate substantial traffic to our web site
The capability to communicate that we offer a superior service, at a justifiability higher price
Our ability to deliver on the promise of providing 12 hour service for our equipment in the event of failure
Marketing Plan - The marketing plan is the tactical part of the business plan, and it identifies the programs you have developed that will make you successful in the marketplace. It consists of several sub sections as identified below:
Description of the USP for the product or service - This consists of a clear articulation of why your product or service is different (and hopefully more appealing) than the others in your category. Does it meet a need that others do not, or does it fulfill a wish that customers have but cannot get from the other items in the category.
Positioning of your product in the category - Positioning is essentially how you would like your target customers to view your product or service. It will be covered in great detail in a later chapter of this book.
