that an investor will study, to determine whether they will want to become involved in the organization. It also is the most important section for the entrepreneur in terms of projecting the possible income that the business will be able to generate. At a minimum, it should include the following sub-sections:
a.Start-up Costs - What funds are required to begin the business before the first dollar of revenue is generated.
b.Sources and Uses of Funds Generated - This is a brief section that identifies the total financial needs and where the money will come from and then how it will be used to get the company launched
c.Financial Projections (pro forma P&L) - This is a document that will outline the first three-year projection of revenues and expenses for the business and indicate what the projected profit or loss will be during each of those years. This document is covered in detail elsewhere in the book.
d.Cash Flow Analysis - This is a report that will help to determine the cash needs of the business over the first year of operation. Unlike the pro forma P&L, this document deals with money collected rather than revenue projections utilized in the Pro Forma. This document is also covered in detail elsewhere in the book.
Medium or Large Company Business Plan - The following will provide a description of the various sections of a business plan for a medium or large company. 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 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 promotional 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 justifiably 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 greater detail in a later chapter of this book.
-Description of your target audience - This is a brief description of the market segment to which you will direct your marketing effort, and from which you anticipate your sales.
-Program(s) to generate awareness of your offering - If your target customers are not aware of the item you have available it cannot succeed. Therefore, you should identify what programs you will be implementing to create awareness of your offering. This would include a discussion of any of the following:
--Media advertising
--Social media
--Networking
--Speaking engagements
--E-mail blasts
--etc.
-Program(s) to generate trial and usage of your product or service - Once you have created some awareness of your offering, it is necessary to do something to motivate the target customer to become a buyer/customer/client. In some product categories, this consists of offering coupons or refund offers, in others it might be a free consultation and in a third it could be a storewide promotion offering a special event to draw in customers.
* Management and Organization
