Back To Basics: Business Planning 101
The business plan tells the story of your business
, whether it is only a concept or already in operation. Like a good newspaper article, the business plan covers the who, what, where, when, how, and why of the business. Within these headings, there are a number of questions that are answered over the ten or so sections of a business plan.Who
Who are the founders of the company and why are they qualified to launch and run this business? Who are the customers the business will sell to and primary suppliers it must buy from, if any? Who are key partners who the business will work with? Who are the primary competitors that the company will most closely compete with for market share? The management team description covers the managers in-depth, while the customer analysis, marketing plan, and competitive analysis cover the customers, partners, and competitors.
What
What industry is the business in? What products or services will it provide? The industry analysis describes the industry and the company overview introduces the primary products and services.
Where
What locale will the business operate in? What are the geographic or other limits of its market? Where will it expand to in the future if possible? The company overview describes the current goals for location and the marketing and operations plans looks at future expansion.
When
When will the company launch, hire new employees, release new products or services, break even, and expand? The operations plan and hiring plan covers these milestones in the life of the company. The financial plan looks at financial milestones in the form of summaries and pro forma financial statements.
How
How will the company make customers aware of its existence, encourage them to consider its products or services, and close sales? How will these products or services be provided? How will the company be operated? The marketing and operations plans answer these questions by detailing the strategy and tactics of the company.
Why
Why is this business needed now? Why are the founders launching it? Why should investors or lenders put money into the company? The company overview looks at the history of the founders ambition. The why for funders is supported by the entirety of the plan, and most strongly by the financial plan which shows the financial returns funders can expect from their involvement.
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