With all of the information that has been gathered proceeding the inception of the business idea, a well-thought business plan can be created to guide a new business through its first year. Planning out the first year of the business is very important; a business will either make it or break it in its first year, this is not to say the business is making money, but it is generating interest, acclaim and increasing revenues. If a business is hemorrhaging money or remaining stagnant, it should be re-evaluated. With a business plan in place it will be easy to refer back to in the case of negative performance, or a good benchmark in the case of positive business performance. Working through the creation of a business plan uncovers many things and aggregates different ideas into one clear plan.
The following is a summary of what a business plan for the first year might look like;
- Title Page - this will have your business name, logo and contact information
- Table of Contents
1. Executive Summary
- A brief description of
your business, including industry sector, the market you will serve and your
competitive advantage
- The purpose of your
business plan, whether it’s to secure financing, attract an executive team or
to lay-out your long-term strategy
- description of your
product or service, its stage of development and its competitive advantages
- description of
critical factors that will make a difference to your success, as well as your
most vulnerable areas and how you plan to guard against them
- outline of the
legal structure of your company
- summary of your
management team’s experience and credentials
- list of potential
customers, and a description of your market potential
- description of your
financial forecasts and how they were determined
- Your financing
requirements (if any), and how and when the money will be paid
back
- If you have an
existing company, include a brief company history and the company’s
achievements
2. Business Profile
What is your legally registered
business name?
What is your trade name (if different
than above)?
What is the
contact information for your business (address, phone and fax numbers, email
address)?
Is this a new or existing business?
What date was your business
established?
What form of ownership does your
business have?
·
Sole proprietorship Date of trade name registration:
·
Partnership Date of registration:
·
Corporation Date of incorporation:
What products or services does your
business provide?
What industry sector do you operate in?
·
Retail
·
Manufacturing
·
Service
·
Franchise
·
Other
_______________________________________________
Your
business objectives-
What are the key objectives of your
business in the short term (first year)?
What are the key
objectives of your business in the long term (three to five years)?
Growth
expectations and strategy-
Where do you
expect your business to be at the end of this year, in three years and in five
years?
How will you achieve
this growth in the first year?
3. Ownership and Management
Ownership
Who
are the owners of your business, and what is each owner’s percentage share of
the company?
Management
and Advisors
What are the major
categories of business management in your company? (e.g., marketing, sales,
administration, etc.
Who
is on your company’s management team? In addition to a resume, include a short
biography of each member of your management team to the appendix, including
their management strengths, credentials and commitment level.
Who
is on your company’s board of directors or board of advisors? In addition to a
resume, include a short biography of each member of your board to the appendix,
including their credentials and commitment level
Professional
services
Will you engage
the services of an accountant, lawyer, banker or other consultants?
4. Business Environment Analysis
History
If your business
is already operating, summarize your business from the time it was started to
date, including work done to date and sales you have made.
Industry
overview - VERY IMPORTANT; I have noted industry and market analysis in previous posts, it is very important to consider a new business' place in the market and industry.
What is the total size of your industry? (e.g., potential
sales, number of
customers,
etc.)
Who are the major players in your
industry?
What are the critical success factors
for your industry?
What kind of long term outlook does
your industry have?
Are there seasonal factors that affect
the industry?
Are there economic
factors that affect the industry? (e.g., interest rates, taxes, consumer
spending, economic cycle, currency rates, etc.)
Are there government factors that affect the industry?
(e.g., regulatory, free
trade, etc.)
Are there social
factors that affect the industry? (e.g., current affairs, trends, fads, etc.)
Are there
technological factors that affect the industry? (e.g., changes that could
affect production or the nature of your product, etc.)
Are there
environmental factors that affect the industry? (e.g., pollution regulations,
recycling)
Industry
position
What are the strengths of your product
or service?
What are the weaknesses of your product
or service?
Why is your product or
service unique?
How will you
protect what makes your product or service unique? (e.g., patent, trademark,
copyright, etc.)
What are the barriers to entry in your
industry? (e.g., technology, investment, patents or trademarks) In other words,
how easy is it for your competitors to duplicate your unique product or
service?
Answering these questions thoroughly will likely help to make the best decision for entering a marketplace, or to develop a new niche or help to fill an under-served industry or geographic area. These factors have a strong force on your business, how you react to them is part of your marketing plan.
5. Marketing Plan - ALSO VERY IMPORTANT; along with the business environment analysis, marketing considerations are also very important. These two aspects of the business plan help to complete a Porter's Five Forces analysis; many of the items you may include in the Five Forces model will be found here.
Target
market
Who buys your products or services?
What is the size of your target market
in dollar terms?
What is your share of this market?
What is the geographic area of your
target market?
What is your competitors’ share of the market?
How do you segment
your customer base?
What are the key
trends or changes you anticipate within your target market for the short and
long terms?
Competitors
Who are your major competitors?
What are the strengths and weaknesses
of your competitors?
What type of
threat do your competitors pose to your business and its growth potential?
Competitive
advantages
Why would customers prefer your product
or service to that of your competitors?
What are the specific benefits of your
products or services?
How will your products or services meet
the needs of your target market?
Do you have any trademarks, copyrights,
licenses or guarantees associated with
your products or
services?
Sales
and marketing planning
What market
research have you conducted? Attach detailed research to the appendix.
How will you attract customers?
How will you
advertise your products or services? (e.g. direct mail, online, radio,
newspaper, etc.)
How will you distribute your products
or services? (e.g. mail, wholesaler, retail,
online, etc.)
6 . Operations
Location
Where will your business operate?
How large is your office and/or
factory?
What are the terms of any lease(s)
related to your location?
Equipment
What are the terms
of any lease(s) related to equipment you require in order to operate your
business?
Suppliers
Who are your major
suppliers? If possible, include letters of intent from suppliers in the
appendix.
How easily can you switch suppliers?
What payment terms
do you have with your suppliers? Include supporting documentation in the
appendix.
Do you have established Service Level
Agreements with your suppliers?
Cost Centres
What are your
overhead costs? Include supporting documentation in the appendix.
How are overhead costs allocated?
How much do your
products or services cost to provide? Include supporting documentation in the
appendix.
What are your inventory costing and
control methods? Include supporting
documentation in the
appendix.
Human
resources
How many full-time and part-time
employees do you have?
Add to appendix:
·
The number of
employees you will have in your first year, second year and third year
·
List titles and
salaries for those employees
Sales
Do you have established sales and sales
support processes?
Will you utilize a direct sales force,
inside sales etc.?
How will orders be processed? How will
invoices be processed?
Customer
Service
How will you handle customer
complaints? Do you have a customer service
telephone number for customers to
contact you?
