While business plans can take all types of forms, they all share the following elements. Make sure your plan passes the test and answers these important questions.–Tina Wells
What are your total and target markets? This is the first question you should always be able to answer. How big is the total market for your product or service, and what are your targets? For example, if you’re selling custom-made suits, how big (revenue wise) is the custom suit business? And what type of custom-suit customer are you targeting? Athletes? Businessmen?
Who’s your direct and indirect competition? Here’s a tip, you always have an indirect competitor; your customer can choose to simply not spend money. So there is always competition. It’s not impressive to investors to hear that you think you have no competition. We all have competition in business.
Have you done primary and secondary research? Resources like surveymonkey.com and polldaddy.com make it easy to conduct primary research. Get your friends to participate in surveys and ask them to get others involved as well. You need to do as much research as you can. Also look online for other research studies. Census Bureau data is available to anyone, and be sure to use it.
What’s your mission statement? This should be as simple as possible. Also, the shorter, the better. Everyone who works with you should understand what you’re trying to do and how you plan to do it.
What are the features and benefits of your product or service? You need to have them all in writing, and refer to them frequently. You should also use this information as you develop your sales and marketing materials.
What’s your value proposition? An easy way to figure this out is to start a sentence with “I promise…” What is it that you promise your customers? A great coffee experience at a decent price? Luxurious fashion? This is something you have to know.
What are your barriers to entry? It’s very impressive to potential investors if you’re aware of what might prohibit you from being successful. It’s important to identify these things, and to have a plan of action for dealing with these barriers.
What are your major business risks, and how do you mitigate them? This is bigger than planning for a rainy day. All business ventures involve risks, and you need to know what your risks will be and what you’re doing to do about those risks.
What are your marketing and sales plans? You should create plans based on the results of the primary and secondary research you gather. Also, be realistic about your sales goals. There’s nothing worse than overestimating your success.
What’s your staffing plan? Even if you’re a staff of one, you need to have a plan for what you’ll do if your business expands quickly. Make sure you account for every position you’ll have to fill. You don’t want to be caught off guard!
Do you have basic financial statements? You should prepare a five year pro-forma income statement at least. There are many online resources to help you in preparing this basic information. It’s important, so make sure you spend proper time preparing these statements.