This is default featured slide 1 title
This is default featured slide 2 title
This is default featured slide 3 title
This is default featured slide 4 title
This is default featured slide 5 title
 

5 Business Plan to Start Your Business

1: Business/Executive Summary

The executive summary needs to succinctly answer a number of key questions for prospective stake-holders, including investors, employees, vendors and customers. Often, an entrepreneur must summarize his/her new venture in a 250- to 500-word written summary or a three- to five-minute verbal description, said Jon Burgstone, founding faculty chair and adjunct professor at the Center for Entrepreneurship & Technology at the University of California, Berkeley. He is also the co-author of “Breakthrough Entrepreneurship” (Farallon Publishing, March 2012).

“The executive summary should be able to describe how the business will solve a customer pain [problem] in one or two sentences,” he said.

The business summary should also provide information on the management team, including experience, industry credibility, history working together and commitment to the venture.

“Include a specific plan to fill any gaps in your management team,” Burgstone said.

It is also necessary to include the business’s immediate objectives and resources required—including necessary capital milestones expected to be reached, and other information needed to understand the business and technical risk of the venture.

2: General Company Description

Raj Tumber, SCORE business counselor in the area of public relations, said this portion of the business plan should tell the story of your business, how it came to be, where it is today and where do you see it heading.

The company description should cover how you plan to grow and succeed and give investors and other interested parties a sense of your vision, knowledge and experience. Company history, current business position, objectives and ownership should also be included, he said.

3: Products and Services

This section is designed to simply explain to the potential party of interest about your products and services, said SCORE’s Tumber.

“[This section] explain[s] where you will source your supplies and inventory, specifies product comparison with those that are out in the market and explains your research and development plans,” he said.

In the introduction portion of this section, outline the most exciting characteristic or benefit of your product line or service, he said. “How can it attract the target market? Summarize the value and offerings your product delivers,” he said.

Other important things to touch upon are features, benefits and pricing of your products or services. These are key areas where many entrepreneurs skimp on the details, but they are arguably among the most important element of the business plan.

“This is where you have to really spell out how you are going to make money,” said Mike Mirau, owner of a Growth Coach franchise in Dallas. The franchise provides business and sales coaching. “You need to establish your margins, how you will set your pricing and what you offer relative to the competition,” he said.

4: Marketing

A marketing section should be broken into internal and external communication, including a subsection that touches on traditional (print and TV ads) as well as new tactics (social media, blogging, photo and video sharing, etc.)

“A media relations section would delve further into positioning staff and company executives as experts in particular fields, pitching story opportunities, setting up interviews, product reviews, use of bloggers, etc.,” said Jeremiah P. Sullivan, co-owner /integrated communication specialist for Framework Media Strategies, a marketing and public relations firm.

Potential investors also want to hear about how you plan to use mobile marketing to get the word out about your business.

“The number of mobile devices connected to the Internet is very quickly going to exceed PCs,” said Simon Buckingham, CEO ofAppitalism. “Mobile devices carry a much more personal brand and attachment to a consumer than a PC.”

5: Financials

“When you get to the financial part of the business plan, that is what many people fear the most,” said Tim Perry, founder and chairman ofPalo Alto Software, a provider of small-business software.

Cash flow is the most important aspect to focus on, he said. “The balance sheet is the holy grail. Businesses run on cash. No business plan is complete without a cash flow plan.”

Aside from cash and income, there is the balance of assets, liabilities and capital.

The plan should also cover profit and loss, incorporating sales, cost of sales, operating expenses and profits. In most cases it should show sales, less cost of sales, as gross margin, and gross margin less operating expenses as profit before interest and taxes. Normally there is also a projection of interest, taxes, and net profits, he said.

There should be a monthly sales forecast for the first 12 months and annual sales projections for the first three years of operation.