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Business Plan Examples

Articles for "Business Plan Tips"

Create a Compelling Operations Section for Your Business Plan

The operations section of your business plan needs careful thought and analysis. Break it up into paragraphs with subheadings to make it easier for your potential investors to read and understand. Explain how your company delivers its services or produces the goods you sell.

Premises
Provide information on the premises your business occupies, and where you manufacture your products. Describe the physical layout and include the size of the property, the facilities and information about whether you own or rent the building. Investors will need to know what the long-term viability of the business is, and whether you have enough space to expand operations if necessary. Include details of onsite storage facilities for raw materials or finished goods, and information about bylaws that affect your business operations.

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Hours of Operation
This might seem like a no brainer, but it’s very relevant to potential shareholders to understand whether you currently operate a single manufacturing shift or more. In addition, in the age of global business relationships it’s important to explain whether your services are available 24/7 to accommodate different time zones, if this applies. If you only operate during business hours, do you have backup and support teams available after hours, and is there the opportunity to increase production if demand requires it?

Equipment
Manufacturing productivity depends to a large extent on the lifespan and condition of equipment and machinery. Give details of the equipment you have with which to make your products, and include information on the age and state of repair of each major item as well as whether the machines are owned or leased. Savvy investors will want to know this to gauge the value of the company and the production capability.

Quality Controls
Quality can make or break a business. It’s no good being the only producer of widgets in the marketplace if your widgets are poor quality and customers refuse to buy them, or if you have so many returns that you lose money. Investors will need detailed information about your quality control processes, the levels of manufacturing rejects you typically experience, and what the losses are as a result.

Purchasing and Procurement
Purchasing of raw materials and other items is one of the biggest risk factors in any business. Unless buying is managed strictly it can result in huge losses for the owners and investors, so potential shareholders are likely to want details of your procurement policies. List your major suppliers and describe the criteria and processes you use to buy from them, such as requesting tenders or bids, conditions of your agreements and the methods you use to select suppliers.

Inventory Control
Stockholding can tie up more than half of a company’s assets and be a very expensive activity, particularly if it is not well-managed. Potential shareholders will want to know where you keep your surplus stocks, what the typical shelf-life is, and how you manage obsolescence. Give details of how you manage the risk of loss relating to fire, theft and natural disasters, and what the value is of your average inventory at any given time.

This should provide the educated investor with enough information to form a comprehensive picture of your operation in his or her mind.

Marketing Research and Strategy
As every business person knows, without market research you have no well-defined target market. The market research section of your business plan needs to clearly set out details of who your audience is, the industry in which you operate, your competitors, a thorough analysis of your risk and a projection of the market share you are aiming for.

Target Market
Begin by describing what your ideal customer looks like. Include his or her demographic profile, details of the geographical location, annual income, likes and dislikes. Identify the typical size of the customer’s family, the ages of the children, and the wants and needs of the family members. For example, if your product is baby clothes, you aren’t likely to be targeting baby boomers. Although many baby boomers are now grandparents and may well buy clothing for their grandchildren, they may be your secondary target market, but not the primary market.

Market Segment
Once you have explained who your target market is, identify the market segment that you believe is the best customer for your product. If your baby clothes are mainly warm designer outerwear, while your primary target market is young parents with babies, the market segment may be those young parents with babies who live in cold regions and earn more than $100,000 a year. Include statistics showing the size of your market segment in numbers or the annual spending of the segment in dollars. Your potential investors will need to know that you have done your homework regarding the target market segment.

Industry Overview
Explain the current state of the industry in which you operate, how many players there are in your targeted area, and what percentage of the market each company enjoys. Provide details of how you plan to get established in the market and what your market penetration strategy is. How do you expect to make your mark against the existing companies? Include a SWOT analysis in which you show your company’s strengths and weaknesses, and the opportunities and threats to your company in the industry.

Competitor Analysis
List the companies that you will be competing against, whether directly or indirectly. This could include other suppliers of designer baby clothing (direct) or it could include a popular local seamstress who makes similar items to order (indirect). Identify what differentiates your product from the others, and how you measure up to them in terms of quality, pricing, distribution and service.

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At the end of this section, readers of your business plan should understand where your product is in relation to your competition, and whether your company has a chance of gaining a share of the market or opening a new market for the product.

Peter

Top 4 Business Plan Tips for Beginners

If you are just starting out as an independent business owner, writing a business plan and presenting it to investors can be incredibly intimidating. In fact, fear of failure and rejection is one of the main reasons why new entrepreneurs tend to put off writing a business plan for months, and sometimes years. There are no rewards without risks, and that’s something every entrepreneur needs to keep in mind. Writing a business plan is one of the key elements of creating a well-funded business model that has great potential for growth and success. While it’s certainly challenging and a little stressful at times, there are a few things you can do to get motivated and write a business plan that will impress investors enough to join your team.

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1. Think of a business plan as a collection of smaller plans rather than one large document.
Looking at a business plan as a whole can make you feel stressed out and overwhelmed. Breaking it up into smaller parts that you can work on over time is more manageable. If you have a busy schedule, you can easily write a great business plan by committing to finishing one section each week. You can have a complete document in just a few weeks’ time.

2. Use a business template as a starting point.
When you are a complete beginner, writing a business plan from scratch can be extremely challenging. Fortunately, you can find a variety of high-quality business plan templates online to make the process smoother and less time-consuming. Business plan templates provide a framework for creating a professional-looking plan that investors expect to see from all serious entrepreneurs. You’ll have to edit the template based on your needs and objectives, but it’s a useful guide for getting the first draft of your business plan done quickly and efficiently.

3. Don’t underestimate the power of accurate market research and numbers.
While your business plan is technically a prototype document that will need revisions before it’s put into practice, it should be as realistic as possible. Write it as if you were opening your business tomorrow and not in the far off future. It’s very important to present a realistic plan that is representative of the current market and projected economic conditions because investors need to know that you understand how the market works.

4. Know how your business will be operated before you finish your business plan.
Some entrepreneurs know that they’ll need to split up the responsibilities of running a business between a few different people, but they aren’t sure what role each team member will have down the road. The problem is that investors look for ready-to-go business plans that portray all aspects of running a business including day-to-day operations.

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Even if you don’t yet have a team together, you should know how your business will operate on a daily, weekly and monthly basis. Explain what role you will play in running it and how you plan to divide work among others in order to achieve maximum success every single day.

Peter

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