Simple business plan definition
When describing your business, say which sector it falls into wholesale, retail, food service, manufacturing, hospitality and so onand whether the business is new or established. Business Plan Explanation Business plans are either internally or externally focused.
What is the purpose of a business plan
But while the an internal plan is short on polish and formality, a formal business plan document should be very well-presented, with more attention to detail in the language and format. Limitations on content and audience[ edit ] This section does not cite any sources. You don't have to spend a lot of money on a fancy binder or cover. What is the size of the market for this solution? The income statement is a simple and straightforward report on the business' cash-generating ability. As the business grows and evolves, so too should the business plan. Keeping the business idea on one page makes it easy to see the entire concept at a glance and quickly refine concepts as new ideas come up. Many potential investors will never make it beyond the executive summary, so it needs to be compelling and intriguing. For example, a web marketing firm has little use for the structure of an operations plan which is common to a manufacturing firm. What is the business model for the business how will it make money? Special Considerations Financial Projections A complete business plan must include a set of financial projections for the business. Summarize the problem you are solving for customers, your solution, the target market, the founding team, and financial forecast highlights. Your readers want a plan that looks professional, is easy to read and is well-put-together.
Then, if your plans change, you can easily remove a note, move it around or add new ones to better fit the direction in which your business is headed. What are the company's historical and projected financial statements?
If the business plan is for a new business, try to project what your assets and liabilities will be over the course of the business plan to determine what equity you may accumulate in the business. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result, which is either a profit or loss.
The business plan is typically web published and made available to all. Business plans should help identify not only strengths of a business, but areas that need improvement and gaps that need to be filled.
Business plans can vary greatly depending on creator, industry, operationsneeds, phase in the business cycleand more. Major achievements points out anything noteworthy, such as patents, prototypes, important contracts regarding product development, or results from test marketing that have been conducted.
They are also a way for companies to keep themselves on track going forward. Platform Planner Are you the visual type?
This includes costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business. Identifying gaps in the management team shows knowledge and foresight, not a lack of ability to build the business.
Importance of business plan
Where most templates assume all businesses are uniform, Copyblogger's model is designed to get to the heart of what entrepreneurs need to know to start a business: the ins and outs of the product or service, how customers will find the business and how the business will make money. These tend to be much longer and require a lot more work. You'll also discover areas with potential you may not have thought about before--and ways to profit from them. But a business plan is more than a pitch for financing; it's a guide to help you define and meet your business goals. Competition What other options do your customers have to address their needs, and what makes your solution better for them? These components include the review schedule, strategy summary, milestones, responsibilities, metrics numerical goals that can be tracked , and basic projections. Depending on the amount of funds being raised and the audience to whom the plan is presented, failure to do this may have severe legal consequences. In a similar fashion, a retail e-commerce store will even have a different business plan from a brick-and-mortar retail store. Company and management summary This section is an overview of who you are. If there are crucial elements of the business plan that take up a lot of space—such as applications for patents—they should be referenced in the main plan and included as appendices. These plans begin by following boilerplate sections and explanations. And LivePlan offers an excellent alternative with what it as of August calls the Pitch page , a standard summary. Current business position furnishes relevant information about the company, its legal form of operation, when it was founded, the principal owners and key personnel. According to the Small Business Administration , the traditional business plan is the most common.
based on 30 review