How to Create a New Business Plan

June 5, 2014

How to Create a New Business Plan

If you need a new business plan it is important that you cover the following: The first part of your plan is the executive summary. This should be around one or two pages maximum. The next part is the company overview. You should include your mission statement and your vision. You should also include the products or services you will offer as well as the unique attributes your company has. The business environment covers an industry analysis, as well as your market, your customers, and your competition. After this you have the company description wherein you list your management, your operations, your distribution (if any), as well as financing and marketing. The company strategy follows which includes opportunities and threats as well as your marketing plan, and growth plans. Lastly you will need your financial review wherein you include your income statements, balance sheet, budget, cash flow statements, and profit projections. The last part is your action plan. You need to explain how your company will achieve its objectives and goals.

The first part of your business plan is the executive summary. The summary should be short and sweet. It should tell the reader everything that is contained in your business plan in a concise manner. It should descript the business, the product or service offered, and the market. It should also highlight the financial points of the business such as the profits, cash flows, and sales. It should list the capital required to start the company and to grow the company. It should also provide the current business position and any major achievements. This part should be no more than one page in length so it is important to use your words wisely.

Your business description should give the reader a description of your industry. You want to present the future outlook of the industry while also giving the reader information on the markets within your industry, any new products in the industry that may help or hurt your company, and any new developments that may help or hurt your company. If you plan on using your business plan to get funding, you will need to include footnotes for your sources; an investor will want to see how reliable your information actually is.

You should focus on the structure of your business. This means the type of operation you have, such as manufacturing or retail. Also include the legal structure (i.e. sole proprietorship, partnership, etc…) and who is involved in the company. It is important to list what your product or service is and what support system you have. The support system can be customer service, promotions, or advertising.

After this, you need to describe your target market and anything that makes your service or product unique within the market. Be very specific when describing your competitive edge.

You need to show how your company will expand and why it will be profitable. If you are using your business plan to get start up capital, you will need to show your potential lender how you will be successful. The business description does not have to be many pages, it can be just a few paragraphs or two pages depending on how complex your business and business plan are.
You have to define your market through a market analysis. You can use this analysis to establish your pricing as well as your distribution and the promotional strategies you intend to use. You can also use it as an indication of your growth within the industry which helps you to make estimates for the future of your business.

Your market analysis should start by defining your market based on its size, its structure, its sales potential, trends, or growth prospects. You can use the total aggregate sales of your competition to make an estimate of your total market potential. Then comes the target market. You should do this based on segmentation facts like customer attributes, income, or geography. If, for instance, you will offer your services in a confined area, you will want to include the number of users in your geographic segment. Your market strategy should focus on where your company is positioned with regards to competition. What needs of the customer does your product or service meet that other companies don’t? Why puts you ahead of your competition?