HomeBusiness InsightsThe Benefits of Business Planning: Part Two

The Benefits of Business Planning: Part Two

Creating a Business Plan

Creating a solid, credible business plan is easier when you have the right tools.  Many financial institutions now offer business planning software, complete with easy-to-use computer templates.  If you’d prefer to work offline, it may benefit you to have a look at a sample plan to see exactly what is required. 
Below are a few of the main topics you should consider when writing your company’s plan.  Although this list is by no means comprehensive, it will help you get started on covering the basics.    
Company Description

This includes the nature, purpose, and scope of your business, as well as any basic details about your company.  Be sure to address the following:
  • Company details.  This includes the legal name of your business, the product or service that your company sells, and where you sell. 
  • Structure of the business (incorporated company, sole proprietorship, etc.).
  • Nature of the industry (service, retail, manufacturing).
  • Major participants.  Include any clients, suppliers, and distributors that play a role in your business operations. 
  • Business background.  When did your company come into being? How has it progressed?
  • Your mission and keys to success.  What do you want to do?  How will you do it?
The Marketplace

It is essential that you begin to analyze how your business will meet your customers’ needs, particularly in light of what your competitors offer.  Look at:
  • Major demographic, economic, social, and cultural factors within the marketplace. 
  • Industry trends.  What is the state of the economy?  What are your customers’ buying patterns?
  • Your competitors.  Who are they? What are their strengths and weaknesses? Consider factors such as price, customer service, reputation, location, and the range of products/services offered by your competition.   
  • Your company’s competitive advantages.  This may include factors such as price, quality, and convenience.   
  • Target customers.  To whom are you going to sell your product or service? How do you know they are ready and willing to buy your product or service?

Customers are at the center of every sale.  How will you appeal to your target audience and turn each buyer into a repeat customer? Think about the following:
  • The types of customers (retail, homeowners, contractors) that make up your customer base.
  • Location.  Where do you sell your product or service?
  • The people involved in each sale
  • Your company’s customer service policy (pre-sale and post-sale).  What are your customer service values? How do you plan on seeing these through over the years?
  • Policies.  What are your policies regarding credit, guarantees, rain checks, and refunds?
  • Suppliers.  Who will provide your basic materials?
  • Pricing and distribution.  Will you purchase supplies in bulk quantities to save your end customer money?
  • Sales forecasting and targeting. 

How will you persuade your customers to buy your product or service? Be sure to consider:
  • Market needs, trends, and growth. 
  • Marketing strategies.  How will you advertise?  How will you utilize the Internet, public relations, and outside partnerships?
  • Pricing strategies.  How did you come up with the cost of goods and services? 
Business Operations

This section relates to your business’s day-to-day operations, including physical location, job responsibilities, and contingency plans.  Analyze the following:
  • Key employees.  What positions need to be filled to make the business fully functional?
  • Employee responsibility.  List each employee’s responsibilities and the qualifications needed to complete his/her job effectively. 
  • Company policies and procedures (hours of operation, number of employees, training, salaries, benefits). 
  • Business insurance/employee insurance. 

Budgeting is an integral aspect of the business plan that should not be underestimated.  It will enable you to control your finances, fund your operations, and manage your money more effectively.  A budget may include any of the components listed below:
  • Balance sheet – what your business owns versus what it owes (assets, liabilities, and equity).
  • Income statement – a summary of your company’s performance over a specific period of time (profits and losses). 
  • Cash flow projections – all of the cash you expect to come in and out of the business.   
Whether you own a mom and pop shop or a multinational company, business planning will go a long way.  Be sure to review your plan often in order to gauge your progress – your business will thank you.