Business Plan for "My Brilliant Idea".
Business Plan Structure-
Executive Summary:
-Identify the key points in each section of your proposal and include only those points in the summary.
-Emphasize the key points that you know are important to the reader. Highlight those points that you believe will fit with their priorities (e.g. profit and growth).
-Be consistent. Don't introduce new information at this point. Only use information that has already appeared in some part of your business plan.
-Use these questions to flesh out your summary:
- What is your identity and mission? Introduce your company.
- What is the business's purpose and target population? Describe the specific need that will be addressed and the objectives to be achieved.
- Why is your business different? Define your value proposition.
- What will the business accomplish over time? For instance, market penetration, sales volumes, financial growth and R.O.I.
- Why is your business especially suited to produce the anticipated results as opposed to any existing business?
- How much will the business start-up cost and what is the source of the funding?
-Make sure the summary is brief...approximately one half to one page is ideal.
Business Details:
-Begin with a short description of the industry.
-Discuss the present outlook as well as future possibilities.
Industry and Market Analysis:
-Provide information on all the relevant markets within the industry, including any new products or developments that will benefit or adversely affect your business.
-Base all of your observations on reliable data and footnote or reference all sources of information. This is important if you're seeking funding as the investor will want to know just how dependable your information is and will not risk money on assumptions or conjecture.
-Define the market in terms of size, structure, growth prospects, trends and sales potential.
-Describe the target market, narrowing down the total market by segmentation factors that may be geographic, customer attributes or product-oriented.
-Focus on product segmentation factors that may produce gaps within the market.
-Determine the total feasible market. It should be appreciated that the total feasible market is the portion of the market that can be captured provided every condition within the environment is perfect and there is very little competition.
-Calculate the conversion of users from the total feasible market. This is based on a sales cycle similar to a product life cycle where you have five distinct stages:
- early pioneer users
- early users
- early majority users
- late majority users
- late users
-Illustrate growth potential utilising indicators such as industry sales, industry segment sales, demographic data and historical precedence.
Customers and Value Proposition:
-Be specific in describing how you will give your business a competitive advantage.
- What solution are you offering?
- What is your target customer's biggest concern or problem?
- What solutions do you offer?
- What is your competitor's value proposition?
- How do you differ from your competitors?
- How is your product or service different from your competitors?
Marketing Strategy:
The 4 P's by McCarty EJ (1960) but see also the Extended 7 P's by Booms BH & Bitner MJ (1981)
-Product
- Products are the goods and services that your business provides for sale to your target market.
- They should be perceived as offering value to the customer.
- Considers quality, design, features, packaging, customer service and after-sales service.
-Place
- Products should be available in the right place at the right time in the right quantity.
- Important considerations are distribution, location and appropriate methods of getting the product to the customer.
- Includes business location, shop front, distributors, logistics, internet presence (direct sales to consumers) and the manner in which the product is displayed.
- Delivery performance may be an important criterion.
-Price
- The amount of money that customers must pay in order to purchase your products.
- Considerations include price setting, discounting, credit and cash purchases as well as credit collection.
- Price = Position in Marketplace
- Higher pricing increases customers' expectations of quality and durability.
- Price may need to be reflected in packaging and promotional materials.
- Existing customers may be less price sensitive than new ones.
-Promotion
- Communicating the benefits and value of your product to consumers.
- Involves persuading general consumers to become customers of your business using methods such as advertising, direct marketing, personal selling and sales promotion.
- Includes special offers, branding, PR corporate identity, exhibitions.
Operations Plan:
Production process - Detail the process involved in producing your products or services. This process will vary depending on your business. Cover any manufacturing processes, the people involved, any third parties involved, and details on how you will deliver the product/service to your customers.
Suppliers - List your main suppliers and detail what they supply to your business. Also explain how you will maintain a good relationship with them.
Plant & equipment - List your intended plant and equipment purchases. This can include vehicles, computer equipment, phones and fax machines. For each item include a description of the plant or equipment, purchase price, expected purchase date and running costs.
Inventory - List your intended inventory items. For each item include:
- a brief description of the inventory items
- unit price
- quantity you intend to hold in stock
- total cost or value of the inventory item (unit price multiplied by quantity).
If you have a substantial inventory, you may prefer to attach a full inventory list as an appendix to your business plan.
Technology (Software) - List the technology you require to run your business and the cost of obtaining it.
Trading hours - List your normal trading hours. Detail your expected peak trading times and which times you expect to be more profitable. Also include how this will change over different seasons and how your trading hours will accommodate these changes.
Communication channels - Explain how your customers can get in contact with you. These channels can include: telephone (landline/mobile), post box, shop-front, email, fax, internet blog or social media channel.
Management Team and Company Structure:
Resources - There are six broad types of resources:
- Financial: this includes money, shares and other assets
- Physical: refers to tangible property such as equipment and office space
- Human resources: includes the knowledge, training, experience, as well as the time of the business owner and employees
- Technological: are embodied in a process, system or physical transformation, eg. unique software products and tailored information system architecture
- Reputation: encompasses the perceptions that people in the business' environment have of the business
- Organisational: include the business' structure, routines and systems
Financing- Sources of financing:
- Refer to MKTM033 14-15 WK 10 Sources of Funding.
Financial Calculations and Projections
- Break even analysis
- Balance sheet
- Income and expences statement (worst, expected and best case scenarios)
- 3 years cash flow projections
Risk and Strategic Options
- SWOT analysis and review of options.
Key Milestones
- For instance, when you intend to launch follow-up products, reach your first million sales, pay back large financial loans, obtain a public listing, etc.
Reference List:
Appendices
- Financial information.
- Graphical and tabulated data.
- Broader explanations referred to in the body of the report.
- Survey questionnaires
- Observation sheets
- Interview transcripts
- Supplementary data which adds useful information or insight but is not essential to the understanding of the paper.
Word Count: 3,000.