Writing a business plan for your Small Business

By Satti Vijay Bharath Reddy

Business plan has following components:

 

Title page and contents
Business plan should have a cover of adequate size to hold your material. On the title page put the name of the business, the names of the principles who own it as well as business addresses, phone number, and e-mail address. If you have a professional logo you can use it for your title page. The business plan should be presented as a personal document by the principals themselves.

Executive summary
The first component of the business plan should describe the nature of the business through Executive summary or statement of the purpose, and the business description. It should include the following key elements

Business summary should be clear and crisp and should be able to present the reader to identify your capabilities and needs.

Business description
Business description usually begin with a short explanation of the industry. Do the necessary research so you can provide information on all the various markets with in the industry, including references to new products or developments that could benefit or hinder your business. When describing your business, highlight which section it falls into, and whether the business is new or established. Describe whether the business is sole proprietorship, C  or S corporation.

The Product or Service Description
Describe your product or service, make sure your reader has a clear idea of what you are talking about. Explain how people use your product or services and talk about what makes your product or service is different from others available in the market. Explain how your business will gain a competitive edge and explain how your business will be profitable.

The key is to grab your readers attention and hold it. If your business plan is long or poorly written, you stand to lose more than just your readers attention. You risk loosing the opportunity to grow your business.

Marketing strategies
Market strategies are the result of a thorough market analysis. After the companies market research and know who and what your prospects are, you can begin crafting strategies to establish and solidify your position in that market. A market analysis will also help you establish pricing, distribution, and promotional strategies that will allow your company to be successful.

Describe in short about following points.

 

Competitive analysis
The purpose of the competitive analysis is to determine the strengths and weakness of the competitors in the market. Describe the strategies that will provide you with a distinct advantage. Barriers that can be developed to prevent competition from entering your market.  The first step in a competitor analysis is to identify both direct and indirect competition for your business, both now and in the future. Once you have grouped your competitors, start analyzing their marketing strategies and identifying their areas by examining the strength’s and weakness. These strengths and weakness will give you insight into which market niches are worth your efforts.

Once you have established the key assets and skills necessary for your business and have defined your distinct competitive advantage, communicate this information in a strategic form that will attract market share as well as defend it. This section should give reader who your target market is, how exactly is you will stand apart from your competitors, and why you will be successful.

Development plans:
There are generally three areas you'll cover in the development plan section:

Each of these elements needs to be examined from the funding of the plan to the point where the business begins to experience a continuous income. Although these elements will differ in nature concerning their content, each will be based on structure and goals.

Operations and Management plans
The operation and management component of your plan is designed to describe how the business functions on a continuing basis. The operations plan highlights the logistics of the organization, such as the responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Organization structure and operating expenses: The organizational structure of the company is an essential element of the business plan because it provides a basis from which to project operating expenses. This projection is critical in formulating financial statements, which are heavily scrutinized by investors; therefore the organizational structure as described in your business plan has to be well defined.

Organizational structure can be divided into

 

Once you have described the organizational structure, next comes how you will handle the daily routine expenses to run the company. Expenses can be fixed that must be paid periodically, and variable expenses which are those that change according to the amount of business. In addition to your operation expenses, you will also need to draw up a capital equipment list to show how much money is needed to purchase equipment for operations.
 
Financial components
After defining the product, market and operation the next area is to turn your attention to are the 3 financial statements that form the back bone of your business plan.

Income statements.
Cashflow statement
And Balance sheet.

For detailed description of these 3 statements refer to my article at

http://www.cashflowcrunchers.com/articles/Bookkeeping_basics_Article-3.php

Business plans can be used to set goals, targets, responsibilities, deadlines, and guidelines for your business. A good business allows various departments to monitor their performance. Most business people say they don’t have time to do business plan, a good business plan will save time and stress later.

A good organized business plan will help in:

(c) Copyright 2007. All rights reserved.

S.V Bharath Reddy , is one of the founders of The Cashflow Crunchers, a web site for Investors and Smallbusiness to share investing tips and other information. For more articles, tips, and free online calculators, please visit http://www.cashflowcrunchers.com

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