How Should A Business Plan Be Formatted?

How should a business plan be formatted? The first section of your business plan is called the executive summary, which is just a summary of everything that's in the plan. The first section of your business...

The first section of your business plan is called the executive summary, which is just a summary of everything that's in the plan. I like to look at it almost like a trailer for a movie where you get the reader interested enough in the plan that they really want to go in to detail of what is in the rest of the plan. However, that's always the section that's written last, after you write the other sections, and then you go back and summarize it in the executive summary.

The next section would be a description of the business. Who owns it? Where is it located? What is the business selling? Is it a retail business that's going to sell to walk-in customers? Is it a dog walking business that I am going to run out of my home? This section is just a brief description of the business.

The next section would be the organizational plan. Once you have talked about what the business is and does, you need to talk about who is going to operate the business. Is it someone who knows how to do the actual business and who has done it before? If it's a lawn care business what experience do you have in doing a lawn care? If it's a restaurant business, does the owner have any experience? The second thing is that it takes a little expertise to manage a business. And that should be stated in the business plan - who is going to do all of the various management functions that need to be done in the business. You might have an outside accountant or use an outside payroll service to write the checks for the business. You need to make sure you have a full range of services available to do the business and manage the business. That's what goes into the organizational section plan.

The next section would be like a market analysis and promotional plan and that's where you talk about what the market is like. If you are planning a dog walking business or a pet sitting business, you want to know who your likely clients are. You want to identify them by age, by marital status, whether they have children or not, perhaps income level - whatever the characteristics are. I like to compare the marketing analysis to going fishing. The first thing you have to decide is what kind of fish you want to catch, then you want to think where you can find these fish. Do they live in the ocean, do they live in the lake, do they live in the river? So you are kind of narrowing down where to look for them. And then you have to think about how to catch the fish. Do I use a hook or do I use a net, do I use a hand grenade?

You are fishing for clients and so you want to know as much as you can about who the potential clients are who are going to buy your products or service and then you want to find out where are these people are. How do I find them, how do I get access to them, how do I tell them about my business and get them to come in to buy my product or service? Then you want to know who your competitors are. The thing a lot of people forget is that not all your competitors are people who are doing the exact same thing that you are doing. Competitors are people who do something which may be a substitute for what you do. For example, if you are going into a coffee shop business, other coffee shops are competitors of coffee shops, but also you see a lot of book stores that have coffee vending places in them, or fast food restaurants that sell coffee. So you have to think of where people can get a cup of coffee, because these are going to be your competitors and you want analyse what the strengths and weaknesses are of each of your competitors. Think of who they are, what they do well, what they don't do well.

What a business is trying to do is look for a niche, look for a thing that they can sell that is different, and that will differentiate them in the market so that customers will come to them for their products or service. So you would want to do a little analysis. You are going to find out the weaknesses and threats that your competitors might have so that you can take advantage of it. You are just planning. It's like planning for a war. You are planning to be out there in the market place and you want to know as much as you can about people who are going after the same customer pool that you are going after because you want to find the advantage so you can get those customers for your business.

Part of the plan is also a promotional plan. How you are going to promote your business, are you are going to use the internet, are you are going to advertise, are you are going to be in the Yellow Pages, or are you going to have flyers on the streets? Is it all going to be word of mouth, are you going to use specialized mailers? How are you going to let people know that your business is there and available and you want to do business with them? You also need a way to measure the effectiveness of any promotion you do so that you are not wasting your money. You have to think about the cost and the benefit of each of the various promotional plans, obviously there is a lot of detail that goes into that.

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