Creating a Sound Business Plan

People who have high levels of business success usually have several things in common. First, they have a passion for their work and a strong belief in its value. Second, they are well focused. Third, they have a natural aptitude for what they do, and they work hard to develop their talents. In short, they know what they’re doing, enjoy what they’re doing, and believe in what they’re doing.

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Factors for Business Success

The following factors contribute most to business success and should predominate your planning process:

• The Business Concept
• Understanding the Market
• Industry Health
• Capable Management
• Financial Control
• Consistent Business Focus
• Anticipating Change

As you refine your business concept, keep in mind that successful businesses incorporate at least one of these elements:

• Something New - This could be a new product, service, feature, or technology.
• Something Better - The "something better" element encompasses a better service, lower prices, greater reliability, or increased convenience.
• An Underserved or New Market - Most often this is an unaddressed niche market, an underserved location, or market for which there is a greater demand than competitors can currently satisfy.
• Increased Integration - This situation occurs when a single product is both manufactured and sold by the same company, or when a company offers more services or products in one location.

I. Executive Summary

II. Company Description

• Legal Name & Form of Business
• Company's Mission and Objectives
• Names of Top Management
• Location and Geographical Information
• Company's Stage of Development
• Company Products or Services
• Specialty Business Information

III. Industry Analysis

• Size and Growth Trends
• Maturity of Industry
• Vulnerability to Economic Factors
• Seasonal Factors
• Technological Factors
• Regulatory Issues
• Supply and Distribution
• Financial Considerations

IV. Target Market

• Demographics & Geographics
• Lifestyle and Psychographics
• Purchasing Patterns
• Buying Sensitivities
• Size and Trends of Market

V. Competition

• Competitive Position
• Market Share Distribution
• Barriers to Entry
• Future Competition

VI. Marketing & Sales Strategy

• Company's Message
• Marketing Vehicles
• Strategic Partnerships
• Other Marketing Tactics
• Sales Force and Structure
• Sales assumptions

VII. Operations

• Plant and Facilities
• Manufacturing/Production Plan
• Equipment and Technology
• Variable Labor Requirements
• Inventory Management
• Supply and Distribution
• Order Fulfillment and Customer Service
• Research and Development
• Capacity Utilization
• Quality Control
• Safety, Health, and Environmental Concerns
• Shrinkage
• Management Information Systems
• Other Operational Concerns

VIII. Management and Organization

• Principals/Key Employees
• Board of Directors
• Consultants/Specialists
• Management to Be Added
• Organizational Chart
• Management Style/Corporate Structure

IX. Development and Exit Plans

• Long-Term Company Goals
• Growth Strategy
• Milestones
• Risk Evaluation
• Exit Plan

X. The Financials

• Income Statement
• Cash Flow
• Balance Sheet
• Break-Even Analysis
• Plan Assumptions
• Use of Funds

XI. Appendix