A Business Plan Can Be Your Guide to Growth · 2020-06-05 · A Business Plan Can Be Your Guide to...
Transcript of A Business Plan Can Be Your Guide to Growth · 2020-06-05 · A Business Plan Can Be Your Guide to...
Karp Financial StrategiesSTEPHEN KARP5310 NW 33rd AvenueSuite 206Fort Lauderdale, FL 33309(o) 954-633-2410 x176(c) 954-684-3284steve@karpfinancialstrategies.comkarpfinancialstrategies.com
A Business Plan Can Be YourGuide to Growth
Prepared for: Newsletters for Business OwnersJune 05, 2020
Whether you're a current business owner or abudding entrepreneur burning with the next greatidea, one of the most important steps you can take onyour road to success is creating a business plan.Why? A well-thought-out and well-written businessplan captures your vision, illustrates it for others(including potential lenders and investors), andcreates the roadmap you and your management teamneed to guide you through the growth of yourbusiness. Consider the following points:
• If you're a current business owner, you probablyfeel like you're always working to close the next bigdeal, juggling financials, or responding to the latestcrisis. Remember, however, that it's important toperiodically climb out of the trees and take a good,hard look at the forest. A business plan can helpyou do just that: take stock of where you've beenand lay the groundwork for where you're headed.
• If you're a budding entrepreneur, a business plancan help you raise money. It will help prove topotential investors and lenders that your idea isworth funding.
• For both current and potential businessowners, the process of creating a business plancan prove beneficial by revealing potential risksand uncovering opportunities that may nototherwise be apparent.
A business plan should be comprehensive, yet asconcise as possible. Although there are no limits tothe length, a business plan should respect the time ofyour readers while providing the information theyneed to make important decisions. Before you beginwriting, consider contacting an attorney or businessconsultant with expertise in business plan writing.Following are some of the main components of abusiness plan.
Cover page and table of contentsThe cover page is simply a title page for yourbusiness plan document. It should include the nameof the company, address, phone number, owners'names, and contact information. It should also include
the date on which the document was finalized andpublished. The table of contents helps readersnavigate through the document and identifies pagenumbers for each of the sections.
Executive summaryThe executive summary is essentially your elevatorpitch — an abridged version of the business plan thatdescribes to readers why your business is worthy oftheir attention and possibly their money. It should beno longer than one page, but should contain allpertinent details. For this reason, it is often easier towrite this section last.
An executive summary should answer readers'primary questions — i.e., are you looking for funding, isthe document a strategic guidebook for management,or both? As you draft your executive summary, keepin mind that many readers will decide whether thesubsequent pages are worth reviewing based on thisimportant section.
Business descriptionThe business description is the first major section ofyour business plan and should provide more detailson the nature of your business. One paragraphshould outline the key elements of your business, andthen subsequent paragraphs might expand on each.These elements should include:
Product or service description
Describe in detail the product sold or serviceprovided. If you are producing a product, explain howthe product is manufactured. What materials areused? Who are your suppliers? What are the costs ofproduction? If you provide a service, describe what itis and why it is different. How will it be provided? Inthis section, you might also address potential pitfallsand how they will be addressed. For example, ifdemand for your product or service is higher thanexpected, how will you manage the volume?
Legal structure
Business entities come in a wide variety of legal
A business plan can helpraise money and rallyyour leadership teamaround commonobjectives.
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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020
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structures, ranging from sole proprietorships andpartnerships to corporations. Each has its own prosand cons. In this section of the business plan, you'llneed to describe the entity you selected and thereasons for your decision. Include supportingdocumentation (e.g., a partnership agreement).
Business and industry description
Who are your key advisors and managers, and howdoes their experience benefit your organization?Where are you located and why did you choose thislocation? You might also want to use this section todescribe the genesis of your business — i.e., how andwhy you decided to launch the venture. Providedetails on the industry you are in and why yourbusiness has a competitive edge. Include relevantdata and illustrations, if applicable. (For example, aretail establishment might include a map highlightingstrong pedestrian traffic patterns in the area.)
Market analysis and marketingstrategyPerhaps the most influential section of your businessplan, the market analysis and marketing strategysections are where you convince readers that yourbusiness will be successful.
The market analysis section should provide a specificand detailed analysis of your target market, includingwhat you have done to maximize your opportunitywithin it. Who are your current and potentialcustomers, and why? Summarize any marketresearch you have conducted to prove the viability ofyour business. How big is your potential market? Whoare the major competitors?
If your business plan is intended for potentialinvestors or lenders, this section will help convincethem that you truly understand your market and arean expert in your industry. If your plan is primarilydesigned to educate key employees, it will provide thebasic information they need to strategize and carryout your vision for growth.
Once you have conducted thorough market research,the next step is to brainstorm how you will marketyour product or service within your industry. Thismarketing strategy section of the business planshould provide details about how you will promoteyour products and services. How will you differentiateyourself from the competition within your targetmarket? What is your business's value proposition(i.e., the unique value your company offers the
marketplace), and how will you communicate it toyour stakeholders? Describe any marketing tactics,such as advertising and public relations, as well assales models and sales compensation structures.
While the market analysis and marketing strategysections may be the most time-consuming to puttogether, they will be well worth the effort. Conductingthorough market research can uncover previouslyunknown challenges and opportunities. Addressingthese findings with a creative strategy can give yourbusiness a competitive edge. It can also help yourbusiness's leadership team understand the reasonsfor certain strategic decisions you make that they maynot necessarily agree with.
FinancialsOf particular importance to potential investors andlenders, the financials portion of the business plan isdesigned to help your readers understand where youare now financially, and where you hope to be. If youare seeking money, this section should outline exactlyhow much you need and why. You should include allcurrent and projected (or "pro forma") financialstatements, including:
• Cash flow statement• Balance sheet• Income (or profit and loss) statement• Break-even analysis
This section will likely be scrutinized the most, so besure it is completed carefully. Some readers willrequire more information than others. What is mostimportant is that the information provided is accurateand well-supported with documentation. The mainpurpose of this section is to educate readers aboutthe use of resources--including any debt and equityfinancing you hope to get — proving to them that youand your leadership team can and will managemoney effectively.
Worth the effortMost business owners would much rather focus ontheir daily objectives and challenges than takevaluable time away from their business to write abusiness plan. But in the end, it will be worth theeffort. A business plan is not only important, but it canalso become a critical resource on your journeytoward success.
For more information, visit the Small BusinessAdministration, www.sba.gov.
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