If you have a great idea for a business, the best way to find out is to do the background research and write a business plan to see if the business idea is feasible. The small business plan presented here can get you started on creating and developing a blueprint to set up your new venture.
Small Business Plan
This part of the plan explains how the business works in a concise overview that captures investors’ attention and gives them an interest in learning more about it. This section of the small business plan includes details regarding the business’s history, vision and/or mission, objectives, and the ownership structure. It expands upon the products and services, including features and benefits, competitive advantages, and how and where the products will be produced. It essentially explains how you are going to make money.
The market positioning section of a small business plan includes an assessment of the competition and how the business will compete in its industry. The industry overviews demonstrate the potential of the business by discussing the size and growth of your industry, the key markets within the industry, how the customers will buy the products or services, and which markets will be targeted and how.
The operations plan section of the small business plan outlines the physical requirements of the company, such as an office, warehouse, or retail space, equipment, inventory and supply needs, labor, and others. For a one-person, home-based consulting business the operations plan is usually short and simple.
In the marketing plan chapter of the small business plan there is a description of how the company intends to entice customers to buy the product(s) or service(s), including advertising/promotion, pricing strategy, sales and distribution, and post-sales support.
Market segmentation is one of the steps that go into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mix. This section of the small business plan defines the company’s target market; its size, structure, growth prospects, trends, and potential. Providers of capital reading this part of the plan will make sure that the market is large enough to support your business now and in the future.
Here, there is a list of the different marketing channels the company will use to get the message to customers (business website, email, social media, newspapers), as well as sales promotions methods such as free samples, product demonstrations and other tactics. It also includes the marketing materials the company will use (business cards, flyers, brochures).
The financial projections are probably the most important chapter of the small business plan, especially if the company is looking for financing or wishes to attract external investors. The financial plan chapter demonstrates that the business will grow in a profitable way. It includes projected income statements, cash flow statements, and balance sheet. For a new business these are usually one to three year estimations.
This section of the small business plan will forecast the main sources of revenues and profits for the company and it also presents a list of the important financial assumptions the business is taking to arrive at such calculations. It will be important to consider forecasting revenues using both a conservative case and an aggressive scenario.
Here you will find a list of the major expenses including fixed costs such as rent, utility bills, communication costs, accounting/bookkeeping, legal/insurance/licensing fees, technology, advertising & marketing and salaries; as well as the variable costs, including cost of goods sold, materials and supplies, packaging, direct labor costs, customer service, direct sales, direct marketing among others, along with the strategies to keep these expenses in line to remain sustainable over time.