STEP 22 How to Create a great Business Plan for your New Business
Business plan is a description of how you are going to start your business, what type of resources are involved in it, how long will it take to do so, what kind of partners you will be seeking and where do you see your idea after few years. It is basically a plan which gives each and every detailed information relating to the business that you are just going to start. Business plans assist you in taking proper direction, practical vision, better financing and management of company. It serves as an initiative of business that you can take before seeking help from banks or other partners. The detailed discussion on starting a new business on our website including all the steps like, how to start a new business, how to develop website for your new business, how to perform SEO on your new business website, how to hire people right for the job, the documents required for starting a new business and some guidelines on how to multiply the revenue generation form the business, will surely help you to understand the business plan in depth and it will assist you in creating a complete and perfect business plan. The business plan is very crucial in defining your aim, where you want to see your business in coming days. Usually banks offer you to perform that tedious task for you but you must try to complete it according it the ideas which you had in mind while creating it. So its presence irrespective of the availability of financing partners is very important. The business plan does not always ends up giving you the similar results as you have thought in the beginning. A business has to go through a lot of crucial up and downs during its span of growth due to which it may change its shape but your business plan should be versatile in a sense that while allowing new business to compensate for new changes, it must keep the goal and aim of the plan solid. Also the more effort you will put into the business plan, the more detailed it will be. A thoroughly made business plan will save you from a lot of unseen troubles and difficulties in the future hence it is advisable to invest proper time in making a business plan. There are few additional resources that can help you in making business plans. Business Development Bank of Canada gives loans and helps regarding business plans to fresh entrepreneurs. LivePlan provides you with knowledge, experience and expertise which is required in setting up of small businesses. It also has good guide lines which help in making better business plans. Canada Business Network is a good guide line if you are planning on writing your own business plans. It gives you the ideas, basic templates and dos and don’ts of a successful business plan. A complete business plan is always an extra ordinary one so always try to make complete business plans and if not possible, there is no encumbrance in seeking advice from professionals.
Explain what a business plan is, the importance of a business plan regardless of whether or not you have started the business already or not. Explain that all the different topics discussed on our site come together to form the basis for a great business plan and that if the reader has already put all the effort into dealing with the various topics mentioned on this site, they are pretty much ready to write their business plan. Explain that regardless of whether or not the owner is looking for funding from banks or not, a business plan is critical to have.
Do you know what the grand picture should look like?
Explain that you should envision how the grand picture will look like one day. That way you can work towards it. It will inevitably take shape in a completely different way than you first thought but it is important to have the vision planned out from the beginning.
Do you know how you will get there?
Explain that you should also work out on paper how you intend to get to where you want to get to. This will include steps, the more the details the better.
Explain a few resource that one can seek additional help for writing a business such as:
BDC Business Plan Template Kit
Business Plan (LivePlan.com)
CanadaBusiness.ca (Writing your business plan)
Is your Business Plan complete?
Explain the importance of actually completing a business plan to the best of your abilities and if you are not sure about an aspect of it, having a mentor or a professional help with it.
Template – Business Plan
Type of Business:
Initial Estimate of Investment Required:
Refined Estimate of Investment Required:
Actual Investment Required:
How much do you like this idea:
Do you know how to do it:
How difficult is it to implement:
Is the business scalable:
Company Profile Summary
What is the key offering and who is the person(s) behind the business?
What will you sell?
Who is in your team?
Market Research Summary
What is a brief overview of the market?
Who are the key competitors? Who are you up against?
Who is target market? What customers will you go after?
How does the industry work?
How do existing companies reach customers
Who are the competitors?
Is the industry fragmented or are there only a few key players?
Is the sales cycle seasonal or cyclical?
How could past trends impact your predictions?
What does this mean for your business?
How could past trends impact your predictions?
What does this mean for your business?
If the following factors have an effect on your business, identify them and what effect they have:
Socio-cultural, Economic, Technological, Political/Regulatory, Environmental
How will you gain clients?
What specific strategies make sense?
What are the basic necessities you will need to get off the ground and how will you create a great customer experience?
How much money do you need to start?
Where will you get the money?
How much sales do you plan on generating in the first year and second year?
What will the expenses be?
What is the your company name?
What is the status of your company as of today?
I have an idea or concept
I want to start a business
I have opened a business
I want to expand my business
Briefly describe what your company is all about?
What is the key benefit to the customer?
Are you offering a product or service?
Briefly describe the products and services you are offering.
What have you done up until now on your business (idea)?
Who are the owners in the business and the people who will run the business day-to-day?
What location will you run your business from?
Home based business, store front, manufacturing, office building
What is the location address?
Why does this make sense?
What is your company structure?
Sole proprietorship, Partnership, Corporation
What did you pick this company structure?
Will you need to protect your intellectual property?
Patent, Trademarks, Copyright, Not at this time.
Industry Profile & Outlook
Describe the industry you are in.
Is the industry dominated by a few key players or many small shops?
How does the industry work?
How easy is it to start a business in the industry (ease of entry)?
What have the successful businesses done to stay in business?
What challenges does the industry have?
What has been the history of the industry in the past to where it is today?
What are the predictions for the future?
How will any of the following trends have an effect on your business: Socio-cultural, technology, political, geographical, demographic or economic trends.
What market will you serve? Describe the scope of the geographic area you will serve.
Key Competitors / SWOT Analysis
Who are your 4-5 closest competitors and what are their Strengths, Weaknesses, Opportunities and Threats?
Competitor #1 Name
Competitor #1 Strengths
Competitor #1 Weaknesses
Competitor #1 Opportunities
Competitor #1 Threats
Your Company Name
Your Company Strengths
Your Company Weaknesses
Your Company Opportunities
Your Company Threats
Who is your company focused on selling to?
Other Businesses (B2B)
Who is your best customer? This question only need to be answered by Business-to-Customer businesses
Create a target market profile for your business. *For business-to-business.
Keys to Success
What are the keys to success for your business in marketing?
What is the critical factor for your business to obtain customers?
What will be the key element that attracts customers to your business?
What are the keys to success for your business in the area of operations?
How will you fulfill your promise to your customers?
What is your value offering?
Sales & Marketing
What do your key competitors charge for the same or similar services/products?
Consider the prices of your competitor. What trends you see? Are there any standards across the industry?
List some of your prices in comparison to that of your competition.
What will you charge for for your products/services?
Why will you charge the prices you have outlined?
Now that you’ve listed what you are going to charge, you need to explain why.
What are the 3 most effective methods to reach your best customers (target market)?
List the marketing strategies you will employ and why.
Why have you chosen to locate where you have?
Opening a storefront or office space? Are you planning on leasing? What is the rationale?
What will your hours of operation be?
Virtual Location (For online businesses only)
Launch date of website?
Describe how you envision the website. What are the key features of the website?
Provide details about your website such as ease of navigation and design issues.
What will the look and feel be?
Who will design and develop the website?
How long will it take to have the website up and running?
Are you able to develop the website on your own or do you plan on hiring someone?
Consider which legal & regulatory items such as license and contracts need to be addressed.
Select any items from the list that will apply to your business:
Location & Zoning By-Laws
Intellectual Property (i.e. patents, trademarks, and copyright)
Operating Licenses (i.e. child care centres, gas stations, etc.)
Industry Specific Licenses (i.e. dentistry, alternative health care, etc.)
Import / Export
Contract Agreements (partnerships, independent contractors etc.)
Provide a brief explanation of how you will obtain these or any barriers you foresee.
Do you plan on purchasing any insurance? If so what type?
Insurance for owners, partners and key employees
Insurance for business property and earnings
Account Receivable Insurance
How many full-time staff will you have?
0, 1-10, greater than 10?
How many part-time staff will you have?
0, 1-10, greater than 10?
For each staff member indicated above, list their title and role.
If do you do not plan on having any staff to start indicate what your plans may be for the future. If you will have full or part-time staff, list each title and how they will contribute to the business.
Once you get a sale how will you fulfill the order?
Outline the process from order to customer delivery. Discuss capacity issues i.e. how many orders you can physically fulfill each day / month? Provide a supplier analysis if your key selling point are your suppliers. What are you lead times from suppliers? What would happen if your key supplier was no longer available?
What are the potential risks associated with marketing and how do you plan on mitigating those risks?
What could cause your marketing efforts to be ineffective and how would you plan to minimize those risks?
What are the potential risks in operations and how do you plan on mitigating those risks?
At what point would you need to close down your business? Consider the worst case scenario. At what point would you need to close your doors? This is a matter of cash flow being able to sustain your business.
Start-Up Costs & Break Even Point
List only the business items that you have already bought for your business.
Start-Up Cost Sheet
Please indicate the total amount of money supplied by each of your funding sources: owner contributed, Loan A, Loan B, Loan C.
Owner Contributed $
Loan A $
Loan B $
Loan C $
How much money will you need to get your business off the ground?
Cost of Item
Accounting Consultation to set up books
Building improvement costs
Computer, printer, fax machine
First and last month rent (aka deposit)
Inventory / Stock / Product
Legal fees to review contracts
Legal fees to review documents
Office Furniture (desk, filing cabinet)
Break Even Analysis
At what point will sales cover all your expenses?
OH: Total Overhead Costs:
P: Average Price of products:
C: Average Cost of products:
Sales Forecast Assumptions
What overall assumptions are you making for your products/services sold?
Year One Sales Forecast
What is the average amount ($) of a sale?
Please indicate the number of sales you expect to close EACH month for the first full twelve months of business.
Month 1 # of Sales Total
What is the average cost of a sale as a percentage of the sale price? 0 to 100 percent.
Year One Sales Forecast Including Assumptions
What are your month-by-month sales forecasts and rationale for Year One?
For each month please provide your rationale/assumptions for the sales number you provided in the “Year One Sales Forecast” section.
Month1 # of Sales Monthly Sales Assumptions
Year Two Sales Forecast
What do you estimate will be the average amount of a sale in year two? Dollar amount
Please indicate the number of sales you expect to close EACH month for the second full twelve months of business.
Month 1 # of Sales Total
What do you estimate will be the average cost of a sale as a percentage of the sale price in year two?
Enter a number from 0 to 100
To determine your General Expenses, please select the appropriate expenses for your business. For each expense estimate the cash out flow for each month.
1st Owner’s draw/salary
Advertising and promotion
Office supplies & postage
Telephone & Internet
Subscription & Memberships
The income statement will be generated dynamically for your business plan. It will use the information you have entered in the preceding financial sections. You can access your completed income statement on the “Download” tab. Click to download the excel spreadsheet that contains this as well as the rest of your business plan financials.
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STEP: HOW TO COME UP WITH GOOD BUSINESS PROJECTIONS TO HELP YOU START YOUR NEW BUSINESS
Business projections are imperative if you are serious about making a success of the venture. It is an important start to any business and needs to understand what drives customers to come through your door, buy your products or services and continue to come back for more.
To have a business venture get off the ground you must develop a business plan, as this can help to raise money from potential investors and advertisers. Bankers and business money lenders will not even entertain a loan if you do not have a business plan.
A business plan will help you project the kind of money you will need from investors to get the business off the ground and running. Potential investors will also be interested in how much profit you expect to make within the first year of trading. And just like a CV or job resume you submit to a potential employer, a business projection plan will only get a few minutes to impress potential lenders.
As a business starter, you need to focus on trying not to be negative. It’s all too easy to look at business projections and say, “I don’t have some magic crystal ball, so I have no idea what the company could or could not make in the first year.”
Other pessimists might worry about being too unrealistic and fail to submit any sort of projection based on the desire to avoid radical assumptions. All business projections will involve a risk, an occasional leap of faith and a fanciful projection of what you could make in that all-important first year.
Investors are going to be interested in your high level forecast of revenue. Let’s say you make a business projection to increase sales of your product or services at a rate of $20,000 per quarter, would you know how many additional leads are going to be needed to meet such growth?
A business projection will account for this and it will allow you to make your figures more scalable.
But is it really important to get it spot on and just right? No, most business owners wildly estimate the profit it promises to try and make in that all-important first quarter, a potential investor or lender would be more interested in seeing growth, even if the figure has not quite matched the initial business projection.
Explain what business projections are, why they are important, how accurate should they be, what should they be based on? Should you have different scenario projections, pessimistic, average, optimistic?
1. Do you know how much money you need to make all this happen?
2. Do you know how much you want to make per year?
3. Is the amount of risk you are taking on in line with the amount of reward you stand to gain?
4. Do you know how much you need to do to make that much per year?
5. What is your high level forecast of revenue?
6. Is the business scalable?
Business Plan Resources
Your business plan is the pillar of your start-up. Assistance while designing a business plan can be searched online. You may also look at sample models to take inspiration. Consult a financial advisor in your locality before you start your business.
BUSINESS PLAN RESOURCES
Explain the various business plan resources available