Carol Lindberg ⋅ San Diego, CA ⋅ 10 years experience

Dreaming of starting your own business and preparing to become a business owner are different things. Every successful entrepreneur started with a well-written, specific plan. Here are three tips you cannot ignore when preparing a business plan.

One: Determine Your Niche

Is this a product aimed at environmentally conscientious individuals? Are you developing a service for moms with small children or seniors needing home support? Ask yourself, "why am I starting this business?" There has to be a gap in existing services or products which your firm will fill; or room for more competition in a burgeoning field. Solid research will help you come to a reasonable conclusion: is there a need for the product or service you hope to offer? Consumers are always looking for new, unique ideas. Don't be afraid of taking a risk if you've got something different to offer.

Two: Get a Feel for the Competition

Part of knowing your niche is really understanding competitors. New businesses are often opened by people who once worked for the competition so they have detailed, inside knowledge of what it takes to be successful. Marketing strategies are familiar. They know who the audience is. Pricing is easier to nail down and these entrepreneurs start out with lots of ideas for attracting and keeping customers. You aren't re-inventing the wheel; build on what the competition has already taught you about the industry.

Business Leadership Resource:
http://taxandbusinessonline.villanova.edu/resources-business/article-business/tips-for-tomorrows-business-leaders.html

Three: Budget for Success

Most people need a loan and/or investors to finance a business project. In order to attract these individuals, an entrepreneur must prove that the finances have been carefully considered. Part of your research must involve projected costs and earnings. Create an itemized list which looks at all costs including rental of shop space or a warehouse, capital expenses (things you will have to buy outright) and equipment rental where required, insurance, wages, utilities, licensing, and buying the product you wish to sell. Suggest profit margins and a fallback plan for lean times. Indicate how much you will spend on advertising and what this will look like. It helps if you already have a solid grasp of your market so that advertising will reach its target most effectively. Convince investors you're prepared.

Budgeting Resource:
http://onlinemasters.ohio.edu/creating-millennium-friendly-financial-advising/

Ryan Brown ⋅ Melbourne, FL Patriot Investment Partners ⋅ 2 years experience

Thank you all so much for the AWESOME feedback. I really really appreciate it.

James Watters ⋅ Norman, OK Business Consultant, retired ⋅ 17 years experience

There are a variety of sources for business plans - search the Internet. Most use the same basic format. Check out business plan.com. What I would emphasize is the "Executive Summary". The ES is a short (no more than two pages) that describes the more important points of the company. What makes your business special? Will the summary entice the reader to read the rest of the plan? At the end of the second page insert a simple chart that shows the company's Net Revenue, Gross Profit and Operating Income over the next 3 years.

If the business is new and If you were ever told new businesses always lose money the first year or two, you were told wrong. Never plan to fail! Remember this one thing. You're in business to earn a profit. You're not in business to sell products or services, hire employees, or any other reason. What's the plan for profit and how will you manage that plan? Good luck.

Emanuel Carpenter ⋅ Alpharetta, GA SDR Master Class ⋅ 20 years experience

I wrote a business plan a couple of years ago. My SCORE advisor let me know about the free templates for business plans available through Entrepreneur Magazine here: http://forms.entrepreneur.com/business-plan.

James Yaple ⋅ Austin, TX Department of Veterans Affairs ⋅ 25 years experience

Ryan,

A business plan is typically created to obtain funding (loan) or buy-in from others. A secondary purpose is a business plan can help you get organized. There are any number of books and software available to help you create a business plan. There are also retired executives in almost every city working with the Small Business Administration that advise new and prospective business owners. Check out https://www.score.org/.

The most viewed section of your business plan will be the financial summary and projected income statements. I always start with a sales projection. How much revenue can you generate. Many people who look at your business plan may not look at anything else if this is not well prepared.

You also need a very strong executive summary, but words cannot cover bad numbers.

Here is an outline I found online: http://articles.bplans.com/a-standard-business-plan-outline/

Detailed business plan outline:

1.0 Executive Summary

1.1 Problem
1.2 Solution
1.3 Market
1.4 Competition
1.5 Financial Highlights

2.0 Products and Services

2.1 Problem Worth Solving
2.2 Our Solution
2.3 Validation of Problem and Solution
2.4 Roadmap/Future Plans

3.0 Market Analysis Summary

3.1 Market Segmentation
3.2 Target Market Segment Strategy
3.2.1 Market Needs
3.2.2 Market Trends
3.2.3 Market Growth
3.3 Key Customers
3.4 Future Markets
3.5 Competition
3.5.1 Competitors and Alternatives
3.5.2 Our Advantages (see an example)

4.0 Strategy and Implementation Summary

4.1 Marketing Plan
4.2 Sales Plan
4.3 Location and Facilities
4.4 Technology
4.5 Equipment and Tools
4.6 Milestones
4.7 Key Metrics

5.0 Company and Management Summary

5.1 Organizational Structure
5.2 Management Team
5.3 Management Team Gaps
5.4 Personnel Plan
5.5 Company History and Ownership

6.0 Financial Plan

6.1 Revenue/Sales Forecast
6.2 Expenses
6.3 Projected Profit and Loss
6.4 Projected Cash Flow
6.5 Projected Balance Sheet
6.7 Business Ratios

7.0 Appendix

I hope this helps.

James