I have been writing a business plan since 2003 to participate in the LiveWIRE business plan awards. I won the grand prize for the livewire participant category in 2006/2007. I have also participated in the think big business plan competition. Considering I am going to submit another business plan, I thought it would be appropriate for me to share what I know. For starters I’ll just share the purpose and the structure of a business plan. I’ll cover other topics some other time.
As a disclaimer, I am not an academic business student. I do not have a degree in business or administration. I studied mathematics and science. My knowledge of business plans or business is from reading books, internet resources, participating in courses, competitions, and doing business.
First thing before writing a business plan… Choosing a business idea. Your Business Ideas should have 3 main criteria:
- Something you love to do (Passion)
- Something your good at or you know a lot about (Skill)
- Something that you can make money (Market)
You have to have all 3 or else it won’t last long. Don’ t care about how much it would cost to startup, because if you have all three, you won’t have problems that you can’t handle.
There a lot of purposes to creating a business plan, among them are:
- to put ideas from inside your head on paper, then you can start organizing ideas in concept maps or stages, so that you know what you need to do to start and see what else is missing.
- as a road map to a startup business, or an ongoing business.
- to present to partners, investors and bankers for financing purposes.
- to present to your company or employees to share with them their part or purpose in the whole picture.
- or to join a competition.
The Structure of a Business Plan Varies, but most academic books would show it as follows:
- Executive Summary – This is the first part read, but often the last part written. This is the movie preview. Most judges, bankers, or investors may not have the luxury to read the whole business plan. So make sure this part makes the reader want to read more.
- About the Company – Here is where people describe their business. starting with the Mission and objectives. if it is an ongoing business, write about the milestones and achievements. If it is a startup then write about the planned milestones and also the startup costs.
- Products or Service – Describe the products or service. How is it different or unique to everything else in the market, or how does it solve a problem. Recently, here is where people would put how their product and service cannot be duplicated easily. i.e. the use of intellectual property.
- Market and Industry Analysis – Describe who would be interested in your product. Never say everyone, because it rarely ever is. Write up the market segmentation – age group, gender, occupation, geographical location, etc. Describe your competitors, what do they do and how you are different. Here is where you would use SWOT (Strength, Weakness, Opportunities and Threats) Analysis to see the things that your company does compared to others. Write up what the market factors that will lead to your success in terms of Political, Economical, Social, and Technology (PEST)
- Market Strategy – Describe how you would reach the aforementioned target. What medium of marketing and advertising you would use, and when you would use it. It would be nice to be able to put marketing calendar and budget at this point.
- Human Resources/Organization Strategy – Describe who are the people who would be working in the company. Show the organization structure, The positions roles and responsibilities. If you have people working with you then write up a brief description of them. If not, then the qualities and the qualifications required of those position.
- Operations Strategy and Business Model – Describe how the company is going to be operated, and how it makes money.
- Financial Analysis – Show the calculation of money going in and going out in terms of Startup Costs, Sales forecast, Profit and Loss, Cash flow forecast, Balance Sheet and Break even analysis.
- Future Plans/Exit Strategy – Describe what the company will do in the future – Expanded, be bought and sold, become public, etc.
I will be covering some of this topics in future posts. Previously, I have had the pleasure of facilitating a Business writing Workshop at the LiveWIRE Business Plan Series. The following is the facebook photo album of the workshop. http://www.facebook.com/album.php?aid=102586&id=550578077&l=e876bd84c4
Other Resources that you might be interested in:
-search for business plan in:
-check resources in:
- Kiyosaki – “Guide to investing”. The first part of the books he explains about business systems.
- Michael e. Gerber – “e-myth”. This book is about how to work on business and not stuck in business.
- Business plan for dummies or idiots. Hey, its a simple guide.