With a new product design under your wing, you’re ready to start your business. Right? Not so fast. How will you market this product? What will be the product run? Who will invest in your business? By following a comprehensive business plan, you will be on the road to success. The business plan for one business will not be identical to another business’ plan. Each plan is a unique guideline for the path the business will follow. A business plan should be followed precisely, but deviations due to unexpected events or fluctuations in the market should be expected. Think of the small business plan as a road map with goals. Often plans are done in 3- or 5-year cycles, and the goals can be large or small. Each goal should have a deadline for completion. With the plan, all company employees from management to technician should know the company’s goals. Of course, management may choose not to share all facets of the plan with staff due to sensitivity of the data. For instance, if the plan contains details about a move to another state in Year 3 of the plan cycle, an employee might decide to leave the business. Why Have Business Plan? Stakeholders in the business want to know what lies ahead for the business. Investors have a vested interest in knowing as much about the business as they can. The plan should show investors when products will be released or a overhaul of a manufacturing plant. Everything from salary increases, market fluctuations, newly released legislation has an impact on the business. The Small Business Plan Use serious, professional language when writing the plan. Parts of the business plan may be used for loan, grant, or other applications. The format for the business plan should include the following items: Executive Summary -- Think of this as the information you would cover in a 5-minute interview about your business. Explain what you make, provide to customers. Describe the products. List the owners. Predict where you see the business and the industry. Mission Statement -- Explain company’s purpose in less than 30 words. Overall Goals and Objectives -- Where will the business be in the future? How will you measure achievement of objectives? Business Philosophy -- What is important to the business? Target audience for products, services With the preliminaries out of the way, the business plan moves to the products and services of the business. Include product specifications, graphics, sales brochures, and anything else that relates to the product. Include why the business has a competitive advantage or disadvantage over competitors. Is there anything unique about the product? What is the pricing fee structure? The Marketing Plan A subset of the small business plan is the marketing plan. You can have the best product in the work, but if no one knows about it...what then? The business plan is a method of record keeping and of showing where the company’ future lies. In the marketing plan section, list any research, such as industry profiles, demographic surveys, census data, and trade journals. Did you survey your customers to find whether a need existed for a product redesign? Did you hire a market research firm to poll the industry segment? Include relevant data in the marketing plan section of the business plan. Also include, how you will market the business...pay-per-click advertising, newspaper and trade journal ads, or social media outlets, such as Twitter and Facebook. Operational Plan While looking to the future is essential, don’t forget to examine the day-to-day operating practices. Research the industry niche to make accurate predictions on operating costs. Will the company expand its product line? When? Management and Organization The business may start with one employee...you, but at some point you will want to hire administrative or other staff. List your plan for hiring staff. Will you hire a manager of operations or expand the technical staff first? When will any hiring take place? Financial Plan Keep records of all start up expenses. Starting a business is a costly proposition. Unexpected expenses will crop up through out the start up process. A financial plan consists of: a profit and loss projection for a 12-month period a 4-year profit and loss projection a cash flow projection a projected balance sheet a break-even analysis Add detailed information regarding all investors and owners with amounts contributed. Include all loans, grants, or liabilities that the company has. Small Business beats out Major Companies and the Federal Government in Americans' opinion of which one they view most favorably. 53% of Americans Have a Very Favorable Opinion of Small Business Results from a survey commissioned by the Public Affairs Council show that more than half of Americans (53%) have a “Very Favorable” opinion of small business, compared to only 16% of those surveyed having a “Very Favorable” opinion of Major Companies. As for the Federal Government, it received only a meager 9% “Very Favorable” rating. Opinions of Small Business are Great; the Federal Government, uh, Not So Much In the graph the results from the survey show that Americans have a favorable opinion of business in general, and small business in particular (Small Business = 53% “Very Favorable” and 35% “Somewhat Favorable” = 88% favorable overall; Major Companies = 16% “Very Favorable” and 51% “Somewhat Favorable” = 67% favorable overall). But, when it comes to the Federal Government, more than half of Americans have an unfavorable opinion (27% “Not too favorable” and 28% “Not at all favorable” = 55% unfavorable overall). With only 41% of Americans expressing a favorable opinion of the Federal Government (9% “Very Favorable, 32% “Somewhat Favorable”), it is readily apparent that politicians in Washington need to work on their image. Small Business Employers Overestimate How Loyal Their Employees Really Are In 2011, 54% of employers whose businesses employ between 2 and 499 employees felt that their employees feel a very strong sense of loyalty to their employer. However, only 44% of employees employed by firms of that size in 2011 reported feeling a very strong sense of loyalty to their employers. That leaves a 10% difference between how employers view employee loyalty, and how much loyalty employees actually feel. Overestimating Employee Loyalty Nothing New In 2008 small business employers underestimated their employees’ loyalty, with 57% of small business employees feeling a very strong sense of loyalty to their employers, and only 49% of small business employers feeling that their employees had a very strong sense of loyalty to them. However, since 2008 the trend has reversed and small business employers’ confidence in their employees’ loyalty has increased, while their employees’ actual sense of loyalty has decreased, resulting in employer overestimation in 2009, 2010 and 2011. See graph for the survey results from MetLife for the past 4 years. Who will small business owners vote for in November? According to a Manta survey of small business owners, 61% of small business owners plan to vote for Romney, while only 26% plan to vote for President Obama. The remaining 13% of those surveyed were either undecided (10%) or do not plan on voting at all (3%). Democrats or Republicans – Which party is the biggest supporter of small business? More than half (54%) of the small business owners who responded to the Manta survey have the opinion that the Republican Party is the biggest supporter of small business. The Democratic Party received only 19% of the respondents’ votes, while 13% felt Independents (9%) or “Other” (4%) are the biggest supporters of small business. The remaining 14% responded that “None of the Parties” are small business’ biggest supporter.
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