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This is an example of how to write a business plan. This document is useful for studying how to write a business plan.
What is a business plan? A business plan is a written description of your business’s future. It’s a document that describes what you plan to do and how you plan to do it. What a shame to have a brilliant idea, and the right process of executing it only to communicate the idea without being concise, compelling (convincing/forceful) and complete. Be Concise: The goal of the business plan is for the entrepreneur to explain the company they want to build so they will a) be able to condense it and render an executive summary that the investors will read and b) have a basic execution plan for the company. Be Compelling: A compelling opportunity is optimized by the right deal, with the right price, at the right time, with the right product/service and the right team. Compelling deals always get financed with favorable terms. Be Complete: You must have a trusted third party review your plan to ensure it addresses all possible issues an investor may have. An incomplete plan, such as one that lacks three years worth of financials, or lacks a marketing or sales strategy, or a section describing the first few releases of a product and the high level technology strategy, makes it look like the entrepreneur hasn’t thoroughly thought out their business. This makes them look either unprofessional, fly-by-night, or both. Be complete-it will help you gain the trust of all who read your plan. Business plans can help perform a number of tasks for those who write and read them. They’re used by investment-seeking entrepreneurs to convey their vision to potential investors. Simply stated, a business plan conveys: o your business goals, o the strategies you’ll use to meet them, o potential problems that may confront your business and o ways to solve them, o the organizational structure of your business (including titles and responsibilities) o the amount of capital required to finance your venture and keep it going until it breaks even. A good business plan follows generally accepted guidelines for both form and content. There are three primary parts to a business plan; o The first is the business concept, where you discuss the industry, your business structure, your particular product or service and how you plan to make your business a success o The second is the marketplace section, in which you describe and analyze potential customers: who and where they are, what makes them buy and so on. Here, you describe the competition and how you’ll position yourself to beat it. o Finally, the financial section contains your income and cash flow statement, balance sheet and other financial ratios, such as break-even Compiled by Donna George 9/9/2008 12 Purdue University Calumet Regional Coordinator Opportunity for Indiana Business Plan Competition analyses. This part may require help from your accountant and a good spreadsheet software program. Breaking the three major sections down even further, a business plan consists of seven key components: o Executive summary o Business description o Market strategies o Competitive analysis o Design and development plan o Operations and management plan o Financial factors In addition to these sections, a business plan should also have a cover, title page and table of contents. How long should your business plan be? A typical business plan runs 15 to 20 pages, but there’s room for wide variation from that norm. Much will depend on the nature of your business. If you have a simple concept, you may be able to express it in very few words. On the other hand, if you’re proposing a new kind of business or even a new industry, it may require quite a bit of explanation to get the message across. Compiled by Donna George 9/9/2008 22 Purdue University Calumet Regional Coordinator Opportunity for Indiana Business Plan Competition
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