DEVELOPING A BUSINESS PLAN – WHETHER IT’S A NEW STARTUP OR AN ONGOING BUSINESS

WHY YOU NEED A BUSINESS PLAN

  1. To determine how much capital you need and for cash flow
  2. To determine how long it will take to be profitable
  3. To determine if your business can ever be profitable
  4. To chart a course of what needs to be done and how to do it
  5. To provide a road map – a base from which changes can be made
  6. To get other people’s input

HERE ARE ALLAN STARR’S BASICS OF A GOOD PLAN

Know your position

Determine the specific niche your business intends to fill (what you will be in the minds of your prospects and customers/clients).

In establishing your position, think in terms of:

  • Objectives
  • Strengths and weaknesses of what you offer
  • Perceived competition
  • Target market, i.e., its needs
  • Marketplace trends

Ask yourself these basic questions:

  • What business am I in?
  • What is my goal:
  • What benefits do I offer?
  • What are the competitive advantages?
  • What do I fear?

Identify your target market

Then, measure your position against four criteria:

  • Does it offer a benefit that your target market really wants?
  • Is it a valid benefit?
  • Does it truly separate you from your competition?
  • Is it unique and/or difficult to copy?

Create your strategy

This can be accomplished with seven sentences:

  • Know your purpose (to maximize profits, etc.)
  • Describe how you will accomplish it
  • Describe your target market(s)
  • Outline the tactics you’ll employ
  • Describe your niche
  • Reveal the identity of your business (what you want it be known for)
  • State your budget (if estimable)

Set your positioning statement

The positioning statement reveals the identity of your offering; it explains what the product/service stands for, why the offering has value, and why it should be purchased.  Unlike image, which is the impression you choose to make for your business, identity defines what your business is really about.

Develop your working marketing plan

  • Identify the market
  • List goals
  • Address long-term and near-future vision
  • Consider (realistic) market share
  • Schedule timing
  • Make projections
  • Provide promotional framework
  • Specify media and other avenues to use
  • Consider personnel issues and outsourcing
  • Reflect on potential obstacles/pitfalls
  • Consider remedies
  • Estimate campaign costs

Consider the use of a situational analysis

This should include information about your:

  •  Key prospects and audience
  • Current and expected competition
  • The possibilities, probabilities and reality of the marketplace at (this) time

Financial plan/projections

It’s a lot of work, but well worth it.

Allan Starr is the founder and creative director of Marketing Partners, at astarr@markpart.com.

 WRITING A BUSINESS PLAN

Business Plan considerations:

  • Why write a Business Plan
  • What do lenders and investors look for
  • Developing an Exit Strategy
  • Developing financial assumptions

Cover sheet:

  • What to include

Executive Summary

Part I/The Organizational Plan

  • Description of the business
  • Products or services
  • Management and personnel, description of departments and their functions
  • Legal structure
  • Location
  • Accounting and recordkeeping

Part II/Organizational Plan

  • Description of process of product development and design
  • Sourcing of fabrics
  • Sourcing of labor, justification for location of production
  • Wholesale pricing structure, cost sheets
  • Description of total quality management program
  • Servicing your customer, order processing, returns, credit checking
  • Description of sales management program

The Marketing Plan

  • The Product-Market Analysis
  • What is your marketing plan
  • Target market
  • Competition
  • Methods of distribution
  • Promotion
  • Timing of market entry
  • Pricing
  • Industry trends

Financial Information

  • Types of financial documents
  • Summary of financial needs, startup needs and ongoing needs
  • Pro Forma statements
  • Pro Forma cash flow statement
  • Balance Sheet
  • Profit and Loss Statement

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2 Comments

Filed under Blog

2 responses to “DEVELOPING A BUSINESS PLAN – WHETHER IT’S A NEW STARTUP OR AN ONGOING BUSINESS

  1. This gets put in my permanent file.
    Along with other excellent ideas and business practices hijacked from Art Schwartz.

  2. kevin

    Excellent info! Thanks for sharing!

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