What's in a business plan?
Over the past few weeks, I've been participating in a course at the Richard Ivey School of Business on the subject of entrepreneurship. The first session discussed the importance of having a business plan. Here are some of the highlights.
What is a business plan?
* A critical document that clearly describes your idea
* A document that others will judge your business upon
* A living document that will change over time
* A tool to increase your chance of success
Why do you need a business plan?
* Test feasibility of your idea or business concept
* Helps you measure short term / long term profitability
* Prepares your business for the future – plots a course, aligns goals, account for resources, implementation plan including benchmarks, milestones and with dates your working towards
* Communicates your vision to key enablers ( e.g. management team, establish credibility among investors, bankers and advisors )
When should you start a business plan?
Start researching the idea immediately. Engage in two types of research.
1 . Primary research ( networking, customers, surveys and focus groups etc…)
2. Secondary research ( Internet, associations, magazines etc…)
The Business Plan
Executive Summary
Keep it short, punchy, succinct, leave the reader wanting more
Company Profile
History, Key management team, subject knowledge, operational knowledge, business acumen and skills
Product Overview
What pain does it solve for the customers? Current solutions ( the traditional model ), secondary products
Market Opportunity
How big is the market? Who is the target market? Can you segment the market? Who are the key customers you’d like to go after?
Sales and Marketing
Revenue model, sales cycle, web sales cycle, sales channels
Operations
Equipment, skills, human resources, identify holes in personnel and how you’re going to fill it.
Financials
Income Statement, Statement of Cash Flows, Balance Sheet, Funding Needs
Appendix
Biographies of the management team
To wrap-up, you can find plenty of samples of Business Plans on the Internet, however remember they are just that, templates. There is no standard business plan, so be sure to customize the contents of the plan to accurately communicate your vision for your business.
