Mar 9, Business Plan Example of the Industry Overview. Because it's always easier to write something if you can read an example first, here is an example that you can use as a model for your own business plan's Industry Overview section. Please note that 'Pet Grandma' is a fictional pet. The industry overview for your business plan, also called a market analysis, should A local foods business, for example, would be part of the grocery store and. An industry analysis conducted before you begin to write a business plan will help you For example, two businesses selling different brands of house paint will.
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In this article, I will cover the following: Simple business plan outline Detailed business plan outline Standard tables and charts You can click each of the above links to jump directly to that business plan section. Simple business plan outline: Executive summary Write this last.
Opportunity Describe the problem that you solve for your customers and the solution that you are selling. Execution Use this business plan section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business.
Company and management summary This section is an overview of who you are. Listen to Tim Berry discuss lean business planning: More business planning advice: More business planning resources: Sample business plans: Over free sample business plans from various industries. Business plan template: This fill-in-the-blank business plan template is in the format preferred by banks and the U.
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When used as part of the process of creating an easy business plan, product features comparison data can provide information that is critical to making marketing decisions. If the features of the competing product give it a performance advantage over your own, you can evaluate how important those features are to determine if your product should be redesigned.
Another source of information on the product is the internet. What are consumers saying about your product versus the product sold by your competitor? Product reviews by websites that specialize in testing products could also tell you how your product is faring in the marketplace in comparison to other products. The information you obtained through your research and product testing is easier to compare if it is compiled in a simple table format.
The features of each product can be listed under separate columns for each feature, and each product feature can be judged to determine which one was the best.
The winning product is the one that ends up with the most points. Another method of evaluating the features of different products is to assign a score of 1 to 10 with the higher score going to features deemed to be the most important as far as product performance.
The winning product is the one that ends up with the highest overall score. The conclusions you reach from the data a product feature comparison gives you can be incorporated into the market analysis, competitive analysis and marketing plan sections when you begin to write a business plan. The information will also be useful in guiding decisions made for the future development of new products.
Market research provides businesses with information about their customers and the markets in which they do business. By analyzing the data that it collects, business owners offer products that consumers want at prices that are competitive with other sellers. For the new entrepreneur who is learning how to start a business, market research performed prior to the preparation of a business plan can help in formulating strategies to reduce risks, recognize marketplace and industry trends, and identify opportunities to increase sales.
The marketplace for many businesses is no longer limited to one country. The growth of internet commerce has made it possible for even small businesses to participate in the global economy that exists for many products and services.
Market research can help owners of businesses to evaluate the feasibility of expansion into international markets. The data collected through market research should give a business owner the answers to the following questions: The methods of gathering information about consumers do not have to be complicated. Frequently used methods include: Interviews by telephone or face-to-face Surveys conducted online, by telephone or through the mail Questionnaires completed online, in person or through the mail Focus groups to solicit feedback from people representing a cross-section of potential customers.
Too many business owners think of a business plan as the thing they need in order to convince a bank to lend their company a loan or to convince a venture capitalist to invest in it. In fact, business plans come in all shapes and sizes depending upon the audience for which the plan is intended. For example, a startup company would want a business plan containing all of the bells and whistles to serve as a comprehensive guide for the new owners and management.
Business plans are written with an audience in mind. It can also be written with a specific project in mind to allow owners and managers to evaluate the feasibility and profitability of the project. These types of plans might include projections about profitability and growth ten or more years into the future.
External plans are written for the benefit of an audience located outside of the company. Prospective investors or venture capitalists and lending institutions are examples of the types of audiences for which external business plans are created. These types of plans are created to answer a question or address a particular problem. For instance, prospective investors want a business plan that demonstrates future growth and profitability of the company to generate a return on their capital investment.
Too many businesses start out with inadequate planning. No one goes into business to lose money. If you start a business, your expectation is that it will be profitable and that it will succeed.
Writing a business plan forces you to focus on the strategies that will make your business a successful one.
That is why learning how to write a plan is so important for new businesses or established businesses that might be venturing into new markets or launching new products.
Business plans come in all shapes and sizes, so what you choose to include in your business plan will depend upon your audience, the question it seeks to answer or the problem it seeks to resolve, and your personal preferences. The most frequently included elements of a business plan are the following:. Regardless of the business plan format chosen, the executive summary always appears first in the document. Its purpose is to educate and inform the reader about the company.
It should explain where the company is at the present time, where it is going and how it plans to be successful. In a plan prepared for an external audience, such as investors or bankers, the executive summary is the first opportunity the business owner has to engage the interest of the reader. Even though it appears first in a business plan, the executive summary should be written last. The executive summary is a snapshot of your business plan that a reader can quickly look at to become acquainted with your business.
Writing it last allows you to highlight the strengths of your plan into the first section your audience reads. Remember that even though it might be the last thing you write for your business plan, the executive summary is the first thing that people will read.
Think of the executive summary as a highlight reel showcasing your business. One of the reasons for saving the executive summary until last to write is to give you the chance to include the best parts from each of the sections of your business plan in it. Write the executive summary with a particular audience in mind. Reference the market research and marketing strategies that demonstrate how your company will take advantage of this.
After completing the executive summary, read it aloud. It should convey your intended message in clear, unequivocal terms that flow without sounding like a sales pitch. The purpose of the business description is to help a reader to quickly grasp the goals the company has set and how it intends to meet those goals. Begin the description with a few sentences that give a capsule view of the company, its product and its position in the industry in which it competes.
This is an elevator pitch to get the reader interested in learning more about the company. Let the reader know if this is a new venture or one that has been in business for a while. The business description should continue with a statement about the type of business structure adopted by the company. Explain whether it is a corporation, partnership, sole proprietorship or limited liability company, and list the names of the principals along with brief profiles for each one showing how their presence benefits the company.
Part of the description of the business should include information about the products and services sold by the company, the potential customers, supply and distribution channels, competitive advantages offered by product features and how the company plans to exploit those advantages.
End the business description by explaining the specifics of how the company plans to be profitable. The business description section of a business plan should not be overly long. Depending upon the size of the company and the number of products offered by it, a description that is one to two pages in length should suffice. Business planning is an on-going process that does not begin and end with writing a business plan. Periodically taking stock of how a company is doing is essential to ensuring that it meets its goals and will become or continue to be successful and profitable.
A business plan should be flexible by incorporating tools to analyze company performance in comparison to other businesses in the industry.
A business environmental analysis accomplishes section accomplishes this by providing useful information to management and company owners.
Analyzing this data affords the management team an opportunity to identify those plans and strategies that are working, as well as those that are not.
The environment in which a company operates involves internal and external factors that influence how business is conducted. A systematic process of analyzing the environment to identify those environmental factors affecting a company, determining the impact they are having on the business and developing strategies to take advantage of them or limit their affects.
After a business has implemented a strategy, the process continues with monitoring of the business environment to ensure that the strategy is working and does not require modification or change. Business plan tools that give management a constant source of current and accurate information about the marketplace and the industry, as well as competitive forces at work in both, are essential to an effective analysis of the business environment. Three of those tools are the industry analysis, the competitor analysis and the market analysis that should be included when writing a business plan.
The industry analysis that you performed before sitting down to write your business plan can be incorporated into it to provide data on the industry and markets in which your company conducts business. Drawing upon the data you collected by using the various industry analysis resources mentioned earlier allows you to identify the risks and opportunities confronting the company as it prepares to enter the marketplace with its products or services.
This information permits you to develop strategies to take full advantage of the opportunities presented to business while minimizing or avoiding the identified risks.
You want your business plan to tell you how your company compares to others in the industry. A competitive analysis section draws upon the research you did before you began to write your business plan to offer the data and analysis to support your performance assumptions. Writing an effective competitive analysis can be accomplished in five steps. Keep in mind that the data you will need about your competitors should have been gathered earlier when you conducted the industry analysis prior to starting work on creation of your business plan.
Creating a market for the product or service your company offers began with the business environment analysis and continues through the development of a marketing strategy. A marketing strategy must be flexible and should be evaluated periodically to determine if it must be reworked due to changes in the marketplace.
The strategies created by a company under its marketing plan are affected by or have an effect upon other aspects of the business plan. For instance, a decision by a business to expand into new markets by acquiring a company already selling in the new market might be hampered by a lack of capital to complete the transaction, or it might force the company to seek additional capital by adding investors or borrowing money.
The operations plan is closely tied to the team and management plan section of a business plan. An operations plan is the engine that runs the machine you call a business. Without an operations plan, nothing else in your business plan will get done. The operations section of a business plan created to obtain bank financing or for some other external purpose does not require the details that must go into a plan that will guide ownership and management in running the business.
This section should be crammed with details and instructions to direct people within the organization in the day-to-day operations of the business. The personnel covered in the team and management plan section of a business plan should be able to refer to the operations plan for guidance in carrying out the strategies and tasks needed to run the business.
The people who make up your ownership and management team are the focus of the team and management portion of a business plan for entrepreneurs. Whether intended for internal or external use, readers of this section of a business plan should have a clear understanding of who is in charge.
The length and complexity of this section will depend upon the size of the company. The business plan written by a sole proprietor will be much shorter than one prepared for a corporation with multiple management teams, a board of directors and multiple locations.
Included in the team and management section is a list of owners and key management personnel along with a description of the role each plays in running the organization, the compensation and benefits each one receives, and the criteria used for giving promotions and increasing compensation. Brief biographical information for each of the owners, key personnel and members of the board of directors offers readers insight into the qualifications each person brings to the organization.
This section of the business plan provides readers with a picture of where your company has been and where it is going from the point of view of its finances.
Established companies should include financial data of past performance. Banks, venture capitalists and other lenders usually want at least three years of financial data, but some might want to see up to five years of information. Financial data that should be included in the plan include income and cash flow statements and balance sheets. For these reasons, you should devote a special section of your plan to identifying competitors.
If you sell soccer shoes, for instance, Adidas is a bigger player than either of the two American firms. And smaller firms such as Etonic, New Balance and Saucony also have niches where they are comparatively powerful. You can develop a list of competitors by talking to customers and suppliers, checking with industry groups, and reading trade journals.
You need to know their manner of operation, how they compete. Does a competitor stress a selective, low-volume, high-margin business, or does she emphasize sales growth at any cost, taking every job that comes along, whether or not it fits any coherent scheme or offers an attractive profit? Knowing this kind of information about competitors can help you identify their weaknesses as well as their names.
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