Resources

Your Business Plan

A well-researched, well thought-out business plan is essential for a number of  reasons. It increases your chances of success by forcing you to consider every aspect of your business before you get started, and it also serves as an ongoing roadmap or benchmark so you can gauge your success once you begin operating. It’s also what investors, including banks, use in evaluating your business idea and the opportunities for success.

Simply put, a business plan is a written summary of all the activities of your proposed business. There are many samples you can find online, but we are not worried about your plan fitting any one specific template or layout.  Just be sure that it addresses:

• what your business does
• how it can compete successfully in its industry given the competition
• how it will run on a day-to-day basis
• vital financial information including projections about income and expenses for the business and your personal financial status

Your plan should be concise (no more than 5 pages plus the Executive Summary) and easy to read.  We would suggest you structure it to include these sections:

• an executive summary/business description that provides:
• the name and location of your business
• the form of ownership (sole proprietorship, partnership, corporation)
• details on the product/service you intend to offer
• the reasons your product/service is needed
• the advantages your product/service has over the competition
• what expertise you and any partners bring to the table

Often, entrepreneurs will write this Summary last, as it is a brief version of all of the content that is to follow in the other sections.

• an industry and marketing analysis that includes:
• information about the industry you’re entering and its trends (is it growing or shrinking, issues affecting it)
• a profile of your potential customers (demographics, location, frequency of purchase, etc.)
• an estimate of how many potential customers are in your market area, and how many of those you think you will get as your own customers
• details on your major competitors, and the advantages your product/service has over theirs (convenience, service, performance?)
• pricing for your product/service, and how it compares to your competition
• a description of how you plan to advertise or promote your product/service – what media/methods to use, brief description of the message and how it portrays your competitive advantages over your competition
• an operational plan that addresses:
• a general description of the day-to-day operations of your business, including hours of business, days open, seasonality of business, suppliers and their terms etc.
• the products and services you’ll need and who your suppliers will be to provide them
• key management background and experience (including your own)
• your employees, including their responsibilities and duties and any training/skills requirements
• the professionals that you have identified to help you – lawyer, accountant, etc.
• any required licences, permits in order to operate
• a financing plan that outlines:
• costs of start-up – equipment, downpayments, and other one-time costs
• costs of ongoing business expenses – overheads, products, employees, etc.
• forecasts of the revenue you will earn, and details on how you calculated it
• amounts and sources of start-up financing, including your own funds contributed
• a cash flow forecast by month for the first two years of operation
• a risk management plan that indicates:
• what you believe the major risks are – inability to get financing, not enough customer uptake, costs higher than expected, technology issues, inability to attract key staff, etc.
• what you will do to mitigate those risks