Whether you start a new business, diversify your markets, introduce new products, or
attract investors to your business, a well structured Business Plan is essential!
Why outsource your Business Planning?
It has been argued that, in order
to maximize their effectiveness, business plans should be prepared by
the managers who are going to use them.
There are many reasons why this
advice is often overruled in favor of using consultants to provide
assistance during the business planning process. The most
important is the large number of topics that the business plan must
include. In fact, each component encompasses an entire field of
knowledge. Managers often do not have the in-house skills
available to cover all areas of the business plan effectively. In
conjunction with the range of topics covered by the business plan, is
the sheer volume of work needed. Outsourcing your business plan
frees you to dedicate your efforts to keeping the business moving
What goes into a Business Plan?
This is a question that any new business owner should ask and often
don't ask. The body of the business plan can be divided into
four distinct sections as indicated below
- Description of the Business
- Firstly, a Business Plan contains a complete description of the
business, which starts with the overall purpose objective of that
business, the mission and the long term goals of this business.
A Good question to ask is: "What business am I in?"
The answer to this question includes the products, the market and the
services as well as a thorough description of what makes your
business unique and appealing to the market.
The business description is divided into three sections:
- Section 1 actually describes your business. This includes among
others, legalities, business form, proprietorship, partnerships,
licenses, permits, etc. Also the business type: merchandizing,
manufacturing or service, description of the product or service, why
and how the business will be profitable, the growth
opportunities. Will franchising impact on growth
opportunities? Very important is what can be learnt from
- Section 2 The product or services you will be offering. The
challenge in this section is to describe the product or service from
the customers' perspective. This type of anticipation is
helpful in building customer satisfaction and loyalty. Most
importantly is to describe exactly what is different or unique about
the product or service that will appeal to the customer.
- Section 3 The location of your business. The location
of your business can play a decisive role in its success or failure.
Your location should be built around your customers, it should be
accessible and it should provide a sense of security. Consider these
questions when addressing this section of your business plan:
What are your location needs?
What kind of space will you need?
Why is the area desirable? The building desirable?
Is it easily accessible? Is public transportation
available? Is street lighting adequate?
Are market shifts or demographic shifts occurring?
Management and Organization
- If external financing is being sought for the
venture, particular attention attention should be paid to this
section. Most investors place a heavy
emphasis on the individuals involved in the business because
management is one of the key factors responsible for the success or
failure of a business. Investors
will evaluate the technical and managerial experience of the parties
- Therefore the business development plan must
clearly and completely describe the management structure and the
people who will operate the business.
The key positions in the company; the key employeesí
education, skills and experience and the board of directors should be
outlined. If there are
absences or weaknesses on your management team, explain how you will
develop and strengthen the management team.
The idea behind this section
is to show potential investors that you have fully considered the business
environment. In order to
accomplish this several elements of the risk facing the venture must be
identified. These include the risks the business will face; how the risks can
be minimized or avoided; the impact of the risks on the business; and the
steps which can be taken to mitigate their impact.
If the plan is
intended for in-house use, the risk analysis will reveal what aspects of
the business are vulnerable. Some
potential risks include the risk of new entrants, possible scarcity of
vital raw materials, market share shake-out or the poor health of a key
The Marketing Plan
Marketing plays a vital role in successful
business ventures. How well you market you business, along with a few
other considerations, will ultimately determine your degree of success
or failure. The key element of a successful marketing plan is to know
your customers - their likes, dislikes, expectations. By identifying
these factors, you can develop a marketing strategy that will allow
you to arouse and fulfill their needs.
Identify your customers by their age, sex,
income/educational level and residence. At first, target only those
customers who are more likely to purchase your product or service. As
your customer base expands, you may need to consider modifying the
marketing plan to include other customers or products.
A detailed analysis of market
characteristics, segments and trends is necessary.
The goal of the Market Analysis is to show how the company
views the market, and to determine how sound the market really is.
Outside investors, particularly venture
capitalists place a heavy emphasis on this section.
To appeal to this group, the market's grow rate must be high, a
ten fold growth in 5 years is typical.
Even for inside use, pay
particular attention to the size
of the market and the growth rate.
Is the market capable of sustaining your product or service as
well as competitors and substitutes?
Is your goal to increase market penetration or to displace
Developing this section will give
you an idea of what your potential revenues will be.
Issues that must be addressed are:
What is the target market (who
has a need for your product or service)?
How is the market segmented? Some
examples are: customer age, income, lifestyle, and geographical
large is the market in total and by segment?
are the growth trends in the market and in the various segments?
The analysis should also focus on
buyer behavior, and describe the target marketís product or service
preferences and reasons for purchasing.
A complete picture of the
competitive environment is vital.
This is an analysis of the industry which includes its size,
maturity, and competitive nature coupled with an analysis of the firms
(direct and substitute) competing in the industry.
In addition to establishing the level of rivalry in the
industry, a focused environmental analysis should be included which
strives to ascertain the effects of societal, political,
technological, and economic trends on the business.
- Financial Management
- After Completion of all of the above sections, it is possible to build
a five-year financial forecast from the information contained in the
plan. We believe a five-year forecast fully describes the expected
sales growth for the business. Bear in mind that the first year forecast is the most
important. The element of
uncertainty contained in a projection grows proportionally with the
length of the forecast. But how well you manage the finances of
your business is the cornerstone of every successful business venture.
Each year thousands of potentially successful businesses fail because
of poor financial management.
The forecast includes pro-forma balance sheets, income statements and
cash flow statements. Prepare the statements on a monthly basis
for the first year, a quarterly basis for the next two years and
annually for the last two. Including a capital plan (budget)
adds to the detail given in the financial statements. All
assumptions used in developing the forecast should be clearly stated.
This prevents any misunderstandings.
How we can help you
- Within Quartz Technology, we have the tools necessary to help you
build your highway to success.
- It is our motto and our mission to help build a successful business
environment in our country. All you need to do is pick up a
telephone and give us a call, or write to us or fill in the information
sheet. We will contact you immediately to discuss your needs.
- Our Guarantee
- Your involvement with us WILL have a positive effect on your business. We
are there to lead your organization to leadership and we will ensure that
together you will end up at the top!
- The Reason ...
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