Business Overview - What is your business idea in simple clear language
Many entrepreneurs tend to be vague in the description of their business idea. In this section, please be as specific as you can in simple language that anyone can understand.
Product example: If you’re doing an online clothing store – be specific in your niche ie. women’s athletic wear.
Service example: If you’re doing a IT consulting business then state your niche or focus i.e. network security. It’s always best to focus on your main offerings.
If you are planning on opening a retail store/restaurant please specify what type it is, i.e. Thai restaurant, a used bookstore etc. and where the location is.
Product/Service Listings - List the products or services people will be paying for
It should be clear exactly what people will be purchasing from you. Think of this in terms of packaging up your offerings into no more than 3 or 4 categories. Consider these your ‘units of sale’.
Product example: If you are importing men’s clothing focus on your top 3 or 4 sellers by category i.e. pants, suits, accessories (instead of listing many different products)
Service example: If you’re doing an IT consulting business and your niche is network security then state how you sell your services i.e. on an hourly rate, minimum project amount, retainer fee etc.
Value Proposition - what is the key benefit (keep the benefit short – a long list of benefits actually dilutes your offering)?
Describe the number one thing you think your customers will think is remarkable about your products or services. Rather than selling on price, try to focus on other qualities such as higher quality, shorter delivery times, easier to use, etc. Don’t promise too much, especially if it will be difficult to prove.
Product example: If you are selling dairy-free ice cream and you feel there are many benefits you still need to stay focused on the main one your customer will appreciate most i.e. the taste is just as rich and creamy as dairy ice-cream.
Service example: If you’re opening a restaurant your key benefit could be having popular chef, high-quality ingredients, or a menu that resonates with a specific niche clientele.
1.4 Management (this refers only to the owners)
In section we are looking at what experience (formal or informal), contacts, credibility (relevant to your business) you have in the field to ensure you will be successful. Be sure to explain how each will help with the success for each owner.
List your level of education as it relates to your business idea (degrees, diplomas, certification)
List the level of practical industry experience in the field (be specific name companies worked for, types of projects, even clients where possible)
Do you have contacts in the industry? Explain? For how long?
Any other experience that you believe would be useful to know about you that relates to your business idea?
1.5 Company History (if relevant)
In this section we are looking for how much time, effort and resources you have invested to date on your business idea. Include any money spent, marketing efforts tried, even if things didn’t work out. What stage is your product or service development at? Do you have any sales? Or any customer testing validation?
What have you done to date (include money spent, sales, insights, contacts etc.)
How did this idea come about (only fill this in if you are past the ‘idea stage’)?
In this section you may have a Vision and Mission Statement. However, make sure that the overall focus of the business plan is on how you will get the business launched and make sales quickly. If applicable, show any photos of your products, floor plans, website page etc. in the Appendix section (page 10). Images help paint a vivid picture.
1.6 Legal Structure of the Company
Describe the legal structure of the company
Sole Proprietorship
Partnership
Incorporated
List any partners and their share in the company:
YOUR NAME: % SHARE ______
PARTNER 2: % SHARE ______
PARTNER 3: % SHARE_______
Market Research
2.1 Local Market
Tell us something about how this market works? Who is currently serving this market in the local area you want to serve? For example, if you have a dairy-free ice cream product who are the immediate competitors and alternative products that customers can find (including regular ice cream in local shops and online)? Remember that any new product/service has alternatives. If you are an online business you will still start with a local market (i.e. the whole world is not your market). You can expand your market in the future.
What gap will you be tapping into? This should tie into your Value Proposition. How does your product/service fit in with the market you described above? For example, there may be some dairy-free ice cream selections in the market but none that are as rich and tasty as your product. Re-emphasize the Value Proposition you stated in the Company Profile.
What are the best practices in terms of marketing (how do other companies in your marketplace acquire clients in the early stages)?
What are the key challenges you forsee? Please address any COVID-19 related issues and how they affect your business.
SWOT Analysis
List 3-5 companies that are slightly ahead of you (1 - 3 years) that you aspire to, admire or see as competitors. For each company list (list a specific company by name)
Strengths: what do you observe as their key strengths
Weakness: what do you observe as their key weakness – avoid personal judgments
Opportunities: what is this company doing that YOUR company can do better or differently (doesn’t mean you will do them)
Threats: What can this company change about themselves to make it more difficult for you (doesn’t mean they will do them)
Make sure you do a SWOT Analysis on your own company
Company Name:
Strengths:
Weaknesses:
Opportunities:
Threats:
Company Name:
Strengths:
Weaknesses:
Opportunities:
Threats:
Company Name:
Strengths:
Weaknesses:
Opportunities:
Threats:
YOUR Company:
Strengths: Your key strengths
Weaknesses: Your key weaknesses
Opportunities: Area you want to focus on (tie it to your V.P.)
Threats: Potential threat in the industry (i.e. saturation of dairy-free ice creams)
Best Customer
Who is your best customer (target market)? These are people who will pay for your products or services. Be specific – i.e. ‘anyone who wants to buy my product or service’ is a poor answer. It’s also important to be selective with one key distribution channel when you start. Make a choice -- will it be B2B or B2C, direct selling or online? A poor choice is to say you will do everything.
Business to Consumer (B2C): Demographics: Provide a range i.e. women between 28 - 38, who have a degree and make between 40-90 k/yr. Lifestyle (values): What’s important to them? i.e. travel, adventure. Behaviour (triggers to buy) i.e. most likely to buy in early Fall and late Spring. Scope (geographic area) i.e. Greater Hamilton Area.
Business to Business (B2B): Industry type i.e. IT Companies. Min. to max. size of biz (sales or employees) i.e. over 250 k but under 4 M in sales. Decision maker: i.e. Purchasing Manager etc. Scope (geographic area): i.e. S.W. Ontario.
B2C:
Demographics:
Lifestyle (values):
Behaviour (triggers to buy):
Scope (geographic area):
B2B:
Industry type:
Min. to max. size of biz (sales or employees):
Decision maker:
Scope (geographic area):
Marketing / Sales
Pricing
Please list what prices you will charge (on average)?
What’s your rationale?
What do you competitors charge? List company names.
Marketing and Sales Activities
The key here is to have an action plan that will start to generate sales quickly. List you top three marketing activities and the results you foresee in sales. You must be specific (i.e., not social media but a specific app i.e. Facebook). For each marketing activity, state:
what you will do
how often
how much will it cost or how much time will need to be spent (monthly)
what you can expect in terms of interest / sales from that activity (monthly)
For example, if Facebook is one of your marketing activities, then what will you be posting, how often, how much time will it take, and how many likes will you get and of those how many will buy? Most of your energy will be spent getting sales when you launch. This is a critical piece (you are estimating sales metrics for your business). Saying it “depends” and having vague answers is not an option. You need a focus when you start.
Marketing Activity:
Action taken:
How often:
Cost/time:
Interest/sales:
Marketing Activity:
Action taken:
How often:
Cost/time:
Interest/sales:
Marketing Activity:
Action taken:
How often:
Cost/time:
Interest/sales:
Marketing Activity example: Direct sales: small/med size health food stores
Action taken: Visiting store managers/owners with products in person
How Often: 16 stores a month
Cost/time: Samples ($70/mth), devote 20 hrs/week, including follow up
Interest/sales: For each 4 stores visited, 2 stores will be interested. Every 2nd interested store will buy an average case ($125) = 4 new stores/month
You can also list an existing customer base that you have. In the case of retail also list the amount of walk by traffic you believe will come into the store/restaurant.
What is your marketing budget? What will it be for? Be specific?
Goals and Timeline
List three goals (make sure it’s measurable and has a time frame i.e. $60,000 in sales by Dec. 1, Launch website by Nov. 15, etc. Having brand awareness is not a goal.)
i.
ii.
iii.
3.4 Sales Forecast Assumptions
A business plan is about the future. You are estimating sales based on assumptions you need to make. The best way to do this is to take the average sale or have at maximum three different products/services that you estimate for. You are providing a clear rationale of your sales in your cash flow – inflow section.
Sales Forecast Assumptions (example)
Peak/slow season: Busy season: Sept – Dec., slow season: July & Aug.
Average dollar amount per sale: $50 per sale
Average duration/or repeat: On average customers will buy the product once a year
Major marketing initiative: Attend major trade show in November (state name of show)
List the first 6 months of sales with a rationale for each month. Always start with the month you believe you’ll get the loan.
This is an example based on a tutoring company:
May – $1,200
Each sale is on average $50 – 24 customers
10 customers will come from the existing database of 150 contacts currently on hand
4 from facebook (see marketing plan – make sure you have it explained there)
10 from coupons - 1,000 coupons disbursed (see marketing plan – with an explanation)
24 customers in total for the month.
June – $1,600
etc.
Your turn:
List the Sales Forecast Assumptions
For each month list the actual month (i.e. April), estimated sales, the marketing activities and the sales expected for each marketing activity (see above for example). Do this for at least 6 months.
Operations
In this section explain your costs, expenses and day-to-day running of the business. This section details all your suppliers, inventory costs, association fees – anything that we will see on your cash flow - outflow section.
4.1 Location Details (if applicable)
Location (for location based businesses only)
What is the exact location you have in mind (state the square footage).
Why do you want to locate there?
What is the rent and the length of the lease?
4.2 Insurance / Regulatory Issues
What permits and legal documents will you need? When will you get them? Do you have insurance? Where and how much will it cost?
4.3 Human Resources / Contractors
If you are hiring contractors/employees who do you have in mind (state role) and how much will you pay them? At what point do you need to do this?
4.4 Process / Production costs
Do you need any inventory? Please list the cost to make them (buy them), shipping and storage fees (on average). What is the average mark-up in your industry? What will yours be? Do you have costs associated with making a sale? What is your process, or flow, once the customer buys from you (to make sure you meet the customer’s expectations)?
4.5 Suppliers
Who are your key suppliers? Why did you select them (this includes individuals or businesses you subcontract your work to)?
4.6 Risk Assessment
Answer each in a short paragraph or a couple of sentences.
Marketing – what will you do if your marketing efforts aren’t working?
What is your plan B?
Operations – what will you do if you cannot deliver what you promised? What is your plan B?
Finance – no matter how much you want this business to succeed there is always a risk it may not work. At what point will you have to close the business? (i.e. the business will need to close down if there is less than $15,000 in sales by the 10th month of business operation).
Finance
Start- Up Costs
Use Futurpreneur’s Cash Flow template found on the Resources page – on the bottom right hand there’s a button for Cash Flow (download it and save it). There is also a video tutorial. Click here:
http://www.futurpreneur.ca/en/resources/operational-and-financial-planning/financial-templates/the-cash-flow-basics/
Fill in the start-up costs – start with the month you believe you will get the loan
The start-up cost sheet will automatically populate the cash flow (with the amount of the loan and figure out the interest and monthly payments)
If applicable fill in past purchases
Two Year Cash Flow
Fill in the cash flow – month- by -month – remember you can delete and/or change certain cells if it doesn’t apply to you
The best way to do this is to ask yourself, “in my first month of operation what can I project in terms of sales?” “What will be most realistic expenses for that month?”
Then do the same process for each and every month (focus on your 1st year)
The video tutorial (in three parts) helps you fill in the cash flow template:
http://www.futurpreneur.ca/en/resources/operational-and-financial-planning/tips-tools/operational-and-financial-planning/cash-flow-template-tutorial/
Cash flow is another word for budgeting. Just because you don’t like to do it – doesn’t mean you can’t do it! Cash flow management comes with being an entrepreneur.
Appendix (at the back of the Business Plan)
Show photos of your products (few key ones), floor plans, detailed surveys etc here.
Executive Summary (at the beginning of the Business Plan)
But done last. Write five short paragraphs summarizing each section.
Tips
Write in the 3rd person (don’t use “I will…” instead write “ABC company will…”).
Focus on how your business idea will work not why you think it’s a great idea.
Keep your writing concise and to the point. Avoid jargon.
Never use the word, ‘it depends’. The business plan is about the future. Make assumptions, take action and estimate what will most likely happen on the actions you take. Use averages with complex scenarios.
The business plan is a work-in-progress. It will never be perfect. Chip away at it!
