Drafting a business plan is an important step in securing outside funding from investors. While some prospective new business owners might find the process difficult, this need not be the case. Here are three components which most business plans should include, in one form or another:The Marketing Plan
The marketing plan should describe the marketing strategy, the marketing mix, target market(s), and customer segmentation in detail. It should explain how the product or service will make use of the 4 P’s of marketing (product, promotion, place, and price) to convert prospective customers into new buyers and users of the firm’s offerings, as well as retain them for the long-term. A good marketing plan is not a static document, but one which may need to be re-worked several times to find a profitable strategy which meets the new business’ goals.
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The Operations Plan
An operations plan should explain how customer needs will actually be met on a day-to-day basis, including the actual creation of the product or service, and its final delivery to the customer. Some business plans may have a relatively short operations section (such as for a manufacturing firm which supplies wholesalers and retailers), however, any differences from standard practice within your industry should be explained in enough detail, so investors know what they might expect, or why you plan to achieve the results set forth in your plan. Firms which are more devoted to manufacturing or other production as the chief part of their operations might include information about quality control initiatives (Six Sigma, Total Quality Management, etc.) which are typical for their business in this section as well.Pro Forma Financial Statements
Pro forma financial statements show the projected financial results a new business expects to achieve, preferably for each of a different set of economic conditions (good, fair, or poor). The statements should include income statements, balance sheets, and cash flow statements, for at least a five-year period into the future. These should also include a detailed break-even analysis, which will explain the returns investors can expect, based on typical rates of return for similar firms in the same industry.
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In short, by including a marketing plan, operations plan, and pro forma financial statements within your business plan (among other elements), it will look more like other typical, readily accepted plans. While this alone is generally not enough to win over investors, it is one of the right steps in doing so.Copyright 2010, by Marc Mays
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