Creating a Business Plan – Part 2 – Woodmen Financial Resources

Essentially, a business plan is the management and financial blueprint of your company. It is meant to serve as both your business guide and as a tool to help you attract investors. The plan should be comprehensive yet concise. It should explain the characteristics of your business, as well as discuss how the business will be financed and managed and how it will function in its target market.

There is no limit to the length of a plan, though the average is probably under 50 pages. Your plan should be separated into sections, such as business, marketing, financial, and “supporting documents.” You should also include a cover sheet and an executive summary. Before you begin writing, however, it is probably a good idea to consult an attorney and/or an accountant with experience in business-plan preparation. Following are brief descriptions of the sections generally found in a business plan (check out Part 1 here).

Marketing

The marketing section of your business plan will likely be the most time-consuming, though probably the most influential. In this section you must discuss your target market as well as the larger market environment. Who will purchase your product or service? Why will they choose your company and how will they be informed of it?

As with the business section, begin your marketing section with a summary of the key points you intend to make, then talk about those points in detail in the body of the section. Again, support your discussion. Include any marketing data you’ve collected in the “supporting documents” section. In your marketing section you might discuss the following key points.

Industry trends and your target market

Describe the market research you conducted, the resources used, and the results obtained. Discuss the industry and its trends, especially those that suggest that your product or service will be successful. Then develop a more detailed discussion about your target market. Whom does it encompass? What are its demographics? How will you penetrate and serve this market? Where do the customers within this market live/work/shop? How will you get your product or service to those who need it? Don’t exaggerate. Be reasonable! Support your research and the inferences drawn therefrom with reports from the U.S. Census Bureau, questionnaires, and other marketing test results.

Advertising

Now that you know your target market, you will be prepared to communicate with potential customers and inform them of your product or service. Discern what magazines they read, the television they watch, and the radio stations they listen to. Then gauge the level of advertising your competitors conduct in these various media. Describe within this section, among other things, the methods of advertising chosen, the reasons for your choices, how and when your message will reach your target market, and the cost of all advertising. Again, support your conclusions. Include promotional materials, flyers, and pamphlets.

Competition

There are generally two types of competition: direct and indirect. Direct competition involves competitors that offer the same product or service to the same market that you have targeted. Indirect competition, on the other hand, involves competitors that may offer the same product or service, but that cater to a market different from your target market. You will need to discuss both types of competitors. Further, you should be able to answer certain questions. Where are your competitors located? How do you plan to compete? Can you serve the market better than your direct competitors, and if so, how? How much market share do your competitors have? How much do you intend to acquire? Will you acquire your share of the market from your competitors, or will you tap a hidden portion of the market?