How to Write a Business Plan

Peace Corps WID/GAD Committee

Training Objectives

Explain the importance of business planning Define and describe the components of a business

plan Provide access to sample plans and resources that

can help you develop a very good business plan

Receive a printed Certificate of Completion from the American Small Business Association

Topics to Cover

Why planning is important Components of a business plan

Table of contents Executive summary Business description and vision Definition of a market Description of products and services Organization and management Marketing and sales strategy Financial management Appendices

Business plan template: will be completing during the training

Why is Planning Important?

Suppose you lived in Georgia and you wanted to drive to Turkey, would you use a map? Planning will help shape your destination and gives you a blueprint to follow.

It is a tool for investors, suppliers, employees, and others interested in your business.

If you don’t plan for the success of your business, you will likely fail.

Before you begin writing your plan consider four questions

What service or product does your business provide?

Who are the potential customers for your product or service and why will they purchase it from you?

How will you research your potential customers?

Where will you get the financial resources to start or run your business?

A good business plan is an outline of your business

It explains Who you are Why you are in business What you do, how you do it Where you operate How you will generate profits Who your customers are Why your business is important

What is in a Business Plan?

Table of contents Executive summary Business description and vision Definition of the market Description of Products and Services Organization and Management Marketing and Sales Strategy Financial Management Appendices

Table of Contents

Lists key sections of the business plan Used to assist the reader in locating

specific sections Brings organization and structure to the

business plan

Executive Summary

Most important section of the plan Should be written last Provides an enthusiastic snapshot of

your company, explaining who you are, what you do, and why

Should be less than 2 pages

Business Description & Vision: Mission Statement Brief statement about who the company is and

what is stands for Example:

Google’s mission statement is: “organize the world’s information and make it universally accessible and useful”

Don’t just write down a mission statement think about it and carefully develop a statement that is an expression of your business.

Business Description & Vision: Company Vision Statement about company growth

Outlines what the company wants to be Futuristic: memorable and engaging an

expression of hope and inspiration Should guide the mission, direction, and

plan of the company

Business Description & Vision:

Business goals and objectives Must be specific and attainable. Goals that are not

specific probably will not be achieved

Brief history of business Just history, when why, founders, and how the

company has evolved

List of key company principals Owners of the company

Defining the Market

Important part of business plan. Before you can sell something you must define who

will buy it. [Be specific]

First step: define the industry your business will operate in and how your business will succeed within that industry

Describe your business industry and outlook Example: If you are going to sell bicycles, describe the

general outlook for bicycle sales and the potential for capturing the bicycle market in your town

Defining the Market

Second step: Define specific customer needs that your business will satisfy

Include information about how those needs are or are not being met by current businesses

Example: explain why customers will buy your products and what needs are you satisfying with your products

Defining the Market Third Step

Identify targeted customers who will buy your product or services

Can determine customers by answering several questions Who are current and prospective customers? What do they buy and why? Who is most likely to buy your products? Examine the number of potential customers in the area Where do your customers live? What are the prices for similar product and services in the area

Value of defining market If you do not know who your customers are you cannot reach

them and if cannot reach them you cannot sell your products and services to them.

Description of Products

Identify and describe all products and services your business sells or provides

Identify and explain your prices Describe how your products and services

are competitive**Most important part: must

show why you are in business, what you are doing, and how you are competitive

Organization and Management

Description of how the company is organized Legal ownership Organization chart, leadership of company Explanation of how things are done

Processes for: What you do, How sales are generated, How are products or services are developed,

Required licenses and permits you operate with or need

Bio descriptions of each key company managers

Marketing and Sales Strategy

Marketing is the process of creating customers Way to tell your customers what you are selling Strategies to make products available, satisfy customers,

while making profits for the business Asking people in the community

Whether they can buy your services or goods? Are you offering the kinds of goods or services they want at

the best place, at the best time, and in the right amounts Are your prices consistent with what buyers views as the

products value? How does your business compare with other businesses in

the area

A Marketing Strategy Includes:

Pricing how to set the price and discounts

Promotion advertising

Products what exactly you are offering

Place how does the product get to customers

To reflect the wants and desires of consumers in the target market and what customers want and what they will pay for.

Financial Management Revenue projections, how much money you have and

need, and when and how the business expects to make money

Business must have a: Balance Sheet

Provides a measure of your business’ value Income Statement

Measure of how a business has performed over a certain time period (6 months to 1 year). Measures all income less all expenses to determine profit or loss.

Case Flow Statement On a monthly basis determine how much cash you have at any

point of time. A cash flow statement is valuable to determine if you can pay your bills and to monitor profits

Revenue, expenses, profits, or losses, assets, liabilities and net worth must be recorded

For A New Business You Need

Estimate start-up costs for business Projected balance sheet (1 year into future) Projected income statement (1 year in to

future) Projected cash flow statement (12 months

into future) Seek outside assistance if need help

creating these forms

Appendices

Company Brochures Resumes of Key Employees List of Business Equipment Copies of Press Articles and Advertisements (if

available) Pictures of your Business Location and Products Information about your Industry and your Products Key Business Agreements, such as a Lease,

Contracts, etc.

Next Steps

Prepare a draft business plan. Does not have to be long or complete. Do what you can.

Discuss your draft plan and any questions you have with a business mentor. [Someone in your community you has already opened a business].

Course Completion Certificate Congratulations on completing the

course! You earned a certificate of completion

from the American Small Business Association