A well-researched business plan is an often-overlooked key to success. Statistics have shown that those who develop and implement a business The documents and links below have examples of business plans,
In addition to providing a game plan for directing and guiding your
business, a business plan can provide a great tool for communicating your
business to potential investors and financial institutions.
plan tend to survive and those who do not, fail.
templates, and planning resources that should be helpful:
A well-researched business plan is an often-overlooked key to success.
Statistics have shown that those who develop and implement a business
The documents and links below have examples of business plans,
What is a business plan?
A business plan is the result of thoroughly investigating your
industry, your market, your product, your financial situation and
your proposed organization. A business plan outline provides an
organized system for researching the feasibility of your
Who should do a business plan?
A business plan should be done by anyone starting a business or
making major changes within their existing business. This could
include adding product lines,, increasing sales, purchasing another
business, or a multitude of other changes within the existing
How do I begin?
Business planning is a process that leads to a product. Your
internal business plan should be in a format that is easy for you
to understand, access, store and retrieve, edit and update. There
are a number of business plan formats, but here are two examples
that we think work well:
Why is a market analysis for my product or service important?
A common mistake is thinking that everyone will want your
product. Those who succeed identify target markets, learn about
their needs and provide the appropriate bundle of goods and
services to meet those needs.
Find out as much as possible about the industry you want to
enter. Is it emerging, growing, stable or declining? What are the
trends? Who buys and what do they buy? When do they buy? What
percentage of the population buys? What is the demographic profile
of each target market?
Where do I find information on my industry?
Virtually any industry you can imagine has a professional
association that gathers data and processes it into useable
information for their membership. Go on-line and search for “(your
Look for an association that provides statistics. Many will
publish trade magazines, newsletters or e-letters. They may also
provide membership or vendor lists, although this information is
usually only available to members. It may be a good idea to become
Apply the national statistics to your local demographics. If 3
percent of the national population uses the product and your local
population is 100,000, then you can expect 3,000 potential
customers. Then consider identifying your target markets. Are there
under-served markets with pent-up demand in your area? You may
create a market niche by supplying the products and services they
can’t find elsewhere. Are there opportunities to sell to government
agencies, clubs and user groups or business to business?
Select those markets that have the greatest potential for
success, as you define it. That may include profit, return on
investment, long-term sustainability or some other valuation you
What about the competition?
First let’s dispel one of the common myths that “I have no
competition.” Even though there may be nobody in your demographic
area providing the same product or service, most competition is for
discretionary dollars. Therefore, you are in competition with
anybody who wants to sell anything.
You need to identify all competitors and analyze their strengths
and weaknesses to determine how you can best compete. Realistically
estimate what percent of the consumer population (market share)
will become your customers, and why. There are only two ways to get
customers in a competitive market: either develop new customers or
take them away from your competitors. Also, study the competition
for ways to become co-operators rather than rivals by buying or
selling from each other.
How do I make a sales projection?
Now that you have found what people are willing to buy, you need
to make a sales forecast. After studying the industry, consumer
profile and the competition, you have enough information to do some
For each of your chosen target markets, estimate your market
share in number of customers. Based on consumer behavior, how often
do they buy per year? What is the average dollar amount of each
purchase? Multiply those three numbers to project sales volume for
each target market.
To get better numbers for your projects try locating a business
similar to yours, in a community like yours, that’s far enough away
so you won’t be considered a competitor, then ask them. Better yet,
go there. Take the owner to lunch. Walk around, observe, take
advantage of good ideas, and avoid the bad. Then go back home and
forecast your sales.
When do I discuss my product and services?
Once you’ve projected sales based on what you think your
customers will buy you’re ready to talk about your product or
service. The projections should help determine the products and
services you will sell. Describe them in some detail. Briefly
summarize your analysis of your competition and your competitive
advantage. You might also want to briefly summarize your pricing
What is a Feasibility Study?
The question remains: is this business financially feasible?
You’ve already projected sales. How much will it cost to achieve
that level of sales? Start with fixed costs like rent, utilities,
insurance and salaries. Then calculate the variable costs of sales
including cost of goods sold, hourly wages, shipping, etc. Subtract
the cost of sales from the sales forecast. This is your gross
Subtract the fixed costs you identified from the gross margin.
If the remainder is less than zero, then the project is not
feasible. If the number is positive, is it large enough to justify
the risk? Starting or growing a business requires financial risk.
If the business idea does not meet your financial requirements,
then invest your money in something that does.
What is an Operation Plan?
An Operation Plan consists of the following sections: First, a
complete set of projected financial statements that includes a cash
flow statement, a profit and loss statement, and a balance sheet.
Next, a schedule of events to guide starting and growing your
business with the financial constraints you identified in your
financial statements. Finally, a management plan and plan
Do I need a Management Plan?
The Management Plan explains who will be responsible for the
various management functions that keep the business running
efficiently. It describes the experience and/or training of each
key manager. Areas that need to be addressed are planning,
organizing, directing and controlling. Include an organizational
chart to visually present your organization.
What is the Plan Summary?
The Plan Summary is a snapshot of your business plan that
enables a lender or investor to quickly grasp your concept, your
customer, your background and funding sources.
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- SBA Business Plan Basics Step by step instructions for creating a business plan from the SBA
- Bizstats.com Access business statistics and benchmarks, useful financial ratios, and effective and understandable online analysis of businesses and industries.
- Bureau of Labor Statistics This public site provides information on consumer expenditures nationally, regionally and by selected metropolitan areas.
- Business Owner’s Toolkit Samples of business plans and other tools.
- Edward Lowe Resource Center Articles with solutions gleaned from CEOs and business owners. Includes perspectives on managing growth in key areas such as communication, finance, marketing and sales, HR management, legal issues/taxes and technology.
- U.S. Census Bureau This public site is a major link to demographic and economic census data.
- U.S. Small Business Administration This is a complex site but you can find information on SBA programs and other resources. Surf the library and you’ll find information to help you in planning your business.
- Washington State Department of Revenue This public site provides information on retail sales within the State of Washington in detail to selected cities by NAIC code. In addition, many tax topics are covered. Be sure to look at the “Statistics & Reports” section.
- Washington State Office of Financial Management This public site provides information on economic, social-economic, population, estimates and forecasts, and city and county data. It also provides links to the United States Census 2000 web site.
- Workforce Explorer While this public site deals primarily with employment, it has great insights as to the general economic conditions of areas within Washington State. Of particular interest are analysis and articles by “Regional Economists”.