What is a Business Plan?

Think of a business plan as a trip you are going on. You are going to a place that is a three hour drive from your home. You have never been to this town and do not know how to get there. So what do you do? You either get out your roadmap or go to Google maps and get driving instructions of which highways to use and what exits to get off. You may even go to Triple A and see if there are any interesting stops along the way. Think of a business plan in this aspect. It is a roadmap to success for your business that lists the short, medium and long-term goals and how you are going to achieve them.

The first part of your roadmap is your starting point. It lists the types of products or services that you are offering to your customers. It also lists who your target market is. For example, you may be thinking of operating a lawn care business in your town. You believe that you can get plenty of business in the town whee you live.

Once you have a defined product or service, then you need to write your vision and mission statements. A vision statement can simple state "to have the best lawn care service in the area" A mission statement would read something like "to make a profit while providing a high quality service to my customers." Along with the vision and the mission statements, you also must list your core values. These can include honesty, integrity and courtesy. These are simple reminders of how you treat your customers in order to stay in business.

You have to know who your customers are going to be. You may know of people who are unable to take care of their lawns because of physical disabilities. Other people may have an active work or life style and do not have the extra time on their hands. You may decide your target markets are the elderly and working families.

Once you have determined who your target market, you must have a plan on how you are going to reach them. There are many ways to reach out to your potential customers. For example, you can place advertisements in your local newspaper and Penny Saver. You can pass around fliers to people in your town. Television and radio advertising can be expensive. However, as you build up a profit, you may want to consider this type of advertising.

Perform a SWOT Analysis of your business. When you know your internal strengths and weaknesses and external opportunities and threats, you can find ways to strengthen your weaknesses and turn threats into opportunities.

Next you have to list your goals and objectives. You have to ask your self these questions: "Where do I want to be in one year?" "Where do I want to be in five years?" "Where do I want to be in ten years?" As a business owner, your goals may be different that another business owner. You may want to reach a base of one hundred customers. Therefore, your short-term goal may be to get ten customers in a month. You have to list the objectives to reach your goal. This may be done through networking with people you know and having them provide you with referrals. The main rule about goals is that they must be realistic and achievable.

Another thing to put in your business plan is the resources that you are going to need to meet your goals and objectives. For example, do you have the skill and capabilities to provide the service for your customers? Also, do you need to hire somebody as your customer base grows? Financing is another resource to consider. Do you need to get a bank loan to support your business?

Include a monthly and yearly budget in your business plan. It costs money to operate a business. By doing the budget, you will know how much you are going to spend on advertising, equipment use and travel expenses. You may also be considering in purchasing additional equipment and this must also be included. For example, you decide to buy several lawn mowers and plan to pay $1,200 total for them. Divide that amount by 12 and you list $100 a month for equipment. By knowing your budget, you can determine how many customers you need and how much to charge for the service in order to break even. There is one thing to mention, many businesses owners do not see a profit for a year or two when they start out. This mostly likely will also be true for you. When you start out, you need to continue working on building your customer base.

Finally, your business plan must be flexible. You may see down the road that you are not meeting your first year's objectives. Since this is a business decision-making tool, you can tell if you have to change advertising techniques or add additional services to stay on the roadmap to success.

Reference:

http://www.sba.gov/smallbusinessplanner/index.html