how to write a business plan
Post on 21-Sep-2014
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DESCRIPTION
If you want investors for your new business, you need to write a business plan that professionally and memorably outlines your vision, finances and team. This business plan guide includes samples of break-even analysis, profits/losses analysis, and cash-flow analysis, as well as tips to convince any investor of your startup's ability to differentiate and succeed in your sector. Learn all the right questions to answer to create a persuasive business plan. By Jennifer RigginsTRANSCRIPT
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How to Write a Better Business Plan
KNOW ALL THE RIGHT QUESTIONS TO ANSWER
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7 out of 10 businesses fail
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Will yours be next?
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YOUR BUSINESS PLAN WILL PLAY A HUGE PART IN
DECIDING YOUR COMPANY’S SUCCESS
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7 Questions to Answer Before You Begin• Why are we starting this business?
• How does our company differentiate ourselves?
• What solutions do we provide? How?
• Who are we? What makes our team reliable? Unique?
• Who are our customers?
• How are we going to fund our business? How much money do we need? What do we need to break even?
• How can we make a profit in one year? In five years?
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8 Business Plan Pieces to Keep You on the Right Track
1. Executive Summary
2. Mission Statement
3. Product / Service
4. Marketing Plan
5. Operational Plan
6. Management Organization
7. Fiscal Planning
8. Addendum
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1. Executive SummaryIntroduce your Vision, answering:
What sector are you in?
What products / services do you provide?
Who is your target audience?
What does the future of your industry look like?
How is your company scaleable?
What are the next steps?
Who are the owners? Background? Experience in your sector / business?
What motivated you to start your company? Why now?
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2. Mission Statement
Who are you?
What are your Benefits?
What are your Goals & Objectives?
In brief, describe where your industry is today, how your company fits into it, and how you offer a solution.
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3. Products / ServicesStart with Sales:
Production price? Market price?
Is there packaging?
How will the client purchase the product?
What billing system will you use?
Are there extra costs in reaching the customer Transport?
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Use an Online Business Plan like PandaDoc to create a
Visual Catalog of your Product / Service.
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Again, in Products / Services, clarify:
What makes our business different?
What gives your product / service an edge in the marketplace?
What distinguishes you from your competition?
What differentiates us?
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4. Marketing Plan
Now, show how you’re different to your customers.
Your Customers
Your Competition
Your Niche
Your Distribution
Your Advertising
Your Sales Strategy
Your Face
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Break down the day-to-day of your business:
Location / logistics of your business
Transportation (if you’re selling a product)
Legal—do you need a permit? license? to join a union or other professional org?
Inventory—if you’re selling a product, where will you store it? how upfront must you supply?
Providers / Suppliers / Freelancers—detailed contact info / pricing of anyone you’re outsourcing to
5. Operational Plan
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Hierarchical chart of how operations flow:
List position / function of each key player:board of directors, advisors, technical specialists, accomplished sales people, accountants, lawyers
Add photos to put smiling faces with names
Get creative, presenting a fun, close-knit team with candid group shots
Include plans for expansion
6. Management Organization
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Without proper capitalization & financial planning, even the greatest business idea is at high risk to fail.
Potential investors are spending the most time fine-tooth combing your fiscal plan, which should include:
• Cash-flow analysis
• Profits & losses analysis
• Break-even analysis
7. Fiscal Planning
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PandaDoc’s free Business Plan Template includes Excel Templates and Examples of
each financial analysis. !
https://www.pandadoc.com/free-business-plan-template
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Cash-flow
Analysis
Present Value of Cash Flows: The sum of all cash flows discounted back one period, using company’s annual rate of return.
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Cash Received, Expenditures, Net Cash Flow: Cash Received is a section where someone would record all the Cash Inflow from different activities like operating or financial. Cash outflows are recorded in Expenditures.
Cash-flow
Analysis
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Formulas: Gross Profit = Revenue – Cost of production GP Margin = Gross Profit / Revenue Profit before taxes = Gross Profit + Other Income – Other Expenses Profit loss after tax = Profit before tax Net profit margin = Profit after tax / Revenue
Profits / L
osses Analysis
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Formulas: Contribution Margin per unit = Price per unit - Variable Cost per Unit Average CM per Unit = CM per Product 1 * Sales Mix % Product 1 + CM per Product 2 * Sales Mix % Product 2 + … Break-Even number of Units to Sell = Fixed Costs / Average CM per Unit. *This is the total number of all products, to find how many units of each product you need to sell: B-E units of Product 1 = (Fixed Cost / Average CM per Unit) * Sales Mix of Product 1 Product Sales in $ = B-E units of Product 1 * Price
Break-even A
nalysis
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Keep your answers: Clear, Concise, Strategic, Realistic
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A Business Plan can be long and boring. Without cutting anything important out, keep everything clear and simple.
Afraid you’ll forget something? That’s what the Addendum is for. Anything outside the first seven sections, you can push to the back.
Include CVs / Resumes, references, press, patents, designs, proof of your awesomeness.
8. Addendum
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NOW IT’S TIME TO PERFECT YOUR BUSINESS PLAN
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Ask yourself, if my Business Plan sits among a stack on the
desk of a potential investor, how will it stand out?
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Use a free Business Plan Template like from PandaDoc to organize yourself from the start, so you can spend more time on the details.
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Finally, read your business plan out loud to honest
friends. Twice. !
What am I missing? !
What can I cut?
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Build your Business Plan through an app like PandaDoc that lets you lay it out memorably.
Know exactly when your investor opens your business plan, which sections they are spending the most time looking at, and if they comment on it.
Easily update to reflect investor feedback, tracking versions all the way.
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