Skyrocketbpo teamed up with the University of Michigan to collect and assess research on the benefits of business planning. The following is what they discovered:
- Businesses with a business plan grow 25% faster than those without one.
- Owners who have a business plan are thrice as likely to grow, get investors, or acquire loans as those who don’t.
- Entrepreneurs with a plan have a 87 percent higher probability of progressing through the startup stage and a 46 percent higher chance of moving from “concept” to “new business.”
Top Sections to Include in a Business Plan
Despite the fact that it appears first in the plan, the executive summary should be written last in order to distill significant ideas from the other nine components.
What is executive summary?
The executive summary condenses all of your company’s critical facts into a little amount of space, generally one page or less. It gives a high-level overview of everything and lays out the remainder of your plan. It’s a high-level overview of your firm in a nutshell.
What is the best way to write an executive summary?
The value proposition, or unique selling point, is basically an extended credo geared at customers, investors, and employees, according to the executive summary.
You may use either a “problem, solution” or a “fill-in-the-blanks” framework:
- [target customers] Who are dissatisfied with [current solutions].
- Our [product or service] addresses [key customer issues].
- In compared to [competing products], we have [distinctive essential traits].
- That framework isn’t meant to be rigid; rather, it’s meant to serve as a beginning point.
Sample Executive Summary
According to market studies, an increasing number of wealthy Michigan residents are interested in sustainable landscape architecture. High-end enterprises, on the other hand, are scarce in the area. At the time, just two exist, and none of them focuses on eco-friendly planning or is recognized by environmental organizations.
John’s Landscapers caters to clientele with rich lifestyles, large yards, and a love for the outdoors by providing a premium, long-term service.
Your company description has three aspects in a business plan: (1) a mission statement, (2) a history, and (3) goals.
Your company’s mission statement explains why it exists. It’s not just about what you do or what you sell; it’s about why you do it in the first place. Mission statements that are both inspiring and expressive are crucial. They should be rallying cries that center around the heart and soul of your organization.
In every area of your plan, less is more. This sentiment is encapsulated in your mission statement. Consider what motivates you, the events and circumstances that led to your company’s formation, the issues you address, the bigger social issues you care about, and so on.
Company’s Basic Info
- When was the company founded?
- Important milestones
- Executive leadership positions (number of workers)
- Products or services that are considered flagships
Business objectives act as a compass. These goals must be SMART goals, which stand for specific, measurable, achievable, realistic, and time-bound goals. They must, on the other hand, be related to significant consequences. When your objectives aren’t clearly communicated, it’s tough for employees and team members to cooperate toward a common purpose. Worse, investors will be turned off by ambiguous goals. They will also have no financial benefit to your business.
Company Description Sample
Emma’s Gardeners’ mission is to assist you in creating the outdoor living space of your dreams while also improving the appearance of our city via sustainable landscaping.
Emma has a combined 25 years of experience, launched our landscape architecture practice in 2015. Our four employees work in two-person teams to complete ten projects for some of Richmond’s most influential business and community leaders.
Our objectives over the next three years are to:
Develop a good reputation as a customer-focused organization that regularly exceeds client expectations while also being environmentally conscious.
Complete 18 projects in the first year, 24 in the second year, and 36 in the third year, all of which were generated by word of mouth, referrals, and home displays.
Increase revenue from $8.5 million in FY2019 to $12.8 million in FY2021, based on 17 completed projects in the preceding nine months.
The next step is to identify your ideal prospective customer as well as the present and potential size of your market. Personas, or target markets, are groupings of individuals who share qualities such as:
Detail-oriented behavior demonstrates expertise and builds confidence. If your target market is too vast, it may be a red signal for investors. Selecting “anyone with a garden” as your target market may not be a smart choice if your product is perfect for people who have the financial resources to hire landscape architects.
When determining the size and monetary value of your market research, the same principle applies. Drill down into your company’s addressable market, which includes local statistics or numbers that apply the grand total to your specific sectors, as well as huge numbers that cover the whole market.
Industry Analysis Sample
Emma’s Gardeners’ target client is a well-to-do baby boomer or Gen Xer between the ages of 35 who has a lot of money to spend. He or she is a homeowner, generally a woman. They’re either employed or just retired. They adore the outdoors and want to enjoy the beauty and peace of nature in their own backyard, but lack the time or expertise to do so.
According to market analysis, Emma’s Landscapers has never had a greater opportunity:
- Landscape services revenue in the United States climbed from $35.8 billion in 2013 to $100 billion in 2019. (1)
- Designing and construction is the second-fastest-growing service offering among landscape firms (2)
- Furthermore, landscape design and construction is the most popular “new service” that current businesses want to provide in the next year (3)
Michigan’s top indicators of interest in green, eco-friendly, and sustainable landscaping have all increased tremendously during the last five years:
- The number of people searching for these terms on the internet has climbed by 87 percent.
- A total of 13 new community organizations have been formed.
- 65 high-profile initiatives have been reported by the local media.
- Furthermore, 13% of Richmond residents reported a household income of $600,000 or more (compared to the US average of 8 percent.)
The first stage in doing competitive research is to identify other firms that sell in the industry you wish to enter. Setting aside enough time to investigate every conceivable competitor may seem onerous, but it might be quite advantageous.
Answer the following questions once you’ve identified your most notable competitors:
- What do they do with their ad dollars?
- What kind of coverage do they receive in the media?
- What is the level of customer service that they provide?
- What pricing and sales techniques do they employ?
- What are their third-party rating sites’ ratings?
While visiting your rivals’ websites, look at their “About Us” page, as well as their mission and values statement. Setting yourself apart from the competition is one of the most critical components of your business plan if you’re presenting a presentation to a group of investors. If you haven’t done your homework, those investors will see right through you.
Spend some time thinking about what makes you special. Prepare to explain how your firm will reduce customer pain points if your idea is really unique. If your business doesn’t have any direct rivals, seek for companies that provide a similar product or service.
To include into your plan, create a table or spreadsheet with a list of your competitors. As is typical, your organization should be named last, on the right. This is also known as a competitor analysis table.
Competitive Analysis Sample
In Michigan’s house landscaping sector, there are just two high-end architectural competitors: (1) Alma John and (2) Alfred’s Landscape Design. The rest of the organizations are either industrial or residential maintenance specialists.
- The average cost of a project is $12,000.
- The cost of continued maintenance is $200 per month.
- Based on 163 reviews, Google My Company has a 3.1-star rating.
- Environmental certifications are not available.
- The most prevalent marketing channel is Google Ads.
Alfred’s Landscape Design
- The typical project costs $35,000 to complete.
- The cost of continued maintenance is $500 per month.
- Based on 57 reviews, Google My Business has a 3.7-star rating.
- Environmental certifications are not available.
- The principal marketing vehicles are home shows.
Product & Service
This section summarizes the benefits, production techniques, and longevity of your items or services. And how your company’s services are better than your competitors’.
When describing advantages, keep the following in mind:
- Characteristics that are one-of-a-kind
- Converting characteristics into benefits
- Emotional and practical remuneration for your customers
- Any patents or intellectual property rights that protect the uniqueness of a product
To learn more about the manufacturing process, answer the following questions:
- Create new and current goods or services
- Get your hands on some raw materials or pieces.
- Assemble them using traditional production techniques.
- Maintain a high level of quality assurance and control.
- Bring them in and hand them over (supply-chain logistics)
- Organize your daily routines: Inventory management and bookkeeping
Include map characteristics such as: in the product life cycle section:
- Interval between purchases
- There are possibilities for upsells, cross-sells, and downsells.
- Plans for future research and development
Product & Service
Three key elements distinguish Laura’s Landscapers’ service—our competitive edge.
First, Laura and Raquel Smith have worked for and with Richmond’s three largest industrial-landscaping businesses throughout their careers. This allows us exclusive access to the residents who are most likely to make use of our services.
Second, the Richmond Homeowners Association, the National Preservation Society, and Business Leaders for Greener Richmond have all designated us as “green.”
Third, seven of our ten completed projects (from 2018 and 2019) have received a 5-star rating on Google My Business, and our pricing points for those projects are in the center of our two main rivals.
- The average project cost is $20,000.
- The monthly maintenance price is $250.
- Google My Business has a 5-star rating based on 7 reviews.
- Three environmental certifications are available (see Appendix)
- Word-of-mouth, recommendations, and house shows are the main marketing vehicles.
Your marketing strategy or plan might be the difference between your company expanding quickly or not getting any business at all. Growth strategies are an important part of every company strategy here.
You should briefly restate key points such as:
- Proposition of value
- Target markets that are ideal
- Customer segments that already exist
Then, add your:
- You should start a plan to acquire new customers
- Expansion plans for existing businesses
- Retention tactics include customer loyalty and referral schemes
- Search engines, social media, print, television, YouTube, word-of-mouth, and other forms of advertising and marketing
This section of your business plan may also be utilized to highlight your advantages and how you differ from your competition. Make sure to show what you’ve done before, what you aim to do with your present resources, and what you want to accomplish as a result of your efforts.
Marketing Plan Sample
Emma’s Landscapers’ marketing and sales strategy will be based on the following factors, in order of importance:
- Marketing through word-of-mouth
- Reviews and ratings
- AdWords for Local Businesses on Google
- Social media shows
The most significant purchasing influencer in high-end landscape design is reputation. As a consequence, we’ll continue to concentrate on channels 1-4. Our social media strategy will include design process videos on YouTube, Instagram accounts, and Pinterest boards with professional imagery. Finally, as part of our direct mail campaign, carbon-neutral glossy booklets will be mailed to wealthy towns.
If you’re just starting started, your company may not have financial data, financial statements, or thorough reporting. However, you’ll still need to create a budget and a financial plan.
If you’re seeking for investors and your company has been around for a long, be sure to provide the following information:
- Statements of profit and loss
- Profit and loss statements
- Cash flow statements
- Financial Position Statements
Other figures that can be included are:
- How much of your revenue you retain as your net income
- Your ratio of liquidity to debt repayment ability
- How often you collect on your invoices
If feasible, include statistics for at least three years. Create sure your math is right, and don’t make any profit or loss projections until you’ve gone through your prior financial records completely for reasons.
Many business owners fail to account for all expenses when choosing sale pricing since costs, profit margins, and selling prices are all linked. This is a particularly hazardous misstep for novice business owners. The pricing of your product or service must reflect all of your expenses, including overhead. You won’t be able to estimate a selling price that will give you the profit you seek if you don’t.
Cost underestimate may catch you off guard and eat away at your business over time. The majority of insurance premiums rise every year, and this is especially true for business insurance. If an employee is injured, Laura’s Landscapers’ workers’ compensation insurance will increase to cover this risk.
In order to submit a suitable finance request, you must first estimate how much money your small business needs. Make every attempt to remain as grounded as possible. You may build a range of numbers if you don’t want to identify a certain number. However, provide both a best-case and worst-case scenario.
Because a new company has no track record of profitability, it’s likely that you’ll sell stock to raise capital in the early stages. You’re basically selling a portion of your company when you sell shares to raise money. Even if an equity owner does not control a majority share of the company, they might expect to have a voice in corporate decisions.
The bulk of stock transactions in small businesses are done privately. The investor may also expect a dividend, which is a percentage of the company’s earnings and would want to know how to sell their stock. You can also get money by borrowing it, but you’ll have to pay back creditors both the principal and the interest on the loan.
When you look at the capital structure of a significant corporation, you’ll see that most of the issues are both stock and debt. Consider if you’re willing to accept the trade-off of losing complete control and revenues while developing your business strategy before selling your company’s ownership.
You should also make a schedule so that potential investors know what to expect. Some customers may wait up to 30 days to pay, forcing the company to have a cash balance.
Investing his own money in the firm, acquiring a bank line of credit (LOC), or applying for QuickBooks Capital are all options for the entrepreneur. If they get funds via a LOC or another sort of loan, it must be repaid as soon as possible in order to avoid debt interest costs.
Your business is only as good as the individuals in charge of it. Identify your team members and explain why they are competent to either bring your business idea to life or assist it to grow. This section of your business plan should emphasize your management team’s superstars. Emphasize your expertise and qualifications throughout the paper.
Include the tasks you still need to do in order to grow your company, as well as the cost of hiring professionals. In order to make informed business decisions, you may need to budget for a CPA and an attorney. CPAs can help you prepare your annual tax return as well as evaluate and prepare your monthly accounting activities. An attorney may assist with client agreements, investor contracts (such as shareholder agreements), and other legal issues that arise.
Request suggestions (along with their prices) from your business contacts, and include those costs into your business plan.
Make a list of all the appendices you’ll need for official documents
Finally, create a well-organized appendix with everything that (1) investors will need for due diligence and (2) you or your employees will need to proceed. The following are examples of this:
- Legal documents include deeds, municipal permits, and legal paperwork.
- Professional licenses and company registrations that are applicable to your legal structure or business type
- Patents and intellectual property
- In the industry, there are a variety of associations and affiliations.
- States and the federal government both provide identification numbers or codes.
- Purchase orders and contracts with major customers