Executive Summary
Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
Your executive summary should get the reader’s attention quickly. Tell them about your welding business and how things are going. For example, are you starting a welding business, do you have a welding business that you want to grow, or do you want to sell an established welding business?
Next, give an overview of every part of your plan that comes after this one.
- Give us some information about the welding business.
- Tell people about the kind of welding business you run.
- Detail your direct competitors. Give an overview of the people you’d like to buy from you.
- Give a quick summary of your plan for marketing. Find out who on your team is the most important.
Tell what you want to do with your money.
Company Overview
In your business summary, you will talk about what kind of welding business you run.
For instance, you could focus on one of the following types of welding businesses:
- Aluminum welders can use aluminum to make baseball bats, bicycle frames, and golf clubs, among other things.
- Heavy steel fabrication: This type of welding business makes things like industrial tanks and farm equipment out of thick metals for big jobs.
- Mobile welding is a type of business that does small welding jobs in people’s homes or places of business.
- Manufacturing truck trailers: This kind of welding company makes truck trailers, trailer decks, and trailer bodies.
- Underwater welding: This type of business specializes in welding jobs that require the welder to be submerged in water, like working on dams, pipelines, and nuclear power plants.
In the company overview, you should say what kind of welding business you will run and give some background on the business.
Include answers to questions such as:
- When and why did you start your business?
- What big steps have you taken so far? Some examples of milestones are the number of customers served, the number of projects finished, earning $X in sales, etc.
The law is all about you. Do you have an S-Corp set up for your business? An LLC? A one-person company? Tell us about your justice system.
Industry Analysis
In your industry or market analysis, you need to give an overview of the welding business.
This might seem useless, but there are more than one way to use it.
First, learning about the business of welding gives you information. It helps you understand the market better.
Second, doing market research can help you make a better marketing plan, especially if you look for trends in the market.
The third reason is to prove that you know what you’re talking about. This is what you do by doing your research and putting it in your plan.
In the industry analysis section of your welding business plan, you should answer the following:
- How much money does the business of welding bring in?
- Is the market getting smaller or bigger?
- Who are your biggest market competitors?
- Who are the most important suppliers in the market?
- What kinds of changes are happening in business?
- How do you think the business will grow over the next 5–10 years?
- How large should the market be? That is, how many people could your welding business serve? You can get this number by figuring out how big the market is in the whole country and then applying that number to the people in your area.
Customer Analysis
In the “Customer Analysis” section of your welding business plan, you need to explain who you serve or who you hope to serve.
Different types of customers include people, schools, families, and corporations.
As you might expect, the type of welding business you run will depend a lot on which customer segment(s) you choose. People would react differently to marketing campaigns than, say, corporations.
Try to figure out who your ideal customers are by looking at their demographics and how they think and feel. In terms of demographics, you should talk about the ages, genders, locations, and income levels of the people you want to help.
Psychographic profiles can tell you what your customers want and need. The more you can figure out what these needs are and how to meet them, the easier it will be to get new customers and keep the ones you already have.
Competitive Analysis
In your competitive analysis, you should figure out who your direct competitors are and then focus on them.
There are other welding businesses that are direct competition.
Indirect competitors are other things customers can buy besides your product or service that are not in direct competition with it. This includes businesses that offer different ways to make things, welders who use different methods or materials, and businesses that have their own welders on staff. You could also talk about this kind of competition.
Give an overview of their businesses and a list of their strengths and weaknesses for each of these competitors. Unless you’ve worked for one of your competitors, you don’t know everything about them. But you should be able to find important information about them, like
- What kind of clients do they work with?
- What kind of a business do they run?
- What is the price range (high, low, etc.)?
- What are their strengths?
- What do they not do well?
Try to answer the last two questions from the point of view of your customers. Don’t be afraid to ask customers of your competitors what they like and dislike about them.
The last part of your competitive analysis is to list the ways you are better than your competitors. For example:
- Will you make it easier for people to use or buy your product?
- Will you sell or do things that your rivals don’t?
- Will you give your customers better service?
- Your prices will be better, right?
In this part of your plan, you should think of ways you can do better than your competitors and write them down.
Marketing Plan
A marketing plan usually has four parts: the product, its price, where it will be sold, and how it will be advertised. In your marketing plan for a welding business, you should include the following:
Product: In the “Products” section, you should say again what kind of welding business you talked about in the “About Us” section. Then, describe the goods or services you’ll be selling. Do you, for example, do heavy welding, welding under water, building trailers, or fabricating aluminum?
Price: List your prices and how they compare to those of your competitors. In your plan, the product and price sections are basically where you list the products or services you offer and how much they cost.
Place is where your welding business is located. Write down the location of your business and how it will affect how well it does. For example, is your welding business in a busy shopping area, a business district, a stand-alone building, or does it move around? Talk about why your website might be the best place for your customers.
Promotions: In the last part of your welding marketing plan, you’ll write down how you’ll get potential customers to come to your place of business (s). Here are some ideas for how to promote your business:
- Put ads in local newspapers, magazines, or radio stations.
- Reach out to websites.
- Distribute flyers
- Engage in email marketing
- Put up ads on social media websites
Improve your website’s SEO (search engine optimization) for the keywords you want to rank for.
Operations Plan
You wrote about your goals in other parts of your business plan. In the operations plan, you talk about how you’ll reach those goals. There should be two different parts to your operations plan.
Everyday short-term processesInclude everything you do to run your welding business, like answering phone calls, meeting with clients, sending invoices, collecting payments, etc.
Long-term goals are the steps you’ll want to take to get there. These could be dates like when you expect to get your Xth customer or when you hope to make $X. It could also be when you want to move your welding business to a new location.
Management Team
A strong management team will show how successful your welding business could be. Show the backgrounds of your key players, with a focus on the skills and experiences that prove they can help a company grow.
You or someone on your team should have run a welding business before. If so, talk about what you’ve learned and what you’ve done. But you should also talk about any business experience you have that you think will help your business do well.
If you don’t have a strong enough team, you might want to put together an advisory board. A board of advisors would have between two and eight members. These people could give you advice that would help your business. They would answer questions and give planning tips. If you need to, look for members of your advisory board who have successfully run a welding business or a small welding operation.
Financial Plan
Your 5-year financial plan should include your 5-year financial statement. For the first year, it should be broken down monthly or quarterlyly, and after that, it should be done annually. Your financial statements are made up of your income statement, balance sheet, and cash flow statement..
Income Statement
Most people call an income statement a P&L, which stands for Profit and Loss. It shows how much money you made and how much it cost you, so you can see if you made a profit.
When making your income statement, you have to make some assumptions. For example, will you hire 3 welders, and will each of them work 8 hours a day for $50 an hour? How much will sales increase each year? 2% or 10%? As you might expect, the assumptions you make will have a big impact on your business’s financial projections. Do as much research as you can to try to find facts that support what you think.
Balance Sheet
Balance sheets show you what you own and what you owe. Balance sheets may have a lot of information on them, but try to focus on the most important parts. For example, if you put $50,000 into building up your welding business, you won’t make any money right away. Instead, it’s an asset that you hope will bring in money for years to come. In the same way, you don’t have to pay back a $50,000 check right away if someone gives it to you. You’ll have to pay that back over time instead.
Report of Cash Flow
Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure that you never run out of money. Most business owners and entrepreneurs don’t know that you can make money and still go bankrupt if you run out of cash.
When making your Income Statement and Balance Sheet, be sure to include some of the most important costs of starting or growing a welding business:
- The price of tools and supplies for welding
- Staff pay or salaries Insurance for businesses
- Taxes
When you’re starting a new business, you’ll also have to pay for things like legal fees, permits, software, and equipment.
