A business plan clarifies and puts on paper your main business idea and defines your long
term objectives. Michigan is a great place to start a new business and
there are many opportunities. Your business plan will provide a blueprint for running your business and a series of benchmarks to check your progress against. It is also vital for convincing your bank or business support
organization – and possibly key customers and suppliers – to support you.
- The executive summary highlights the most important points. When deciding whether to
back a start-up, bank managers and investors often make provisional judgments
based on the executive summary. It should sum up six areas.
- Your product or service and its advantages.
- Your opportunity in the market.
- Your management team.
- Your track record to date.
- Financial projections.
- Funding requirements and expected returns.
- Explain the background to your business idea, including:
- The length of time you have been developing the business idea in its present
form.
- Work carried out to date.
- Any related experience you have.
- The proposed ownership structure of the business.
- Explain, in plain English, what your product is or what your service
offers. Make it clear how:
- It will stand out as different from other products or services.
- Your customers will gain through buying your product or
service.
- The business can be developed to meet customers’ changing needs in the
future.
- It is important to cover any disadvantages or weak points you feel the
business may have.
- Be frank about these – it actually inspires confidence
- The market. Focus on the segments of the market you plan to target – for
example, local customers or a particular age group.
- Indicate how large each market segment is and whether it is growing or
declining.
- Illustrate the important trends – and the reasons behind them.
- Outline the key characteristics of buyers in each segment, such as age, sex
or income.
- Mention customers you have already lined up and any sales you have already
achieved.
- The competition. What are the competing products and who supplies them?
- List the advantages and disadvantages of all your competitors and their
products.
- Explain why people will leave established competitors and buy from you
instead.
- Show that you understand your competitors’ reaction to losing business and
demonstrate how you will respond to it.
- Unless there is a viable market and you know how you are going to beat the
competition, your business will be vulnerable.
- You must show you have done the market research needed to justify what you
say in the plan.
- Marketing: How will your product or service meet your customers’ specific needs?
How will you position your product?
- Why should they buy from you and not a competitor?
- What’s your unique selling proposition or USP?
- This is the place to show how your price, quality, design features, response
time and after-sales service will compare with competitors.
- Quote minimum order figures, if appropriate.
- How will you promote your product? For example, using
advertising, PR,
direct mail or via email and a website.
- Services and intangible products (such as computer software) require
a different marketing approach – you need to focus on customer service.
- Outline the management skills within your team. People reading the business plan need to be given an idea of why they should
have faith in the management of your start-up operation.
- Define each management role and who will fill it.
- Show your strengths and outline how you will cope with any weaknesses.
- Describe the background and experience of each team member.
- Clarify how you intend to cover the key areas of production, sales,
marketing,
finance and administration.
- Management information systems and procedures should be outlined. For
example, management accounts, sales, stock control and quality control.
- Show how many ‘mentors’ and other supporters you will have access to.
Above is just a general outline in developing a business plan for your
new Michigan Business.
Related Business Startup Resources:
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