By Kristen Winterton
While writing a business plan is commonly referred to in the entrepreneurial world, there is often little clarity in what is expected in the business plan, and what elements are usually found within the pages of a business plan. To help with this, I have compiled a general outline of a business plan, with the details of what to include. The business plan includes: an executive summary, a company description, an industry analysis, a marketing plan, and a financial plan.
A business plan begins with an executive summary. This summary includes a brief overview of who the stakeholders in the business plan are, the nature of the product or service, how the product will be sold, expected financial requirements, and growth expectations for the company. This is meant to be relatively short, and will follow the outline of the rest of the business plan. If there were only one page through which you could convey your business idea, this would be it. The rest of the business plan is an extension of the executive summary.
This is generally followed by a general company description, through which you can thoroughly describe your product or service, who you would like to sell to, your “target market”, organizational type and structure, and the general administration items of your business.
The next section will be the market research portion of the business plan, and is called the industry analysis. Throughout this section, the business idea is constantly reevaluated for viability. The section will have a SWOT analysis which details out the Strengths, Weaknesses, Opportunities, and Threats of this business idea.
Strengths are the established internal factors that will help the business succeed and can include such things as previous experience in the field or connections to necessary resources, among other things. Weaknesses are the internal factors that could cause a business to fail, and could include such things as financial limitations, lack of experiences or knowledge, other resource restraints.
The other two factors are external factors, meaning that they have to do with outside influences; it allows you to think beyond your current status to what could happen in the future. Opportunities are the positive movements that could be made and could include expectations of advancements in technology, decreased governmental regulations, or similar events that a company could take as an opportunity. Threats are the opposite factor, and could include increased regulations, increased competition in the industry, or consumer substitutions for your product in favor of another product, among others.
The marketing plan is developed to state how a product will be introduced to the marketplace. It can be brought to consumers in many ways from social media, to word-of-mouth, to networking, to televised or broadcasted media, or through printed banners, billboards, signs, or fliers, depending upon the unique needs of a business. The marketing plan is developed to outline who will be contacted, the medium through which to contact, how many people will be contacted, and the frequency of contacting.
The final step in the business plan is the financial plan. This section states how the business will be funded, the necessary requirements for funding, and includes preliminary, or pro forma, financials which are the anticipated results of the business. It includes income statements, balance sheets, and statements of cash flow. These financials will include how many units will be sold, anticipated costs and liabilities, anticipated growth based on the availability of customers, and the analysis of the business idea from a purely financial perspective which will allow an investor to see how the business has the capacity to perform. If necessary, a section for appendices may be included at the end, which contains tables, graphs, and charts and which can be referenced in any of the previous sections.
When developed in this manner, a business plan can be coherently and completely compiled, allowing a company to see potential pitfalls and allowing them to proactively develop a viable business. Many failures can be avoided in businesses when the business plans are taken through these various steps, as it takes a multitude of concerns into account. When these mistakes are avoided, the odds of succeeding in business ventures invariably increase.
By Kristen Winterton
Perhaps one of the most difficult aspects of micro-finance is in finding funding. Many different avenues exist for funding, through venture capital funding, angel investors, friends and family, or by using your networks. Correct utilization of networking can be an excellent source of finding funding.
One example of utilizing a network is Effect International. The students who started Effect International are alumni of Utah State University, and are utilizing the friendships and connections made there to make a difference in the world as a whole. Over the course of the last year, the Huntsman Scholars in the School of Business at Utah State University have worked with Effect International to raise money to build a school in India.
This school will be located in the village of Kuan, Madhya Pradesh, India, and is the second school to be built by Effect International. The first school is established and is already serving 120 students, with plans to expand. It seems that there is always more need for education, and the individuals working with Effect International are trying to meet the growing needs.
The location of the school in Kuan is very strategic, as it is a central location for several communities, and will allow students from many villages to attend school. These children currently have very little opportunity for schooling, as the system is very corrupt, and teachers don’t even bother showing up to teach. Effect International works with the communities to build the school, hire teachers, and oversee the operations to ensure that children are educated properly.
In order for Effect International to have the funds to build and operate the schools, they reached out to their established network at Utah State University. One of the co-founders of Effect International is an alumnus of the Huntsman Scholars Program, so current students in the program reached out to help. They set up craft fairs, a princess party, bake sales, developed partnerships with restaurants to receive a portion of proceeds, and created small businesses to raise the money necessary to build the school.
The craft fair was an expo of several businesses, many with international ties, who set up booths in a large center, allowing community members to have a central location to see what the community had to offer. These businesses provided everything from homemade jewelry to belt buckles made from caribao (an animal native to the Philippines) to notebooks with paintings, photographs, and drawings made by novice artists from around the world.
The princess party was an event held for young girls which provided an opportunity for them to dress up as a princess and go to get their hair and nails done, story time, dancing, and encouragement for them to fulfill their dreams. The group had the girls write down their dreams on a slip of paper, and the group then developed a dream tree, as seen in the picture, with all of the dreams hung on the limbs of the trees. The community responded positively, and the event was a great success.
Many small businesses were created, such as a window-washing business, bake sales, and a partnership with local restaurants which allowed the students to advertise attendance at a restaurant in favor of the group raising money for Effect International as a portion of profits.
By reaching out to their network, thousands of dollars of funding was raised for Effect International. Likewise, think of the connections that you may have as you try to find funding. Consider what resources you may have at your disposal which can help you achieve your purpose. CREED is currently raising capital to fund micro enterprises loans in Belize. Click on one of the links to donate.
By Jayme Mendenhall
There are many factors that influence the long-term success of a business venture. If you are thinking about starting up your own business or already have a business of your own, consider the following ideas:
Passion is the number one ingredient in a successful business venture. Passion turns a business into something more for the business owner. A passionate businessman is able to reach not only his client’s pocketbooks, but also their hearts.
A solid business is built on a well-considered, strategic foundation. This foundation is found in the business plan.
The hallmark of success is found in excellent customer relationships.
Quality, reliability, integrity and service are essential values for a successful business.
Products, pricing, and procedures are regularly checked by the owner.
A flexible business is a successful business. Business owners who are able to adapt and change with the industry, technology, and the market are able to survive many market swings and fluxuations.
A good business owner also knows the value of delegation.
If you are in the process of planning your own business venture, take a few minutes to ponder how implementing these ideas at the onset of your business can maximize your bottom line and minimize hassles and headaches down the road. These ideas might seem obvious, but often times it is the obvious that get overlooked. It is easy to get caught up in the busy routine of keeping a business afloat; no one knows that more than a business owner. Use this list to periodically evaluate where you or your team is at and make the necessary course corrections. Now more than ever, America and the world need entrepreneurs who have passion, integrity, and the discipline to keep their values in check while maintaining quality products and services. Let freedom as well as the free market be safeguarded within the small businesses!