Business Plan
Executive Summary
Industry
Summarize the industry:
SIC/NAICS?
Market segmentation:
Industry size, growth rate, trends:
Trends or factors that could affect the business:
Key success factors for the industry and conclusions:
Standard and key financial ratios for the industry:
Company, Concept, and Product
The Company and Concept
Define the company, where it will be based, and when it will begin operations:
Outline of the history of the company and it's founders and it's current status:
Objectives of the company:
Describe the concept of the business, how it will address user's needs:
Product
Fully describe the product, what it is and is not:
Describe what the product does, who will use it, and why:
Describe differences between other products and this product, and what will account for market penetration:
Describe drawbacks of the product:
Describe key factors for the success of the product:
Describe where the product is in it's development:
Discuss what improvements or other products can be developed and how they can be implemented:
Entry and Growth Strategy
How will the company enter the market: Summarize how quickly the business intends to grow over the next 5 years and for growth beyond the initial product: Discuss how the company will stay competitive against others:
Market Research and Analysis
Definition of Relevant Market and Customer Overview
Provide a very specific definition of the relevant market, where the specific customers will come from, and what parameters are being used to define the relevant market:
Discuss who the customers for the product will be:
Provide general demographics for the customer base:
Market Size and Trends
Estimate market size and potential:
Note assumptions that projections are based on:
Estimate the size of the primary and selective demand gaps:
Describe the potential growth rate for 3 years for the product for each major customer group and region:
Discuss major factors affecting market growth and review previous trends in the market:
Buyer Behavior
Why buys what, where, why, when, how:
Who is the actual purchase decision maker, and does anyone else get involved in the buying decision process:
How long is the customer's buying process:
What are the key stages of the customer's buying process and what happens in each stage that might have marketing implications:
Show who and where the major purchasers are for the product in each market segment:
Indicate if this is a high medium or low involvement purchase and draw implications:
Indicate if customers are easily reached and receptive:
Describe customer's purchasing processes including factors influencing purchasing decisions and why they might change current purchasing decisions:
Discuss interviews you have had with users of the product category:
List orders or contracts already placed, list potential customers that have expressed interest and indicate why, list potential customers who have shown no interest and discuss why, explain how you will overcome negative customer reaction, and how quickly the product is believed to be accepted in the market:
List and describe the 5 potentially largest customers and what percentage of sales they will represent:
In what way are customers dissatisfied with current offerings in the market or what emerging customer groups are being ignored:
Market Segmentation and Targeting
Discuss how the defined market can be broken down into segments (groups having common identifiable characteristics, demographics, phychographics, benefits sought, information sources utilized, product usage rate, etc):
Table of segments:
Which segments represent the largest sales potential:
Which segments will be prioritized:
Competition and Competitive Advantages
Identify potential/actual direct and indirect competitors, make a realistic assessment of their strengths and weaknesses, discuss them and figure out why customers buy from them and why they might leave them:
Assess the substitute and/or alternative products and the companies that supply them:
Discuss the current advantages and disadvantages of these products and say why they are not meeting customer needs:
Compare competing and substitute products on the basis of market share, sales, distribution methods, economies of scale, and production. Review the financial position resources, costs, and profitability of the competition and their profit trends:
Compare also important attributes such as quality, price, performance, delivery, timing, service, warranties, and pertinent features of your product with those of competitors:
Indicate any knowledge of competitor's actions or lack of action that could lead you to new or improved products and an advantageous position (for example discuss whether competitors are simply sluggish or non-responsive or asleep at the switch):
Indicate who are the service, pricing, performance, cost, and quality leaders. Discuss why any competitors have entered or dropped out of the market in recent years:
From what you know about your competitor's positions explain why you think they are vulnerable and you can capture a share of their business. Discuss what makes you think it will be easy or difficult to compete with them:
Summarize what it is about your product that will make it saleable in the face of current and potential competition. Mention the fundamental value added by the product:
Discuss which customers could be major purchasers in future years and why:
Based on your assessment of the advantages of your product, the market size and trends, customer, the competition and their products, and the trends of sales in prior years, estimate the share of the market and the sales in units and dollars that you will aquire in each of the next three years. Remember to show assumptions used in your calculations:
Show how the growth of the company sales in units and market share are related to the growth of it's industry and customers and the strengths and weaknesses of competitors. Clearly state the assumptions used to estimate market share and sales:
Ongoing Market Evaluation
Explain how you will continue to evaluate your target markets so as to assess customer needs and service and to guide product improvement programs and new product programs, plan for expansion of your production facility, and guide product pricing. Explain how you make the necessary strategic changes to your plan:
The Economics of The Business
The economic and financial characteristics, including the apparent magnitude and durability of margins and profits generated, need to support the fundamental attractiveness of the opportunity. The underlying operating costs and each conversion cycle of the business, the value chain, and so forth, need to make sense in terms of the opportunity and strategies planned.
Revenue Sources and Gross and Operating Margins
Summarize the major revenue sources of the business and proportionately where you expect to make your money:
Describe the size of the gross margins (selling price less costs of goods sold) and the operating margins for each product you are selling in the market niche you plan to attach. Where you have multiple products calculate weighted average margins. Include results of you contribution analysis: