Sample Business Plan Outline
Sample Business Plan Outline
A Sample Business Plan Outline will help you get started writing your own. This example is for an Information Publishing company. Pay special attention to the Risk Analysis area because it practically sums up why you really need to plan for your business. The next outline includes explanations about how each item on the plan should be approached.
The Plan For Information Publishing Company
1. Executive Summary:
This is probably the last thing you should write for your business plan because after analyzing and writing the next sections, you’ll have a much better idea of what your business will be about. It is one of the most important concepts to understand and clearly define. It should be:
Effective in summarizing all what your business is about.
Interesting to read and clearly describes the business opportunity.
Example for Executive Summary:
The information industry shows strong growth rates and many opportunities. For the United States and Canada where the company operates, the information industry expects significant growth rates to persist in the near future, so that investments in that segment are very profitable.
The goal of this start-up is the operation of an information provider company for information and information contents. In addition to this core business, the company offers a selection of consulting services, customized information and further services for their customers, which will help to increase sales revenues and utilize personnel capacity.
Business Opportunity The information industry shows a constant positive demand, but it is necessary to develop new business strategies and solutions to get market shares and survive in this highly competitive industry.
The choice of services, as well as the development of new products, can be one strategy in this field of business. Additionally, sound cost management is of critical importance for a solid stream of revenues. The operation of an information provider company that offers different information is the core of this start-up.
The following products and services are the main sales components: Customer Information Product Information Market Information A strong focus of this business will be placed on the selection of new products for the customers that deliver a significant value. As an add-on, a broad range of customized services will be offered, which will help utilize company and employee capacity.
Research and Development
The range of products and services is selected to provide solid growth potentials. This depends on customer demand and profitability. One central goal of the proposed business strategy is the development of a unique corporate identity. Such identity will create customer loyalty and help gain a competitive advantage.
Therefore, it is planned that, in addition to the selection of new and interesting services, a company design is developed. For this reason, the service around the offered services and the additional businesses is very extensive.
The business will operate in the information service industry with a large number of information products. An additional source of revenues is the sale of customized information products and services. Cross selling is planned to be one of the prime strategies in this business, since all products are targeted to serve a similar need and can easily be combined.
Synergy in selling product across business segments is likely to boost earning further. Net earnings are expected to be at least 1% above traditional trading businesses with only one or two sales segments.
2. Business Description:
Here you should clearly present what your business opportunity, idea, concept, problem-solver is all about. Describe what your business does to tap into the opportunity, or how does it solve a problem. In addition, clearly describe the product or service (value proposition) that will meet its demand, solve its problem or test a concept or idea better or in a different way than do other similar products currently on the market.
In other words, how does your offering differentiates from competitors and, why it should be pursued as one that meets something missing on the market. Describe your product or service focusing more on benefits than features.
Describe the business concept and why it represents an opportunity.
Describe why is it likely to be profitable?
Describe the legal structure and legal name; trademarks or copyrights if applicable.
Describe what you will require financially to get started and to operate for at least 6 months.
Example for Business Description:
The goal of this start-up is the operation of an information provider company. The following information will especially be traded: Market information Financial information Information about individuals Information about companies Combined information Customer demand.
The focus of this business will be on the information segment for national, but also international customers, which shows the highest profits. It is planned to reach an optimal utilization of personnel and company capacity through comprehensive service offerings.
An initial investment amount of at least $50,000 to $60,000 is required, which will allow the operation of an industry business with 4 to 7 employees and the required equipment for the business process. Leasing and rent of computers and inventories will be one element to reduce investment costs.
Sales revenues are expected to range between $450,000 and $600,000 in the start-up phase and the operation is expected to generate profits starting in the second or third business year.
Management is expected to have a solid knowledge of the information business and the offered services to influence the customers. The goal is to create an innovative business in which the customer experiences competent service.
A well chosen and targeted selection of offerings will complement this strategy. Both aspects are core requirements to build customer loyalty. Repeat customers are expected to generate revenues of 70% and more.
Although this strategy is likely to require additional investments, it is expected that revenues per customer will increase significantly and range above industry average. The development and promotion of a corporate identity is another central task for management.
Given the homogeneity of businesses in this industry, the development of a corporate identity will markedly increase sales revenues and build a customer base.
3. Current Biz Position:
As a startup the current position of the business mainly includes the skills and experience you are bringing to the table. For instance, your work experience and other skills or training you’ve gained throughout the years that will contribute to your company and gives it a competitive edge. In the start-up phase, the business is operated as a one-person-business. This set up carries a certain risk potential because of the high equity stake the manager bears and the personal liability assumed. However, this set-up preserves a high degree of flexibility in managerial decision making.
4. Market Analysis: The Industry, Competition, and Market: A careful analysis of the market and competitive forces in this industry is a key element in assessing the business potential of our project. This analysis will provide marketing and sales data that are indispensable to develop the business potential optimally.
The main competitors are comparably-sized medium and large information and consulting companies in the international environment with a similar selection of products and services. Since the planned project is of international scope with a single headquarter, the competitive analysis will have to focus on the international and local market.
Despite slowing economic growth and decreasing customer demand, the national and international information industry underwent a relatively favorable development. New and innovative business concepts in the sector still show high growth potentials, while growth rates of traditional businesses in that industry were below average.
Some things to consider here:
Market size. Growth rate (historical growth data). Market profitability (buying power, new products, competition). Distribution channels. Market trends (what drives this market’s demand?) Key success factors (how did other companies in this market succeed? What are they doing right or better?)
Example of key success factors:
One of the key elements of a successful business in the information provider industry is the selection of information that has a high demand and is currently as profitable as possible.
One key element of a profit maximization strategy is to minimize the costs and to increase the sales volume. The following information show the highest demand and the best profitability depending on input costs on the one hand and sales revenues on the other.
For instance, information on business, market, and financial represent great profitability because these are highly sought information. The specific selection of services and applications offered will be monitored constantly and vary according to business needs.
The selection will include low and high priced combinations, as well as new and innovative services. This strategy provides a competitive edge against other companies in the environment and is expected to generate an additional demand and the possibility for a price mark-up.
The specialized way of distribution and offerings are primarily targeting large international companies. A possible segmentation to identify different customer groups is by segmentation of different lines of business. Companies like car manufacturers, telecommunications, and information technology have a high and growing demand for information packages.
Some things to consider here:
Describe your target audience; provide their characteristics whether individuals and/or businesses. You should answer: Who, What, Why, Where, When of your target market (consumer behavior). How large is this market?, how much money do they spend?, what are their buying habits?, and what is the potential for growth?
5. Marketing Plan:
In the start-up phase, it is a central task of the marketing concept to establish name recognition and a unique trade mark. Later on, the strategy will primarily be targeted to gain new customers and create customer loyalty of repeat customers. Web and e-mail marketing is used frequently in the trading industry, although this would be a relatively inexpensive additional effort.
Marketing Objectives: Describe your unique selling proposition (USP) – your product or service’s benefits, such as quality, price, and customer service.
Marketing Opportunity: What are the trends for your industry or type of business? Are there new developments locally or other forces that will impact your business, such as regulations, seasonal factors, and economic issues?
Positioning Strategy: Create an image or identity of your business. How will your customers identify your business? How will your customers picture or visualize your offering?
Competitive advantage: What are you offering that no one else is? What makes you different or better than your competition? Marketing mix strategy: (Product, Price, Place, Promotion) Product: what is your product or service? Price: what is your cost and pricing strategy? Place: where will your product be distributed? Promotion: how will you promote your product to your target audience? What is your mix of marketing media, public relations, and advertising? What will it cost?
6. Financial Plan: Determine Business Startup costs and money already invested (how much has been spent so far and what are the sources?) How much will be spent to get started? How much is available for the first 6 months of operation in case there are not immediate sales?
Prepare Cash flow statements for first two years: Every month for year one, every quarter for year two. Understand and be able to explain financial statements.
Prepare: Income Projection Expense Projection Profit & Loss Balance Sheet Cash Plan Ratio Analysis
7. Risk Analysis:
The risk analysis considers critical factors that may lead to a failure of the business concept. Such factors can involve failures during the implementation phase, as well as during operations.
Such potential factors are ordered according to the probability at which they can arise. Insufficient demand: Behavior of Competition: Over-indebtedness: Macroeconomic Conditions: Location and market: Wrong Business Decisions: Learn more about business plan risk analysis here:
8. Operating Plan:
How will you manufacture or make your product or service? What are the personnel or labor requirements?
Special equipment or key suppliers if applicable. Space requirements (home, office, factory, retail) and associated costs, including renovations. Location description of your location and its key features, including zone qualifications. Operating Equipment, if any. Suppliers and Vendors, if any. Personnel Plan, if any.
Conclusion The information provider segment is one of the most profitable within the industry, while almost any other segment, especially in the local markets, currently lives through a difficult time.
This situation is mostly driven by the competition of larger international companies. A business that successfully survives the current temporary slow down can be certain of increased profitability once the situation rebounds.
The relatively modest investment requirements and running costs (compared to industry businesses) provide a favorable argument, since external funds from banks becomes more difficult given that the risk aversion to finance such ventures has risen.
A company with specific knowledge and innovative ideas has good chances to move into profitable market niches and run a successful business. Market conditions change constantly as do customer demands. This is the chance for businesses with innovative ideas and new offerings to secure a dependable customer basis.
Service is a critical factor that can earn a competitive edge. This is also true for new trends in the industry to better control costs and increase efficiency.
For a successful operation of an information provider, Five factors are critical and central for the business strategy: In the information industry, it is important that the customer experiences comprehensive and competent service. This will secure customer loyalty in a market that is very fast and competitive.
The utilization of personnel capacity is critical for the long-term profitability because of changing margins and the constraints to flexibly reduce personnel. Therefore, the additional selling of services (cross-selling) is a further segment of the business that is integrated in the sale of the whole business process.
A carefully selected assortment of information, as well as the selected choice of new statistical technologies, provides the potential to gain a competitive edge against competitors. Furthermore, a service that aims to give the customer an added value through new services can justify price mark-ups.
A critical factor in the trading industry is quality management. Better quality at lower cost increases customer satisfaction. Deficiencies in service quality can lower demand, while good service quality can help create customer loyalty. Cost management is a critical success factor for businesses in industries where margins are low. Computer aided planning is an integral part of cost management.