The Small Business Administration says that a business plan has three purposes:
Communication, used to attract investment capital or secure loans.
Management, used to track, monitor and evaluate the progress of your business.
Planning used to identify roadblocks and avoid them by establishing alternatives.
As a business owner, or someone thinking of starting a business, you need a business plan. Once you have it created, you can use it for all three of these important functions.
Many business plans are elaborate and daunting. You know you need it, but where do you start? It can look so overwhelming that you just never do it. I believe that a simple plan is better than no plan! Also, a simple plan can be expanded at any time. To be used correctly, your plan should be considered and updated as your business grows and changes. There is no single â€ścorrectâ€ť way to write your business plan; indeed, it should be unique to your business.
To create your plan, you need to consider the following items:
What is the product or service?
Who are your customers?
How will you reach your customers?
How will you get the financial resources to start your business?
Think about these, and then follow the outline to create your own business plan.
Business Plan Outline
Cover Sheet: A page or two with highlights of your business.
Hint: write this last after all the other parts are completed.
Description of your Company: include items of information such as legal establishment date, history, owner’s information, and location of the business.
Hint: think of this as an introduction, what you want to present about yourself.
Service or Product: a detailed description of what you are selling.
Hint: point out why it is valuable and needed.
Market Analysis: here will be your description of your customers, what their needs are, and how you will reach them in order to sell to them.
Hint: you have valuable experience as a customer yourself; use that to plan for your customers.
Plan and Follow Through: here you will need to drill down to the details. Who will be the management, and what will the duties be? When will it start, and what is the budget. How will you track the results?
Hint: this is the area that will change as your business grows or changes focus.
E-commerce: will your business have a web site? Here is the area to plan for set-up costs, monthly hosting fees, and how to attract customers to your business.
Hint: plan on regular updating of â€ścontentâ€ť, as this will keep your site fresh and bring traffic to your site from the search engines.
Financial Plan: here is where you want to put your best analysis of how your business is going to make money.
Hint: spreadsheets are an easy way to show your projected figures of profit and loss, and cash flow predictions.
The following is a sample of a Hair Salon Business Plan:
Lovely Locks Salon
Description of your Company:
Susie Hairstyler owns lovely Locks. Located at 1111 Main Street, Your Town, State, Zip. The business has been at this location since January 2003. The phone number is XXX-XXX-XXXX. The fax number is XXX-XXX-XXXX. The email address is email@example.com.
Service or Product:
Lovely Locks provides expert service in the following areas:
Manicures and Pedicures
Facials and skin care products
The Lovely Locks customers will primarily be working women, who need to maintain a professional appearance for their employment. We will offer them total body care, from the top of their head, with haircuts and coloring and perms, to their toes, with pedicures.
Plan and Follow Through:
Lovely Locks management will be Susie Hairstylist, and an assistant manager, and a part time bookkeeper.
At our location, hairdressers will lease five stations on a monthly basis. Four stations will be leased on a monthly basis by nail technicians.
Susie Hairstylist has a huge following of customers and will use one station exclusively for her clients.
Lovely Locks projected Profit and Loss:
Beginning investment: $10,000
Monthly income: $7500
Monthly expenses: $3500