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Starting a Business! Part 2

Updated: Jan 22, 2020

So before we get to the business plan aspect of starting your business we really should talk about the essential elements that will constitute a good business plan. Given below is an outline of these elements, which should be present in any good business plan.

- Executive Summary

- Market Analysis

- Company Description

- Organization & Management

- Marketing & Sales Management

- Service or product Line

- Funding Request

The Executive Summary

Perhaps the most important part of the business plan is the Executive Summary which gives an overall view of the whole plan. This section provides a history of your company and delineates the present position of the company and the projected stage where you want to take it. The most significant part of this section should deal with the reasons why it is envisaged that this business idea will succeed.

Contents of the Executive Summary

  • The Mission Statement:

This statement should explain the ultimate goal of the business and a brief layout of the path to be followed to reach there. The length of this statement is not important as long as the idea is conveyed clearly and emphatically.

The starting date of the business

  • The names of those who had established the business and their present functions

  • Number of employees

  • Location of business and any branches or subsidiaries

  • Description of plant or facilities

  • Details of items manufactured/services rendered

  • Relationships with bankers and detailed information about current investors

  • A brief history of the growth of the company including financial or market highlights

  • Brief details about the future plans of the management

Except for the mission statement, the rest of the information contained in the Executive summary should be shown in a short fashion. Bullets could be used to highlight the salient points. Remember that the details have been provided later on in the business plan.

Market Analysis

In this section you have to demonstrate the depth of your knowledge regarding the business that you are going to start. You should also highlight the salient features and conclusions of any marketing research data that you might have undertaken.

The following items should be included in this section:

· Description of the industry and the future prospects
· Pinpointing your marketing objectives and goals

The following Information should be collected for inclusion in this section:

  1. Distinctive traits of the chief/main market that you are aiming at.

  2. Extent and scope of the primary target market.

  3. Your estimate regarding the percentage of the market share that you feel you can achieve and the reasons for the same.

  4. The pricing strategy and the estimated target of the gross margin.

  5. The sources for getting necessary data regarding your target market.

  6. The route that you plan to take to get to your target audience.

  7. Your target customers’ buying cycle

  8. Tendencies and probable changes that may affect your main target market.

  9. Distinguishing trends of your secondary markets.

· Market Tests

While mentioning about the market tests that you might have conducted for your business plan, you should only include and highlight the results of the tests.

· Lead Times

The time taken for a product or service to be actually delivered after receipt of the order from the customer is known as the lead-time.

· Competitive Analysis

For undertaking a competitive analysis, you should do the following: your competitor should be identified through the product line and service that it provides and the market segment that it commands; you should appraise their strong and weak points; you should also find out the importance of your target market in the eyes of your competitors, and last but not the least you must foresee any stumbling blocks in your path as you are stepping into the market. You must be aware that your competitors’ strengths might be in many shapes and sizes.

Some of the most common strengths are:

  1. Proficiency in fulfilling the needs of the customers

  2. Having a major portion of the market and its resultant consumer awareness

  3. Past accomplishments and standing

  4. Stable fiscal resources and the stamina that comes with it

  5. Principal personnel

As weaknesses are merely the opposites of strengths, you have to evaluate the same areas that you analyzed before to find the weaknesses of your competitors.

Some of the common weaknesses are:

  1. Inability to fulfill their commitments towards their customers

  2. Having poor market thrust

  3. Having poor past accomplishments and standing

  4. Having insufficient fiscal resources

  5. Inability to hold back useful and competent employee

Since the above weaknesses can spell disaster for any business, you must analyze why such problems affected your competitors so that you don’t fall in the same pit.

More tomorrow...

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