{"id":2948,"date":"2023-02-19T23:43:20","date_gmt":"2023-02-19T23:43:20","guid":{"rendered":"https:\/\/www.goodacademic.com\/blog\/questions\/write-your-own-business-plan\/"},"modified":"2023-02-19T23:43:20","modified_gmt":"2023-02-19T23:43:20","slug":"write-your-own-business-plan","status":"publish","type":"questions","link":"https:\/\/www.goodacademic.com\/blog\/questions\/write-your-own-business-plan\/","title":{"rendered":"WRITE YOUR OWN BUSINESS PLAN!!!,"},"content":{"rendered":"
\n Learning Goal: <\/b>I’m working on a business multi-part question and need support to help me learn.<\/p>\n

The Importance of a Business Plan<\/p>\n

A few years ago, a software company surveyed its users to determine how helpful a business<\/p>\n

plan was to success. The results were reviewed by the University of Oregon for validation, and<\/p>\n

seem to point to the improved outcomes for those with business plans:<\/p>\n

\u00ef\u201a\u00b7 Of those who created plans, 64 percent grew their businesses, compared to 43 percent of<\/p>\n

companies that hadn\u00e2\u20ac\u2122t yet finished a plan.<\/p>\n

\u00ef\u201a\u00b7 Those who created plans were more likely to secure a loan or investment capital.<\/p>\n

A Babson College study discovered a written business plan wasn\u00e2\u20ac\u2122t all that important \u00e2\u20ac\u201d unless<\/p>\n

you were trying to raise money. In cases involving raising capital or getting a loan, businesses<\/p>\n

with plans were more likely to get the funding they needed.<\/p>\n

Consider the company Coffee House, Inc. The founders are excited about providing a coffee<\/p>\n

shop for customers using their own brand of coffee. They plan to grind the beans at the coffee<\/p>\n

house to provide fresh coffee, as well as sell some of their product in bulk to customers who<\/p>\n

want to brew at home. They can also sell accessories to help customers make the most of their<\/p>\n

coffee experience, at the shop and at home.<\/p>\n

Coffee House isn\u00e2\u20ac\u2122t sure about how to proceed or measure success. A business plan can take ideas<\/p>\n

from the founders, put them to paper and provide a roadmap to take action.<\/p>\n

Times You\u00e2\u20ac\u2122ll Be Glad You Have a<\/p>\n

Business Plan<\/p>\n

Any business hoping to raise funds, either with the help of loans or through venture capital,<\/p>\n

needs a plan. If you show up at the bank to ask for a loan, all the decision-makers will want to<\/p>\n

see a business plan. Venture capitalists also like to know that you are organized and informed<\/p>\n

and that you have a strategy to help them realize a return on their investment.<\/p>\n

However, you can benefit from a business plan beyond raising money. Even if you aren\u00e2\u20ac\u2122t<\/p>\n

currently looking for funding, you\u00e2\u20ac\u2122ll be glad to have a direction when you are trying to figure out<\/p>\n

what your next step should be. The market analysis section can help you clarify your efforts so<\/p>\n

you focus on just the right thing to find your niche and exploit it.<\/p>\n

A good business description can help you stay on track, while sales strategies can remind you of<\/p>\n

how you plan to increase your revenue. Your business plan is about organizing and planning<\/p>\n

ahead so you have the lay of the land and are ready to build your business in a way that makes<\/p>\n

sense. When you face uncertainty and you aren\u00e2\u20ac\u2122t sure where to go next, your business plan can<\/p>\n

provide you with the guidance you need.<\/p>\n

7 Elements of a Business Plan<\/p>\n

Your well-thought-out business plan lets others know you\u00e2\u20ac\u2122re serious, and that you can handle all<\/p>\n

that running a business entails. It can also give you a solid roadmap to help you navigate the<\/p>\n

tricky waters. The seven components you must have in your business plan include:<\/p>\n

1. Executive Summary<\/p>\n

2. Business Description<\/p>\n

3. Market Analysis<\/p>\n

4. Organization Management<\/p>\n

5. Sales Strategies<\/p>\n

6. Funding Requirements<\/p>\n

7. Financial Projections<\/p>\n

All of these elements can help you as you build your business, in addition to showing lenders and<\/p>\n

potential backers that you have a clear idea of what you are doing.<\/p>\n

1. Executive Summary<\/p>\n

The executive summary is basically the elevator pitch for your business. It distills all the<\/p>\n

important information about your business plan into a relatively short space. It\u00e2\u20ac\u2122s a high-level<\/p>\n

look at everything and should include information that summarizes the other sections of your<\/p>\n

plan.<\/p>\n

One of the best ways to approach writing the executive summary is to finish it last so you can<\/p>\n

include the important ideas from other sections.<\/p>\n

Coffee House, Inc.\u00e2\u20ac\u2122s executive summary focuses on the value proposition of the business. Here\u00e2\u20ac\u2122s<\/p>\n

what they\u00e2\u20ac\u2122ve written into their plan:<\/p>\n

\u00e2\u20ac\u0153Market research indicates that an increasing number of consumers in our city are interested in<\/p>\n

the experience of coffee. However, there isn\u00e2\u20ac\u2122t a viable place for them to meet and learn locally.<\/p>\n

Instead, they only have access to fast coffee. Coffee House, Inc., provides a place for people to<\/p>\n

enjoy fresh-ground beans and truly enjoy their cup.<\/p>\n

\u00e2\u20ac\u0153Coffee House, Inc., provides a hub for a subculture of coffee, offering customers a place to<\/p>\n

purchase their own coffee-grinding supplies in addition to enjoying the modern atmosphere of a<\/p>\n

coffee house.<\/p>\n

\u00e2\u20ac\u0153The founders of Coffee House, Inc., are coffee aficionados with experience in the coffee<\/p>\n

industry and connections to sustainable growing operations. With the experience and expertise<\/p>\n

of the Coffee House team, a missing niche in town can be fulfilled.\u00e2\u20ac\ufffd<\/p>\n

2. Business Description<\/p>\n

This is your chance to describe your company and what it does. Include a look at when the<\/p>\n

business was formed, and your mission statement. These are the things that tell your story and<\/p>\n

allow others to connect to you. It can also serve as your own reminder of why you got started in<\/p>\n

the first place. Turn to this section for motivation if you find yourself losing steam.<\/p>\n

Some of the other questions you can answer in the business description section of your plan<\/p>\n

include:<\/p>\n

\u00ef\u201a\u00b7 What is the business model? (What are your customer base, revenue sources and products?)<\/p>\n

\u00ef\u201a\u00b7 Do you have special business relationships that offer you an advantage?<\/p>\n

\u00ef\u201a\u00b7 Where are you located?<\/p>\n

\u00ef\u201a\u00b7 Who are the principals?<\/p>\n

\u00ef\u201a\u00b7 What is the legal structure?<\/p>\n

\u00ef\u201a\u00b7 What are some of the market opportunities?<\/p>\n

\u00ef\u201a\u00b7 What is your projected growth?<\/p>\n

Answering these questions narrows your focus and shows potential lenders and backers how<\/p>\n

you\u00e2\u20ac\u2122re viewing your venture.<\/p>\n

3. Market Analysis<\/p>\n

This is your chance to look at your competition and the state of the market as a whole. Your<\/p>\n

market analysis is an exercise in seeing where you fit in the market \u00e2\u20ac\u201d and how you are superior<\/p>\n

to the competition.<\/p>\n

As you create your market analysis, you need to make sure to include information on your core<\/p>\n

target market, profiles of your ideal customers and other market research. You can also include<\/p>\n

testimonials if you have them.<\/p>\n

Part of your market analysis should come from looking at the trends in your area and industry.<\/p>\n

Coffee House, Inc., recognizes that there is a wide trend toward \u00e2\u20ac\u0153slow\u00e2\u20ac\ufffd food and the idea of<\/p>\n

experiencing life. On top of that, Coffee House surveyed its city and found no local coffee<\/p>\n

houses that offered fresh-ground beans or high-end accessories for do-it-yourselfers.<\/p>\n

Coffee House can create an ideal customer identity. The ideal customer is a millennial or<\/p>\n

younger member of Gen X. He or she is a professional and interested in experiencing life and<\/p>\n

enjoying pleasures. The ideal customer probably isn\u00e2\u20ac\u2122t wealthy, but is middle class, and has<\/p>\n

enough disposable income to have a hobby like coffee. Coffee House appeals to professionals<\/p>\n

who work (and maybe live) in a downtown area. They meet their friends for a good cup of<\/p>\n

coffee, but also want the ability to make good coffee at home.<\/p>\n

4. Organization and Management<\/p>\n

Use this section of your business plan to show off your team superstars. In fact, there are plenty<\/p>\n

of indications that your management team matters more than your product idea or pitch.<\/p>\n

Venture capitalists want to know you have a competent team that has the grit to stick it out. You<\/p>\n

are more likely to be successful and pivot if needed when you have the right management and<\/p>\n

organization for your company.<\/p>\n

Make sure you highlight the expertise and qualifications of each member of the team in your<\/p>\n

business plan. You want to impress.<\/p>\n

In the case of Coffee House, Inc., the founders emphasize their connections in the world of<\/p>\n

coffee, particularly growers that use sustainable practices. They can get good prices for bulk<\/p>\n

beans that they can brand with their own label. The founders also have experience in making and<\/p>\n

understanding coffee and the business. One of them has an MBA, and can leverage the executive<\/p>\n

ability. Both have worked in marketing departments in the past, and have social media<\/p>\n

experience, so they can highlight their expertise.<\/p>\n

5. Sales Strategies<\/p>\n

How will you raise money with your business and make profits a reality? You answer this<\/p>\n

question with your sales strategy. This section is all about explaining your price strategy and<\/p>\n

describing the relationship between your price point and everything else at the company.<\/p>\n

You should also detail the promotional strategies you\u00e2\u20ac\u2122re using now, along with strategies you<\/p>\n

hope to implement later. This includes your social media efforts and how you use press releases<\/p>\n

and other appearances to help raise your brand awareness and encourage people to buy or sign up<\/p>\n

for your products or services.<\/p>\n

Your sales strategy section should include information on your web development efforts and<\/p>\n

your search engine optimization plan. You want to show that you\u00e2\u20ac\u2122ve thought about this, and<\/p>\n

you\u00e2\u20ac\u2122re ready to implement a plan to ramp up sales.<\/p>\n

Coffee House needs to make sure they utilize word of mouth and geolocation strategies for their<\/p>\n

marketing. Social media is a good start, including making Facebook Live videos of them<\/p>\n

demonstrating products and how to grind beans. They can encourage customers to check in when<\/p>\n

visiting, as well as offer special coupons and promotions that activate when they come to the<\/p>\n

house to encourage sales.<\/p>\n

6. Funding Requirements<\/p>\n

Here\u00e2\u20ac\u2122s where you ask for the amount of money you need. Make sure you are being as realistic as<\/p>\n

possible. You can create a range of numbers if you don\u00e2\u20ac\u2122t want to try to pinpoint an exact number.<\/p>\n

Include information for a best-case scenario and a worst-case scenario. You should also put<\/p>\n

together a timeline so your potential funders have an idea of what to expect.<\/p>\n

It can cost between $200,000 and $500,000 to open a coffee house, and profit margins can be<\/p>\n

between 7 and 25 percent, depending on costs. A well-run coffee house can see revenues of as<\/p>\n

much as $1 million a year by the third year, according to the Chronicle. Some of the things<\/p>\n

Coffee House, Inc., would include in its timeline are getting premises, food handlers\u00e2\u20ac\u2122 permits<\/p>\n

and the proper licenses, arrange for regular supply and get the right insurance. How long these<\/p>\n

items take depend on state and local regulations. No matter your business, get an idea of what<\/p>\n

steps you need to take to make it happen and how long they typically take. Add it all into your<\/p>\n

timeline.<\/p>\n

7. Financial Projections<\/p>\n

Finally, the last section of your business plan should include financial projections. Make sure<\/p>\n

you summarize any successes up to this point. This is especially important if you hope to secure<\/p>\n

funds for expansion of your existing business.<\/p>\n

Your forward-looking projections should be based on information about your revenue growth<\/p>\n

and market trends. You want to be able to use information about what\u00e2\u20ac\u2122s happening, combined<\/p>\n

with your sales strategies, to create realistic projections that let others know when they can<\/p>\n

expect to see returns.<\/p>\n

Even though it can be time-consuming to create a business plan, your efforts will be rewarded.<\/p>\n

The process is valuable for helping you identify potential problems, as well as help you plan<\/p>\n

ahead. You\u00e2\u20ac\u2122ll be more organized and better prepared for success.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Learning Goal: I’m working on a business multi-part question and need support to help me learn. The Importance of a Business Plan A few years ago, a software company surveyed its users to determine how helpful a business plan was to success. The results were reviewed by the University of Oregon for validation, and seem […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[646],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/2948"}],"collection":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/comments?post=2948"}],"version-history":[{"count":0,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/2948\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/media?parent=2948"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/disciplines?post=2948"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/paper_types?post=2948"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/tagged?post=2948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}