As I stated in the part one of this three-part series, following this simple outline below will give you the ability to present your business idea in a professional manner. It is, however, worth noting that, the first step to business planning is determining your target market and why you think they would want to do business with or buy from you.
- Executive Summary
- Company Description
- Definition of the Market
- Organization & Management
- Description of the Products and Services
- Marketing & Sales Strategy
- Funding Request
- Financial Projections/Management
- Executive Summary
The executive summary is considered the most significant section of a business plan. It is this section that information about the location of the company, its future projections and prospects of your business ideas is given. Whether it is a contract or funds you are seeking, the executive summary provides a greater opportunity for you being successful. It should give a good overview of your company, who you are, your products and services, the target market and any other general information.
Constituents of the executive summary
Based on the stage of your business, the following key points should be considered.
- The Mission Statement – This explains what your business is all about in several sentences or even a paragraph. It should indicate the short term and long term aspirations of your organisation. An example is ‘the Ghana Chamber of Commerce and Industry serves as the voice of the business community;
Promotes and protects the interest of members by fostering ethical practices in commerce, trade and services through advocacy, training, education and ensuring adherence to quality.’__ GNCCI
- Company Information – this includes a short statement that covers when the business was established, the names of the founders and their tasks, number of employees, and the location of the business.
- Growth Highlights – Include examples of company growth, such as financial or market highlights (for example, “ABC Firm increased profit margins and market share by 20% year-over-year since its establishment). Graphs and charts representation may add much value to this section.
- Your Products/Services -- Briefly describe the products or services you provide
- Financial Information – when the plan is aimed at soliciting financing, include any information about the business current bank and investors.
- Future plans – Explain where you would like to take your business and your target market.
With the exception of the mission statement, the executive summary should be written in an essay form with coherent presentation of information. You are to give a good overview of your company.
Remember that the executive summary is the last section to be written, though, it is the first part of the complete business plan.
After reading this section, the reader should:
- desire to learn more about your business which means h/she should continue reading the plan
- have a good understanding of your business and how you intend to operate.
- Company/Business Description
In this section you should:
- Explain the business goals and objectives
- Indicate what you plan to accomplish
- Show how the business got started
- List key people that will help you manage your company
- Describe the nature of your business and list the marketplace/target group needs that you are trying to satisfy
- Explain why you think your products and services can meet these needs
- Give an outline of the specific consumers, organizations or businesses that you serve or intend to serve
- Give details as to why you think your business has competitive advantage over others that will make your business a success. Here, elements like your location, efficient operations, or ability to bring value to your customers, expertise, on point delivery and quality of products are important
- Definition of the Market
This section requires that information about your industry and market knowledge as well as any of your research findings and conclusions be provided.
The market analysis should include:
Industry or market description and future outlook – Describe your industry, paying attention to its current size, growth rate, other trends and characteristics. In addition, major customer groups (sales, marketing, and complaints departments) within the company should be provided.
Description of your target market – you should have a clear knowledge about the particular market(s) you intend to sell your products or services to. It is important to have a target market that is manageable in size. Targeting too many target markets would only make you lose focus. Initiating research to get information on distinct characteristics of your target market(s) __ What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal purchasing trends that may impact your business?
You should also consider including information on the annual purchases your market makes in your industry and the estimated market growth for this group.
Describe what share of the market you have or intend to get – indicate the market share percentage and number of customers you expect to obtain in a defined geographical environment. Give reasons to support your claim.
Pricing and gross margin targets – Define your pricingstructure in clear terms not forgetting your gross margin levels, and any concessions that you plan to offer. This may include information gathered from your market analysis research. However, include only the results of the tests. The details should be included in the appendix.
Competitive Analysis – of course, once it is a business venture you are embarking on you must admit that competition is inevitable. You should therefore do a competitive analysis to identify your competition by product line or service and market segment. The following characteristics of the competitive scene should be assessed:
- Market share
- Strengths and weaknesses
- The importance of your target market to your competitors.
- Are there any barriers that may hinder you as you enter the market?
- Do you have any advantage to enter the market?
- Are there any indirect competitors who may impact your success?
- Other barriers to the market (e.g., changing technology, human capital, high investment cost?)
Regulatory/legislative restrictions – Any regulations governing the operation of business including customer and/or governmental regulatory requirements which affect your business should be captured here. You must give assurance and show how the company is going observe these regulations.
- Description of Products and Services
Give a detail description of your top 3 products and services, with summary information on any of them. Provide information about the specific benefits of your product or service to customers. Add any advantages your product has over that of your competitors.
Information about product’s life cycle
Be sure to include information about the current development status of your products (e.g. prototype) as well as any factors that may influence its cycle in the future. Adding a product photo or other graphic will be prudent.
Include information on any existing, pending, or any anticipated copyright or patent filings. Any key aspects of a product that may be classified as trade secrets should be disclosed. Any information that concerns existing legal agreements should provided in this section.
Research and Development (R&D) Activities
All relevant R&D activities that you are engaged in or are planning are to be included here. Add you r recommended research areas as well as the anticipated results. It is prudent to analyze the R&D efforts of other businesses in your industry.
Finally, be sure that sure that after reviewing this section, the reader will know:
- Detailed information on your top products and an understanding of any other products
- How much are your products and how will you deliver them.
- How your products compete with other products
Watch out for the part 3 which treats the rest of the steps.
By: Isaac NUNOO
(Communications and Marketing___ GCCI)