The Final Chapters of Your Business Plan
Hello again and we hope you were able to understand and fully digest our last article regarding The Product & Service section of your business plan. To save time and get back to our favorite blog topics, equity crowdfunding news and updates, we decided to confine the remaining chapters into one. We will still provide a thorough explanation and relevant links to each section, but the four areas we will cover, although important, may not be as instrumental as the previous three.
To give each section their due we are going to get right into it, so fire up your brains and prepare for the last leg of the blog series. Here are the final four section of your business plan: Industry, Marketing, Operations and Financial:
Business Plan Industry Section
Being in the right industry at the right time means everything. No matter how green the investor is, if they know tech is hot, they will be looking for tech investment opportunities. Seasoned investors will also be aware of hot industries but they might also be looking for a slower growing market and the one company who is ready to explode past its competitors. To give a clear perspective on where you stand, a market analysis is necessary. Within your market analysis you must identify your direct competition and outline their strengths and weaknesses. In-depth market research is another “must” and should explain why your industry is valuable, why it will continue to be relevant to consumers and what makes your product or service the best of the bunch. Entrepreneur.com offered 11 facts you need to provide about your field and we agree it is a solid list. Please follow this link to read the list: industry analysis facts in your field.
Business Plan Marketing Section
The marketing section will rest heavily on the four P’s we mentioned before: product, price, place and promotion. You may have already covered a majority of the four P’s in the Product & Service section, but your marketing strategy requires its own highlighted segment in your business plan. This way your potential investors will be able to quickly reference any information they need without digging through other chapters. Here are some brief yet appropriately stated definitions of the four P’s:
Products are the goods and services that your business provides for sale to your target market. When developing a product you should consider quality, design, features, packaging, customer service and any subsequent after-sales service.
Place is in regards to distribution, location and methods of getting the product to the customer. This includes the location of your business, shop front, distributors, logistics and the potential use of the internet to sell products directly to consumers.
Price concerns the amount of money that customers must pay in order to purchase your products. There are a number of considerations in relation to price including price setting, discounting, credit and cash purchases as well as credit collection.
Promotion refers to the act of communicating the benefits and value of your product to consumers. It then involves persuading general consumers to become customers of your business using methods such as advertising, direct marketing, personal selling and sales promotion.
Business Plan Operations Section
Some equity crowdfunding companies may be small and don’t have operations to describe, but others do. For those who will need to disclose this information, your investors are going to want to know how the wheel spins. There are four major areas you need to cover are labor, materials, facilities and shipping and finished goods. The details you need to cover for each will all be relevant to your operation, but make sure to cite those which are critical to your company and give you an edge on your competition. Mention if you own your office building or plan to lease or rent, how many employees you have now and how many you will need in the future. Basically anything about your day-to-day that a prospective investor would want to know. This is your chance to give them an inside look to the operation you built so make to be an accommodating host.
Business Plan Financials Section
We saved the best for last! Financial data is typically at the end of any business plan, but it does not diminish its importance. In fact, some investors may even browse over your charts and spreadsheets before they head to the Executive Summary. The three main financial statements you must provide include your income statement, balance sheet, and cash flow statement. All of these combined will display your current value, capacity to pay your bills and your ability to earn a profit in the future. It is crucially important to have his information 100% correct, so be sure to double-check your work or hire a financial professional to execute the statements. The U.S. Small Business Association created a lengthy and detailed article on the subject, so please read the following link thoroughly before you begin your own project: SBA preparing your financial statements article.
Business plans are time-consuming, exhaustive and require pinpoint accuracy of your company’s most intimate details. The best way to write a business plan that connects with potential investors is to write it from their perspective. What do they want to see? What is going to make them say ‘yes’ and invest in your company? Our blog series was intended to give you a solid outline of how to prepare and eventually structure your business plan, and we hope we were able to give you some fresh insight. As always, if you have any questions regarding your business plan or anything regarding equity crowdfunding, please contact us immediately.
Thank you for reading and please leave your questions and comments below!