Writing a Business Plan

Do you want your business to succeed? Of course you do. Every business looking to succeed would be wise to take a little time to create a business plan. This important document will help you in any stage of business from start up to expansion to financing a new product or idea. Writing a business plan can help your business to increase its chances of success which is especially helpful during these difficult financial times.

Writing a business plan will be a lot of work. However, you will find that the process is not that difficult once you get started. One of the most difficult parts of writing a business plan is just getting started. Of course, having some tips and guidelines to follow can be especially useful. Here are some ideas to help you as you write your business plan.

What Do I Need To Include?

Your business plan needs to demonstrate that you know what you are doing and that you understand your business. Generally this knowledge and information is broken into distinct sections. This helps you to keep your business plan organized and easy to write. Lets look at each of the nine sections in a little more depth.

Executive Summary

Since your executive summary leads your business plan, it is important that you carefully construct this first section. In fact, the executive summary is so important that it is placed directly after the title page, even before the table of contents. Many find that writing this key section works best when completed last. The executive summary serves as a synopsis of all the sections of the business plan. If you wait until the end, you will be better able to write a cohesive and complete executive summary.

Within the executive summary, you will include your company mission statement. This mission statement should not be long, probably about four sentences in length, but should be carefully instructed. Many say that the mission statement is the most important part of the overall business plan.

Since your mission statement is only a few pages long, your executive summary will allow you to further expand upon key points mentioned in the mission statement. Consider including your business history, biographies of key players, an overview of the business including locations, employees and available products and services. You can also discuss goals and future plans. Use this section to really draw in the readers.

Many find that a bulleted format is ideal for this section. This section should be easy to read and scan so that potential investors can easily get an overview of your business. The biggest mistake that many make is including too much information. Make sure that your information only encompasses one or two pages.

Market Analysis

In the second section of your business plan, you will cover the analysis of your specific market. During this section you will showcase your business’ ability to succeed. Success is dependent upon accurate and complete market analysis. This section will show that you have done your research. Use this section to sell your business to potential investors. Show them how your business can succeed.

Thoroughly cover your business’ market. Talk about your industry and use specific details to support your statements. Details like industry size, growth rate and customer group will help you showcase your business. Include as many details as possible. Do not fill this section with generalized information. Make sure it is industry and business specific.

In this section you should also include the results of any market research studied that your company has completed. Also briefly discuss your competitors and their strengths and weaknesses. You may want to cover how your services will appeal to customers more than your competitors.

Detailed Description of the Company

After showcasing how your business can succeed in your specific market, it is time to illustrate a comprehensive picture of your business. Cover in detail your business including information regarding the type of business, the target market and how you can meet their needs and distinguishing factors that make your business unique.

Remember that each section in your business plan will overlap. This means that you may cover information more than once as you move from section to section. This is okay. Your business plan may be considered as a whole or may be viewed as individual sections. This means that each section must include all key information. Don’t neglect including important information simply because you feel it has been covered in other sections.

Organization Structure/Management

This section will detail specific information regarding your staff and executive positions. Cover how your company will divide work. Who will do what jobs? How does your business management structure work? Include biographies of key business personnel including owners, board of directors, management and other company executives. You should also discuss employee compensation and benefits.

In this section you will demonstrate your company’s ability to succeed through your management plan. Additionally you will help investors to realize your company’s potential as far as an employer is concerned. Investors know that good, long lasting employees can help your business to succeed. Therefore they are looking for strong and effective management as well as the ability to retain and inspire employees.

Marketing

How are you going to get the word out about your business? In this section, you will detail your plan. You can also discuss how your marketing strategy will lead to growth. Be complete and detailed in your plan.

Product and Service Offerings

This section may sound like a simple list of your available products or services. While this is one aspect, there is other information that needs to be included in this section. For each service detail the specific benefits of the products and services you offer. Discuss the advantages you have over your competitors with a specific focus on products and services. Also discuss how you can expand your product and services offering as time goes on.

Funding Request/Requirements

A business plan is often a tool used to help your business secure needed funding. If this is the case, make sure you include a funding request in your business plan. Be specific. Remember that potential investors need a thorough understanding of your requests so that they can make a decision about whether or not to approve your request. Be sure that you include the following information:

• What you need immediately in terms of funding
• Funding needs over the next several years
• How the money will be spent (be specific)
• Do you want loans, investors, partners, etc?
• How you plan to repay the loan

Financial Statement

This section is often carefully considered by potential investors. It helps investors to determine the financial solvency of your company. You will not just discuss your current financial state. In this section you will cover your financial past, your current state and your goals for the future. Include income statements over the last several years, balance sheets (both prior and projected), projections and available collateral.

It can be especially effective to include charts and graphs to better illustrate your financial plan. Including graphs and charts will help investors see the growth potential for your business and will make them more likely to approve your loan. Remember that the amount of funding desired must be in accordance with your financial projections. Investors want a return on their investment and will not invest more that they will get back.

Other Information

At this point you may feel that you have covered everything. However, there is probably other information that you want to include that couldn’t fit into one of the previous sections. This is the place where you will include it. You may want to list specific details in this section and then reference them in the other sections. This will keep your business plan from being cluttered with extensive details and information. Many business plans include items such as: credit reports, letters of recommendation, licensing and patent information, legal documentation, executive resumes and a list of business associates including your lawyer, accountant and business consultant.

Getting Started

You may be feeling overwhelmed at this point by the wealth of information you need to include in your business plan. Make sure you use an easy to read format. This means that you should definitely utilize headings, bullets and lists. Focus your writing to your audience. If the purpose of the business plan is getting a business loan, make sure your writing conveys this message.

How Long Should My Business Plan Be?

Try to keep your business plan between 20 and 40 pages. This may sound like an unachievable task. However, much of the finished length will be encompassed by formatting. Using bullet points, lists, charts and pictures will not only make your business plan more effective, they will help your business plan to be longer as well.

As you create your business plan, tailor your presentation to a busy professional. Assume that they will only spend 10-20 minutes perusing your plan. Make sure that you thoroughly sell your idea, needs and business during this brief time period. Further attract your audience using clear formatting, easy to read content, well thought out wording and correct spelling and grammar.

A Guide to Writing a Business Plan

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Understand the Concept of a Business Plan

Undoubtedly, putting together and implementing a proper business plan is one of the most important aspects of starting a new business. By doing this, you will be able to easily set targets and goals, formulate and implement ideals, verify realistic and functioning approaches to the business, and push towards the long-term success of your particular writing a business pland.

This essential tool works to attract the startup funding for your business. The document needs to be dynamic, jumping off the page at potential investors.The document also needs to be reviewed and monitored regularly to measure the overall performance of the business.

This guide will explain various aspects of what your business plan should include and how you should formulate one for yourself. Various strategies laid out in this guide will be vital to the proper formulation and implementation of a business plan. This is aimed directly at startup businesses in need of fundraising, but the message is valid to all businesses.

Benefits of a Well Formulated Business Plan
This business plan is primarily for your business partners. Some of the things it can help you to do include: Bringing research and ideas together into a well-structured, professional format

# Deciding when and/or if your business is commercially viable

# Clarifying your businesses goals and communicating this to staff and business partners

# Predicting future business scenarios and potential pitfalls in order to address them before they threaten your business’ success

# Laying out a strategy for your business

# Setting different objectives and targets, which include financial targets

# Enabling you to watch your business’ performance carefully and regularly

The Best Way to Approach the Plan
It is essential that any investor understands your business’ agenda if the purpose of the plan is to ask an investor’s financial support. Any and all investors need to be ensured that your business will profit, therefore, a good business plan will clearly list your objectives.Read any published literature from a body you are approaching so that it is easy to identify objectives, thus making it easy to demonstrate how you will meet them in the business plan.

For instance, if you’re reaching out for a grant or loan, it’s important that you understand where your business fits into the financing. Your plan should illustrate to funders how you plan to start and operate a profitable business. It is also essential that your plan stand out above the rest of the mundane plans out there. You need to be comprehensive, concise, and complete in your plan, without making contradictions. You need to always check that any figures you include in the plan add up.

Any irregularities will leave potential investors fleeing your business. Your plan needs to be credible.Identify what your audience wants to know about your business. It is important to be honest in this aspect of business planning. Make sure you include details such as why your business is located in a particular area, why you’re targeting a certain audience, etc. These plans need to be as realistic as possible and convince investors that your business is worth their dime. Make sure you provide a way to back up any claims you’re making.

Business Planning Roadblocks

Kicking & Screaming

Most business owners and department managers know they “should” have a plan. Yet in all my 25 years of helping business owners and managers grow their businesses, just four of my clients possessed a written plan, and only one was actually using it. Why do so many business owners skip this crucial step? Some common explanations I’ve heard go something like:

  • “I don’t need funding, so I don’t need a business plan.”
  • “My plan is going to change anyway, so why should I waste my time creating it?”
  • “It will take too much time.”
  • “I started to and found it overwhelming.”
  • “I didn’t start a business to do the types of things I did when I worked for someone else.”
  • “I don’t want a big company. I don’t want employees.” (I just created a J.O.B. for myself.)
  • “I don’t know which planning program to use; there are so many out there.”
  • “It’s expensive to plan and I need to spend my money on other things.”
  • “I don’t need to plan; I just want to work in my business.”

Does any of that sound familiar? For the most part, “winging it” from day to day works-until it doesn’t. Many business owners learn this the hard way. Whether at the $60,000 per year income level or at the $30 million level, without a plan, a business or its owner will eventually crash. Owners or managers will often agree to use a plan if someone else creates it for them. That’s a BIG no-no in my book. It’s important for business owners to gain the experience of the planning process. At least once, they must tackle the questions they’ve put off answering. Otherwise they run the risk of never gaining real clarity regarding the direction of their business.

The Care and Feeding of Business Owners & Managers

As the old saying goes, “You can lead a horse to water, but you can’t make it drink.” Clients who come to me for help with their strategic plan are often feeling a “pain”. It is a common experience, often necessary to compel them to take a “drink” from the strategic planning process. Here are a few common “pains” my clients have reported:

  • They’re not attracting their ideal clients and are sick and tired of working with jerks.
  • They need to be making more money.
  • Their spouse informed them that if they don’t spend more time together, they’ll file for a divorce.
  • Their spouse wants them to get a “real job”.
  • They’re retiring from a job in “x” years and want to have an immediate income at that time.
  • They’re retiring in “x” years and want all the work, time, and money they invested in their business to be their nest egg.
  • They’ve discovered that a business isn’t just a place to work, but an entity to grow.
  • “Someone” told them they had to create a plan.
  • “Someone” told them that their marketing is “all over the place”.
  • They need help managing their company or department.
  • They became an “accidental” business owner or were promoted suddenly, and need help fast.
  • They’re turning 50 and want to examine the next 30 years of their business with someone who isn’t as vested in the business as they are.
  • They want to work one day per month because they want to start a non-profit.

These and many other possible “pains” or problems will hopefully lead a business owner to re-evaluate the need for planning. But where to begin? The task of planning can seem monumental. Luckily, there is a one-page process which makes planning not only exciting, but simple and straightforward.

When the Light Bulb Flickers

When someone seeks my services, they often need more clients, better clients, or more money. In determining what is hindering their growth, we find they have no vision, mission, objectives, or strategies written down. They usually have no action plan, marketing plan, or financial plan, either. Here are some reasons they’ve given for finally taking the planning plunge:

  • “My original business vision was thrown to the wind and all I’ve been doing is looking at ‘today’.”
  • “I realized that the business I envisioned is not what I have, and I don’t like the business I have.”
  • “I read Michael Gerber’s The E-Myth Revisited and realized I need systems.”
  • “I’m getting older. I want to get top dollar for my business in (5, 10, or 20) years, and I know I need to have a turn-key business. My business is anything but turn-key.”
  • “I’m getting bored of running my company, and want to get it ready to sell/hire a CEO.”
  • “I have tried to grow my business for the last two years and what I’ve done isn’t working.”
  • “I want to start my business right; I know I need a plan.”
  • “I want to earn more money.”
  • “I’m frazzled. I network and market all the time and am not seeing the results I once saw.”
  • “I am creating a new position within the company. I need to bring the concept to my boss in an organized way.”
  • “Although I work for a company, I’m paid on commission, and I need a plan to expand.”
  • “I want to open a branch office, but I can’t see having two unorganized offices. I need the first office organized, and systems created before I start the second.”
  • “I don’t like my business model but don’t know what to change or how to do it.”
  • “My business does not have an inner brand, niche, or focus.”

Back in 2000, with a year-old business of my own, I had the opportunity to attend a one-day planning program which helped me to create a plan on a single page. This plan would encompass all of the plans mentioned above. As a participant, I realized the importance of planning strategically before attempting execution or implementation. Today, my clients use that same methodology to bring greater success to their businesses. And when someone wants me to create the plan for them, I do it with them. My clients are present during the process, learning a system that can be reused in the future to make their lives easier-and more profitable-in the long run.

Preparing a Brief Catering Company Business

Similar to any other business, a catering business also works on a business plan and having one ready before you begin a catering business will make sure that you start well and go in the right direction as planned. As with any business, a catering business will also have goals and tools to measure progress as a part of the catering plan. In short, having a solid plan will make sure that you remain focused on your objectives.

A business plan, not only to keep track of your business but also helps when you look for help from outside, especially financing. If you are looking for investors in your business, the first thing that an investor would like to see is a very solid plan – be it your future business partners or financial institutions (banks).

Writing a plan for your business is not as easy as it sounds, it does need a fair amount of research and a good bit of thinking. In fact, you can get a sample business plan from a well-run catering company and use it to write your own by inducting your own parameters. The business should consist of the following components:

a. Executive summary: This part of the business plan should explain your business and consist of a brief outline to the reader.

b. Objectives: this part of the business plan should describe the short to long term goals of your catering business (ideally for the next 4 to 5 years) in financial terms. These goals should outline the objectives to be achieved with a time-line.

c. Mission statement: This part of the business plan should define and explain the catering company’s values and ideals (in short, business ethics and ambitions).

d. Ownership: this section go the business catering plan deals with ownership structure of the catering company, whether it is a proprietorship, partnership or a limited company and the details thereof.

e. Start-up requirements: This section should contain information about the catering company’s start up needs. What is the cost of start-up? What is the working capital required? What is the equipment required? Etc.

f. Market Information: A catering business also has competition and it is necessary to include the information pertaining to the same in this section of the business plan. This would contain a brief summary of the competition along with analysis and the plans that would be followed to get ahead of the competition along with details of new markets to be explored and services to be offered.

g. Strategy: This part of the catering plan should contain the marketing strategy that is to be followed to achieve the objectives. This section would also include forecasted financials for sales.
h. Management: For your catering company to succeed, it would need a highly skilled management with hierarchical control. This strategy and working needs to be integrated into the business plan in this section.

i. People: Hiring would be a key factor in the catering business and therefore the plans for hiring and man power costs need to be estimated well in advance and put forth into the business plan in this section.

j. Finances: Last but the most important, the financials of your catering business needs to be put on as per in this section of the plan for your catering business. Projected profit and loss statements need to be prepared depending on estimated costs and revenues for the nest 4 to 5 years. Understood that the market is never consistent, however having some optimistic as well optimistic estimates would help plan your business better. Once this is done successfully, it is easier for you to understand and underline the break-even point for your catering business. Once you know this, the objectives are frozen and all you need to do here is to put your best foot forward.

A lot of generic business plans are available; you can always grab one and customize it to suit your catering business. Although this is easier, it is always good to begin from the scratch and make your own catering company business plan since it would help you to understand your business better and will surely put you on the right path to success.

Writing a Business Plan

Writing a business plan can be a daunting activity if it is the first time you’ve tackled such a detailed, thorough project. Too often, entrepreneurs rely upon templates or a sample business plan as an example for their own proposal, and in the process lose the creativity and energy that they have about their idea. There are many options for writing a persuasive and effective business plan without spending a lot of money on a writing coach, proposal writer, or additional resources.

Web Resources

Chances are, you’re already relied on the internet to gain guidance about projects you’ve never done before, or looked up instructions for a complicated process. There’s a lot of information online about writing a business plan and you can easily find a sample plan, but not all of that information is quality, or worth your time. So how do you effectively search for web resources that will actually help you instead of wasting your time? Much like any kind of internet research, the tip is to begin by using only credible resources. In addition to searching for “writing a business plan”, or “sample business plan”, type in “business school” as well. Many business schools around the nation have free, available information for the public on how to write a business plan. They may include links to area-specific resources, or provide tutorials or downloads for a sample business plan.

Another great resource for writing a business plan is your local Small Business Administration center. Most major cities have these types of small-business assistance resources, either in a brick-and-mortar office or online. These SBA websites almost always offer comprehensive resources for start-ups like a sample business plan, business plan development ideas, events, counseling and training services, and local resources. Check to see if your SBA website has free, online planning webinars. Even if you local chapter doesn’t offer them, you can easily find a website in another region that does. These online seminars are typically self-paced, 30-minute long resources that help you understand the components of writing a business plan (which provide much more insight than a simple sample business plan), and may be offered in a variety of languages.

Podcasts are another web resource that not many people think of when they think “business plan”. True, you don’t get the same visual education from a podcast as you do from a webinar, but listening to someone describe the process might be just what you need to motivate you while on a long commute, at the gym, or sitting at home. And with a lack of visual information, they might seem less overwhelming than looking at an online presentation or sample business plan.

Books and Printed Material

The internet is a fantastic resource for writing a business plan, but for some people, nothing beats a good old-fashioned book. Your local library has entire sections dedicated to the multiple aspects of business development, and you can be sure to find several books about how to write a business plan. Best of all – these are free! If your local branch does not have the book you’re looking for, check the catalog and request a book transfer. Sometimes, the perfect books about writing an effective business plan or ideas for a sample business plan are just an inter-library loan away.

Be sure to check out your local college library as well. Often, academic libraries will have more comprehensive business books than local libraries, and may offer a wider selection of in-depth materials regarding not only writing a business plan, but strategizing how to continue with your business development afterward. Keep in mind that many university libraries are open only to students, so call the resource desk before you make a special trip onto the campus.

Seminars

If you do have a SBA resource center in your area, check their calendar of events to see if they offer periodic classes or workshops, or can help you rework a sample business plan. Often, an SBA will offer a class dedicated to writing a plan – at no cost! The advantage of attending a live seminar as opposed to an online seminar is that you can often ask the facilitator questions at the end which you can’t do online. Typically, the person leading the course is a professional with years or decades of business experience. They’ll likely be able to assist you with tips, tricks, and shortcuts to develop a plan.

Finally, it’s important to consider that when you’re writing a business plan, you don’t want to cut corners or rely on a sample plan from a book or website. The business plan is a representation of your professionalism and your desire to succeed, and the quality of your content should reflect this. So while tips and tricks are good for making the most out of your time and resources, it’s never a good idea to gloss over important aspects of your plan – namely, the quality of your writing. While writing a business plan necessitates the inclusion of facts, figures, numbers, graphs, financials, etc., the narrative surrounding the why of your proposal is what will likely draw people into helping you achieve your vision. Do you sound passionate about your product? Do you sound knowledgeable? Does it sound like you have what it takes to not only start your business but develop it and work through anticipated and unseen challenges? No? Does it sound like you relied on a sample plan instead? Well it may be a good idea to check out some of the writing seminars available for assistance with writing your plan. Many of these seminars do cost some money, although others can be attended for a very nominal fee. Courses like these can help you find your “voice” and deliver a more compelling proposal.

The most important thing to consider when writing a plan is to take your time, be thorough, be accurate, and above all, believe in yourself and your product. Don’t just rely on a sample plan, create a proposal that you’re proud of, and that you are convinced will compel others to help you realize your dream.

Writing A Business Plan

All businesses, of whatever size or stage in its development, need to have formal business plans in place, prepared by the management and not their accountants, and fortunately there are many now many free business plan templates available on the web to help you in business planning.

Why Prepare A Business Plan?

There are four main reasons why you should prepare a business plan. These are not mutually exclusive, and as the business changes and grows the business plan should be regularly revisited and reviewed since these issues will apply equally well to an established business as to a start up.

The first is to plan in the widest sense. In preparing a business plan you are preparing first and foremost a plan and the process is one of thinking through what you are going to do in the business, how you are going to do it, what are the separate projects that will have to be completed to reach the end goal and when by, what resources you will need to have in place and when, what the risks are and how these are to be managed, and so on.

The second is that from setting out your plan of action you can then assess and understand the likely financial performance and requirements of the business. You can examine the key sensitivities involved in your forecasts and take a view on the financial risks, and potential rewards involved.

This is critical as the third reason for preparing a business plan, which is often seen by some managers, mistakenly in my view, as the real point of the exercise, is to provide it to investors or lenders in support of a request to raise funding.

The fourth reason is that that plan provides an objective benchmark and milestones against which the progress and success of the business can be checked.

So, whatever the initial reason for carrying out a business planning exercise, management should always use the process as a chance to genuinely plan the business, and not just as an exercise to produce a document that is never looked at again.

What Should A Business Plan Contain?

You can now find many examples of business plan templates on the web which will vary in the content and headers they use as there is no definitive list of contents. In general however, a business plan should cover the following items, which will provide a pack in a format that prospective lenders or investors will generally find acceptable.

  • Company details including company number and logo;
  • Contents;
  • Executive Summary a brief summary of the plan covering all areas and being no longer than say 2 pages;
  • History and Current Position;
  • Products or Services;
  • The Market;
  • Operations;
  • Management and Staff including an organisation chart where appropriate;
  • Financial Analysis a summary of the financial projections;
  • Investor or Funder Deal and Exit Plan where the plan is being used to raise finance this is where you set out the proposed support you are seeking and what is in it for the funder; and
  • SWOT Analysis a summary of the strengths, weaknesses, opportunities and threats facing the business.

The plan should also be backed up by appropriate appendices giving the financial information such as historical Statutory or Audited Accounts, up to date management accounts and three year financial forecasts, all of which should obviously tie in with the body of the plan itself. In addition there needs to be the non financial information required to support the plan which will normally include CV’s for each of the Directors and any other key personnel, examples of marketing material, details of the business’s professional advisors and any other supporting documentation that may be relevant such as significant new orders.

To What Extent Can Or Should You Vary The Format?

If you do use a business plan template, don’t hesitate to tailor it to your business’s particular circumstances. Every business has its own characteristics, and each writer will have their own style so every business plan will be different.

Whilst the headings given above are relevant for most businesses, the focus of attention will vary depending on the purpose of the plan and the intended recipients.

If the plan is being written for internal purposes then it may concentrate on tasks such as Marketing or Operations and be used to attribute tasks, set timescales, targets and rewards, and then used to help co-ordinate and monitor an agreed overall agenda.

If you are preparing the business plan to support an application for a loan then the financial and trading data, and in particular the cash flow analysis, will be critical parts of the document. Lenders will be particularly interested in the assets available as security, any other existing borrowing, and will closely scrutinise the detailed financial forecasts.

If the plan is to be shown to potential investors then you will need to be careful that you comply with the requirements of the Financial Promotions Order as failing to do so can lead to criminal penalties. Like lenders, potential investors will review the financial forecasts and proposal within the business plan, but they will also be looking to establish a potential valuation of the business at the time of the proposed exit.

What Makes A Good Business Plan?

As hopefully will be clear from the comment above, this will depends partly on what it is to be used for, however any business plan should be:

Concise – It should be short and to the point;

Comprehensive – a potential funder more likely to provide finance if they are able to clearly understand the product, market, funding requirement, opportunity, the skill sets of key personnel and the financial projections, then if they can’t;

Clear – it should be written in clear plain English, (and be properly spell checked and proof read), but the message or propositions should be clearly stated so that the target audience can understand what it is that you want from them, as well as the all important what’s in it for them;

Owned you must clearly be able to present it and answer questions on it, including on the financial projections and assumptions, from potential backers.

The last point is a critical one. All too often when potential financial backers speak to business owners about the numbers in a plan that has been presented, they receive the answer ‘Oh my accountant put the numbers together for me’, which immediately raises questions about how realistic the forecasts are.

After all, if you don’t understand what the projected financial performance of your business is, the how is a funder expected to believe that you can make it happen?

Vending Machine Business Plan

The preparation of your vending machine business plan will be the most important thing that you do prior to launching your new venture.

A business plan will be a crucial resource that will help guide your business in the right direction. A business plan sets out what has to happen in order for you to reach your goals, outlines how you will do it and sets out alternative plans in case things change further down the line. It forces you to do the research that is necessary in order to find out if there really is a market for the vending machines and locations that you have in mind.

It may be necessary to have a plan written in a formal, professional style if your aim is to use it to convince bankers or investors to support your idea. However, even if you don’t have anything to prove to anyone, your business plan will help to confirm the viability of your ideas in your own mind.

Keep a copy of your plan on your PC as well as in a file or binder in case of emergency. Don’t forget about your business plan once you have opened your doors for business. Refer to it regularly to make sure that you are on track to meet targets. Don’t be afraid to make changes to the plan where necessary.

Every entrepreneur or business consultant will have different ideas about how a business plan should be structured. There are many different templates available online and some sites even have samples relating directly to the vending machine industry. Below we offer an example of a suitable outline with section titles that you might consider including in your own vending machine business plan.

Cover and Contents Page

Start off with a cover page with a heading to let people know what the report is about, who the author is and when it was written. If you will be presenting the report to many different people then you may consider including a personalized cover letter with each copy of the plan. Start out with a table of contents so that readers can easily find their way around the report.

Executive Summary

Summarize the other sections of your business plan. Present some brief information on the opportunities that you see in the market and summarize what it is that you intend to do with your business to capitalize on these opportunities. Try to entice readers into reading the whole report.

Background

Offer the reader some background information on yourself and your reasons for starting a vending machine business. Provide details of any relevant experience or competitive advantages that you have.

You can also include a vending industry background showing national industry data as well as information about the local industry that you plan on entering.

Mission Statement

A mission statement is usually a phrase or a couple of short sentences that summarises what your business is all about, what it does and how well it does it. It is a good way to remember the basic goals or philosophy of your company aside from the profit motive. A good mission statement could mention something about the standard of your machines and products or how you strive to be better than your competitors.

Goals and Objectives

State the goals that you wish to achieve in the short and medium terms. Goals could include placing a certain number a vending machines or reaching a certain income level per machine.

Startup Requirements

Set out a list of startup costs and calculate the total amount of capital that will be needed for the company to get started. Report on some of the funding options that are available to the owners.

In this section of the report you can also mention some of the other things that must happen in order for the business to commence trading legally and professionally. Mention the processes and the fees involved with applying for licenses, permits and other paperwork under the laws of the region where the business will be operating.

Ownership and Management Structure

Note who the founders of the company are and the particular ownership interest that each has in the business. For those who will be active in the management of the business it is important to outline what role they will play and their responsibilities. Will the business be registered as a sole proprietorship, a partnership or a corporation?

Business Operations

This section of a business plan should outline the details of how you plan on running the vending machine business. Include information on where your business will be based, administration, any plans that you have to hire employees and how your business will run on a day to day basis.

Include details on vending machines, maintenance, products, distributors, route planning and how you will record and manage sales data. What systems will you put in place to maximize productivity and efficiency?

Try to come up with solid reasons why you are choosing a certain vending machine, product line or system. Wherever possible include some supporting evidence from research that you have done.

Market Analysis

Using data from your market research you can report on the current state of your target market and identify some of the opportunities. Here you can include demographic data as well as information that you have gathered from surveys and other investigations.

Provide information on the competition in your target area and examine their strengths and weaknesses. Look at ways of delivering products and services via your machines that are distinctly different from what your competitors are offering. Get ideas from them about what is working well and what isn’t. Look for a competitive edge. Don’t forget to also mention indirect competitors such as convenience stores, in-house cafeterias or food vans.

Marketing Plan

Outline a strategy for creating a vending brand that will meet market needs. Based on the market opportunities that you see, set out a strategy for meeting customer needs in terms of locations, vending machines, product lines and pricing.

Provide details on how you plan on getting new machine locations, arranging appointments with ‘decision makers’ and selling your services to them. Your marketing could mostly be done by approaching decision makers directly or you could rely on advertising to generate some enquiries.

Also outline your plan for marketing directly to your customers or end users. These could include ‘point of sale’ promotions on the machine front or how you or your staff will build relationships with customers when you visit the premises where your machines are located.

You should also mention how you plan on maintaining vending accounts and customer satisfaction in the long term. Customer retention is just as important as customer acquisition.

Financial Planning

Use a spreadsheet program to set out forecasts of cash flows in and out of your vending machine business over a hypothetical two year time period. If you have done your research you should be able to anticipate monthly income and expenses going forward. You will thus be able to determine future levels of profitability and a break even point.

Run a variety of different scenarios that consider a conservative growth rate, an expected growth rate and an optimistic growth rate. Things don’t always happen like you expect so it is important that you plan for a variety of outcomes.

Time For Business Planning!

“It’s the most wonderful time of the year…..”

Ah yes…..the annual business planning cycle is upon us.

The time of the year to huddle all of your business colleagues in a room to hash out the key initiatives for the upcoming year. The time to throw everything up on the wall and try to get everything done in the first quarter. “This will be the year that all plans will be met” is the battle cry! Every vision, idea and strategy gets bantered about – shouts of “there are no bad ideas!” fill the air. The room is electric with visionaries exchanging ideas on how their idea solves all issues, yet year after year, it seems that plans never actually come to fruition.

Why is that? The intent was there; the energy was present; and ideas were flowing. That’s the easy part – coming up with the ideas. The success of your planning doesn’t rest on the ideas, but rather, implementing those ideas. It’s true, companies need to foster innovation in their business planning, but more importantly, they need to create a business environment that enables team members to execute these ideas with an “on-time, on-budget” mindset. That is where the work begins.

I have been putting together business plans for over 25 years and it is clear to me that the strength of its core rests solely on being able to execute the plan. Each year I approach business planning as an opportunity, rather than a burden. I would rather invest the time up front in mapping out the upcoming year, than leaving it to chance to dictate my strategy. While this may force me to think strategically as well as tactically, preparing a detailed business plan in advance enables me to identify the challenges in advance of actually facing them.

So, why is business planning so crucial? In a word, it provides “clarity”. Investing time to develop a plan provides precise clarification of the company vision to both employees and customers. In addition, it provides a mechanism to gauge the results of the business and provides the foundation for future growth plans. In the long haul, it enhances the company valuation through fiscal responsibility, which provides the story of opportunity to any future investor or employee. In short, the benefits of planning allow the company to articulate a common vision to align resources and make an efficient use of investment dollars. A company that is perceived to be a “well-oiled machine” is attractive on many fronts – both externally with investors and internally with employees through job satisfaction and increased tenure.

Strategic Planning & Goals: The first step is to identify the key company goals which will be the over-arching direction of the plan. These goals should be focused on three areas: financial, growth initiatives and alignment to the company’s vision/mission. This provides the overall direction of the company by establishing high-level goals that will be achieved by tactical initiatives. The overall plan should be 1 to 3 years with measurement mileposts monthly, quarterly and annually. While the plan is put in place at the onset of the year, it should be constantly re-forecast with actual results throughout the year.

Developing Planning Modules: Compartmentalizing your plan by developing planning modules or “chunks” allows you to attack the plan in parts, yet still maintain a cohesive plan. I have found that developing an annual plan made up of quarterly targets – thus becoming a rolling quarterly forecast financial model – allows for a cohesive structure along with the nimbleness to react to market conditions. At the end of each quarter, a true-up process to align results to annual targets needs to be re-forecast and adjustments made.

Develop Non-Capital Initiatives: Each project initiative should have a corresponding project plan that monitors whether it will be completed on-time and on-budget. The importance of the detailed project plan is to accomplish the following: a) identify all the steps to be completed; b) establish a realistic timeline for each step; c) identify and allocate the necessary resources for accomplishing the initiative; d) ensure that the initiative has been vetted for departmental inter-dependencies and potential conflicts; and e) ensure that the initiative is in alignment with the overall strategic plan.

Create A Capital Plan: Next, I would develop a capital plan identifying dollars to be spent on the business to increase its overall value. While all capital dollars may not entirely be discretionary – i.e., investing dollars for anticipated return from growth – it is necessary to determine how capital dollars will be allocated whether for discretionary purposes or general maintenance. Projects that require capital are critical for the company growth and must be managed to their desired return, avoiding shortfalls in ROI or issues involving “capital creep”. If you haven’t already, setting up a capital committee to review expenditures in advance of the start of the project provides some assurance that the projects have been vetted against return on investment. Lastly, developing a post-audit process enables the team to review and monitor the progress of ongoing investments.

Business Plan Analytics Through Key Performance Indicators (KPI’s): Identifying key performance indicators for your business to use as benchmarks throughout the year is perhaps the most critical step you can make with regard to business analytics. Not only will KPI’s help identify key shortfalls in the plan, but will help narrow your focus in addressing the shortfalls. For instance, recognizing that you have an issue in labor isn’t merely enough when you consider the following possibilities: a) labor rates may be too high; b) overtime has exceeded its budget; c) the issue is regionally-based, not across the board; d) man hours may have exceeded its allocated budget, etc. It could be a myriad of triggers that caused labor to exceed its budget and KPI’s enable you to drill down to the cause. KPI management requires a disciplined review process established monthly that fosters a blended analysis throughout the year that compares actual results against both budgets and forecasts.

Fundamentals, Cycles & Trends (FC & T’s): Your plan, if done in advance and thoroughly, should provide and excellent foundation from which to work. Even the best plan still has to react to outside forces that will influence your best intentions. Identifying certain fundamentals, cycles and trends that may impact your company is a prudent way to being able to develop a contingency “plan B” in the event an outside force rears its head. A series of key FC & T’s should be monitored throughout the year so that if required, your plan can react. Certain FC & T’s may include wholesale pricing, weather, commodity markets or labor market impacts that are out of your control. In my opinion, developing contingency plans in advance for these outside forces at least gives you a fighting chance to react favorably.

Strategic Review of Plans/Goals at Year-End: At the end of the year, a thorough review of the plan and its process should be discussed with the team in order to make the next planning cycle more effective and efficient. Take a look at all of the successful initiatives and the ones that fell short in order to identify where the “broken pipes” occurred in the process. Remember not to double-dip on the capital projects EBIDTA contribution for the upcoming year – your budgetary baselines should move in concert with these investments. All projects that straddle the budgetary year, should be rolled over into the new plan. Business planning is the road map that identifies where you are headed in advance. As importantly, it also identifies road blocks – in advance. Your business plan should provide a common vision supported by tactical initiatives that, ultimately, creates greater value for your company. It may seem daunting, but by knowing your vision and its corresponding financial targets, you will have a better chance at executing how to get there and avoiding traps in advance.

Why You Can’t Afford To Let Your Business Plan

If you’re sitting in your office reading this: stand up, go to your bookshelf, and get down your current business plan… not on your bookshelf? Oh, that’s OK, try the filing cabinet… not there either? Can’t remember? Maybe it’s in one of those musty old boxes you packed up years ago with all the “non-essential” stuff?

OK, let’s try this. Remember when you bought that brand new photocopier? Wasn’t it great getting everything out of the box and grabbing the manual so you could put it all together and learn how it works?…and what about that great new feature (which you hardly ever use) that allows you to scan a document, then save it as a PDF and retrieve it later for editing and re-printing. Can’t remember how to do it? No problem – I’ll bet you know where the manual is! Carefully filed away for just such a time as this, when you need to refer back to it to keep things running smoothly, right?

So, how come you can find the photocopier manual that guides you through the process of running the photocopier smoothly, but you can’t find the business plan that helps you to run the business smoothly?

Now don’t feel too badly here, because you’re not alone. In fact, if you’re like many remote and regional businesses, you probably don’t even have a business plan – no wonder you can’t find the bl**** thing!

Seriously though, can you imagine setting out on a trip without any idea about where you want to go, no planning, no road map and no itinerary? No contingency plan to deal with the possibility of something going wrong? Sure, if you’re driving on the freeway, some of these things are not so important, but what about if you want to explore off the beaten track a bit? Strangely enough, there are some businesses that set out on the journey of running a business without any plan or direction or contingency plans for when things get rough.

But worse than this, there are businesses out there that started out right – did all the right things, got their business and marketing plans in order and did some contingency planning – then put the plan in the bottom drawer, never to be seen again. This is an interesting behaviour; you don’t throw your maps out the window once you’ve started your road trip do you?

Let’s assume for a moment that you’re starting from scratch and building your business from the ground up: what are some of the things you need to keep in mind regarding your planning:

If you fail to plan, you are planning to fail

As CEO of a remote Indigenous community in the middle of the desert, I was acutely aware that attempting to leave the community, for even a short trip, without adequate planning could literally end in death. It’s no different for business – failing to plan can be fatal;

Your business plan is not an optional extra, it’s an absolute essential

In the same way that your tour map or your SatNav guides you to where you want to go, your business plan gives the business direction and purpose. Without a business plan, businesses tend to operate in what I term “reaction mode”, lurching from crisis to crisis. Don’t get me wrong, it is possible to run a business ‘successfully’ like this, it’s just not very efficient, that’s all;

Your business plan should reflect not just what you do, but who you are.

Businesses that lose their “why”, tend to struggle to perform at their peak. Two prime examples of this phenomenon are Starbucks and Apple;

Make sure your business plan paints a complete picture of the business from its foundation to its possible wind-up.

If you have a long-term view for your business or company, having a documented pathway will be a valuable archive one day;

Have clearly defined long-term goals in your business plan, along with shorter “stepping stones” that lead you there.

Make sure these are time-lined with built-in measures so you can track progress along the way;

Store your business plan in an accessible place where you can get to it easily.

It should be a living document that you re-visit at regular intervals for review and updating.

A business plan should be a living document that guides your decisions, keeps you on track and changes with the ever-changing face of your growing business. Look at it frequently, breathe new life into it and don’t bury it in an old musty coffin, hoping it will rest in peace.

Business With a Growth Business Plan

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Are you at a point with your business where you just don’t know what to do next?
Do you have a business plan?
How about a growth business plan?

Have you looked at a lot of different ways to grow your business and nothing seems to work?

The right growth business plan could be your answer. If a growth business plan is done the right way it may open up some opportunities you have never thought about before. A growth business plan can be developed many different ways but I would like to discuss a growth business plan to business  that you may have never thought about.

Here is the way I would encourage you to set up a growth business plan:

• Do some dreaming about what you would like your lifestyle to be
• By dreaming decide on an average income you would like to have over the next few years
• Decide how many years out you would like your plan to cover
• Decide how much profit you would like for your business to generate above the income you want for yourself.
• Set up a profit and loss statement of your existing business or your proposed business
• With the right business knowledge and a profit and loss statement you can actually use that data to see what your business would need to do for you to give you that income and profit
• Even better you can determine what size market you would need and even determine whether your market would support your business presently and in the future.

To me a small business is one of the best things you can have if you enjoy operating a business; however, it does require a lot more than just enjoying ownership and running a business. Especially if you are starting a small business and even if you have had a business for many years, you should know what you want for your future. Never guess about your business. You see, without a plan, you are just guessing. We business people work hard and we always continue to hope for the best but when we guess, we’re taking a lot of risks. You’ve probably heard the old saying from an unknown author that says, “If you fail to plan, then plan to fail.”

As a matter of fact, did you know that the Small Business Administration says that 50% of small business owners will fail sometime during their first 5 years? There are lots of reasons but one big one is that owners don’t have a plan. Another is they have picked a product or service that doesn’t have a big enough market to sustain their business and sometime during their future they will run out of customers.

Now as I said, there are many other reasons too.

After graduating from college, I started out in manufacturing as an engineer in a pretty large company and now, 45 years later, retiring as a of Director of Manufacturing, I have discovered an awful lot about business. Not only did I learn and teach a lot about business, I worked with small business owners as well. I’ve learned that it comes down to this. Too many owners work hard in their business but less on their business.

Do you work on your business as much as you work in your business? Do you ever dream about having a good lifestyle but just haven’t quite figured out what to do about it. Have you ever thought about seeing what your business would need to do to give you those dreams? Developing a growth business plan could be the answer.

So, why should you make a growth business plan? Well in simple terms you need to know where you’re going and how and when you’re going to get there.

Some of the questions a growth business plan might ask you are:

– Are you comfortable that the market wants and is willing to buy your product or service?
– Is your product or service priced so it is competitive in your market?
– What’s different about your product or service? Why would a customer purchase it over someone else’s?
– Is your market big enough to support your business? What about 15 years into the future?
– If you wanted a better lifestyle, what would your business need to do to give you that lifestyle?
– How much sales would your business need to generate to give you that income?
– How much sales would your business need to generate to give you the income you want 15 years into the future?
– What will be the cost of your labor and material?
– What will your expenses run?
– How much will it cost to overcome the capacity constraints that will occur as your business grows to meet your income requirements?
– Will your profit give you the income you want in the future and at the same time maintain a healthy business for you as well?

If you develop a good Profit & Loss Statement for your existing business for the current year or for the first year of your proposed business, you can use this data to actually project how much sales you would need to yield the income you want and the profit margin you want. You can plan ahead as far as you want. Sound impossible? It’s actually pretty simple and can be pretty accurate plan.

A plan like this would show you how much sales your business would need to do, what your fixed and variable expenses would be, what your material cost, labor cost and profit would need to be to provide the income and profit margin you want. You can see pretty quickly if it’s possible for you to get your business to that level. I don’t know of any better way than to have your business give you the income and profit you want. What’s neat is you can determine what you want your income to be and your profit to be over the next few years and develop a plan that can show you exactly what your business would need to do to give you that income and profit.

And with just a little more data you can actually determine how many customers you would need for each year you plan for and how many leads you would need. From that you can actually determine what size market you would need and whether your market is big enough to supply those leads that could be converted into customers.