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BUSINESS PLAN
(COMPANY NAME)
(COMPANY NAME)
(STREET ADDRESS)
(CITY, STATE ZIP CODE)
(CREATION DATE)
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TABLE O !O"TE"T#
$ntroduction%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%&
'%( E)ecuti*e #ummary%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%+
1.1 Business b!ectives......................................................................................................................................."
1.# $ission %tatement.........................................................................................................................................&
1.' (uiding Principles.........................................................................................................................................)
1.* +eys to %uccess.............................................................................................................................................)
,%( !ompany -escription%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%.
#.1 wnership.....................................................................................................................................................,
#.# -egal .orm....................................................................................................................................................,
#.' %tart/0p %ummary.........................................................................................................................................1
#.* -ocation and .acilities..................................................................................................................................1
/%( Products%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%0
'.1 Products2%ervices 3escriptions.....................................................................................................................1
'.# 4ompetitive 4omparison.............................................................................................................................15
'.' Product2%ervice %ourcing............................................................................................................................15
'.* 6nventory $anagement...............................................................................................................................15
'." 7arehousing and .ulfillment......................................................................................................................15
'.& .uture Products2%ervices.............................................................................................................................11
&%( 1ar2et Analysis%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%''
*.1 6ndustry 8nalysis.........................................................................................................................................11
*.1.1 $ar9et %i:e.............................................................................................................................................11
*.1.# 6ndustry Participants...............................................................................................................................11
*.1.' $ain 4ompetitors...................................................................................................................................1#
*.1.* $ar9et %egments....................................................................................................................................1#
*.# $ar9et Tests................................................................................................................................................1#
*.' Target $ar9et %egment %trategy.................................................................................................................1'
*.'.1 $ar9et ;eeds..........................................................................................................................................1'
*.'.# $ar9et Trends.........................................................................................................................................1'
*.'.' $ar9et (rowth........................................................................................................................................1'
*.* Positioning...................................................................................................................................................1'
+%( 1ar2eting #trategy and $mplementation%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%'/
".1 %7T 8nalysis...........................................................................................................................................1'
".1.1 %trengths.................................................................................................................................................1*
".1.# 7ea9nesses.............................................................................................................................................1*
".1.' pportunities...........................................................................................................................................1*
".1.* Threats.....................................................................................................................................................1*
".# %trategy Pyramid.........................................................................................................................................1"
".' 0ni<ue %elling Proposition =0%P>..............................................................................................................1"
".* 4ompetitive ?dge........................................................................................................................................1"
"." $ar9eting %trategy and Positioning............................................................................................................1&
".".1 Positioning %tatement.............................................................................................................................1&
".".# Pricing %trategy.......................................................................................................................................1&
".".' Promotion and 8dvertising %trategy.......................................................................................................1)
".".* 7ebsite....................................................................................................................................................1,
"."." $ar9eting Programs................................................................................................................................11
".& %ales %trategy..............................................................................................................................................11
".&.1 %ales .orecast..........................................................................................................................................11
".&.# %ales Programs........................................................................................................................................#5
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".) -egal............................................................................................................................................................#5
"., $ilestones...................................................................................................................................................#5
".1 ?xit %trategy................................................................................................................................................#5
3%( Organi4ation and 1anagement%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%,'
&.1 rgani:ational %tructure..............................................................................................................................#1
&.# $anagement Team......................................................................................................................................#1
&.' $anagement Team (aps.............................................................................................................................#1
&.* Personnel Plan.............................................................................................................................................#1
&." Board of 3irectors.......................................................................................................................................#1
5%( inancial Plan%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%,,
).1 6mportant 8ssumptions...............................................................................................................................##
).# %tart/0p 4osts.............................................................................................................................................##
).' %ource and 0se of .unds.............................................................................................................................#'
).* Brea9/?ven 8nalysis...................................................................................................................................#'
)." Pro!ections...................................................................................................................................................#*
).".1 Pro!ected Profit and -oss........................................................................................................................#*
).".# Pro!ected 4ash .low...............................................................................................................................#*
).".' Pro!ected Balance %heet..........................................................................................................................#"
).& Business @atios...........................................................................................................................................#&
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$ntroduction
%ay the term Abusiness planA and many small business owners and freelancers <uiver. The
stereotypical image is one of a complex document that re<uires enormous research and is time
consuming to create. However, there is a simple way to develop an effective business plan
without the struggle most people envision.
7ith FAST Business Plans, you have an easy/to/understand template that guides the process
every step of the way. 8s you go through this document, youBll discover precisely what to
include in each section of your plan to ensure it gets the results you need.
Please 9eep in mind whom youBre writing to while creating your business plan. 7hether youBreC
applying for a loan
securing venture capital funds
approaching new partners
considering significant purchases
selling your business
growing your business
communicating with management and staff
or have other reasons
D a business plan can 9eep you focused and on trac9.
6t is suggested that you read through the entire template first to get an idea of what information
you will need to have access to before creating your plan. Then, go bac9 through with data in
hand and develop your business plan from start to finish with your FAST Business Plans
template.
This business plan template can be downloaded in both P3. and $% 7ord format atC
httpC22www.fastbusinessplans.com2business/plan/template.html
.ree sample business plans are available atC
httpC22www.fastbusinessplans.com2sample/business/plans.html.
8rticles to assist in guiding you through the process of writing of your business plan are
available atC
httpC22www.fastbusinessplans.com2business/plan/guide.html
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'%( E)ecuti*e #ummary
8lthough the executive summary comes first in the business plan, it should be the last section
you write. Because it is the first to be read, it holds a significant amount of weight and should be
geared to capture your readerBs attention. 6f the executive summary fails to pi<ue interest, then
the rest of the plan most li9ely wonBt be read. This section should provide the reader with a thirty
thousand/foot view of what you plan for your organi:ation. 6n addition, you must also clearly
convey what is uni<ue about your businessC one element that could potentially ma9e or brea9 its
success.
?ssentially, the executive summary shows a synopsis of the following aspects of the planC
Business 6dea 2 0ni<ue %elling Proposition =0%P>
7or9ability, (oals and pportunities for the Business
.inancial 3ata =should show pro!ections for the first two years of operations, e<uity and
some detail of re<uired finance>
+eys to %uccess
These come in four sectionsC Business b!ectives, $ission %tatement, (uiding Principles and
+eys to %uccess that weBll cover individually below.
%tart this section with an overview of your business idea, introducing the company by name and
providing any relevant historical information. You should tal9 about the needs2wants of your
customers and how your business will meet those needs, including an overview of your uni<ue
s9ills and experience as they apply to the business. 3iscuss your overall approach to your
organi:ation, giving the reader an idea of how your business will operate. YouBll also want to
help readers create a clear picture in their minds of the company as a whole and its daily
operations. -astly, ma9e mention of the purpose of this business planC to get financing, provide a
detailed roadmap or serve as a general framewor9 to start your business =redefining the plan as
the business develops and grows>.
'%' Business Ob6ecti*es
7hile it is true that the ?xecutive %ummary is typically written after the rest of the
business plan is created, you may find it helpful to ma9e a first pass at this one section.
utlining your business ob!ectives will allow you to get your thoughts together and form a
basis for developing the rest of your business plan. You can then come bac9 to this section
of the ?xecutive %ummary when the rest of the plan is complete and update your business
ob!ectives.
Your business ob!ectives should be related to the mar9etplace, gross margins, revenue and
expansion. They also must be specific and measurableE otherwise, you canBt determine
how to reach your ob!ectives or 9now if2when youBve met them.
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#pecific / %hould be specific enough that you 9now clearly what the ob!ective is.
1easureable / Put a number on it so you will 9now when youBve achieved it.
Perishable / 3onBt ma9e time frames open/endedC put a time limit on your ob!ectives.
Typically, a year is a good goal.
Realistic / Your ob!ectives must be achievable with the resources and time you have.
7rite the ob!ectives in this formatC ob!ective, measurement and time. .or example,
increasing sales by '5F should be written asC
6ncrease sales =ob!ective> to G,55,555 =measureable> by the end of the third <uarter of
fiscal year #51# =time specific>.
The following are some typical examples of different types of ob!ectives used often in
business plans.
(ross $argins2@evenue2%ales
$ar9et %hare2Penetration
?xpansion into ;ew $ar9ets
Product2%ervice 3evelopment2?xpansion
Business Halue =net worth for resale of business>
Brand @ecognition
Brand -oyalty
@eputation
-ong/Term %urvival
3iversification
Profit $aximi:ation
(lobali:ation
%ocial 4hange2@esponsibility / 3evelop a new drug to cure a disease, develop a new
product that purifies water in developing countries, etc.
?nvironment
4ustomer %ervice
?mployee 7or9space
$ar9eting
Target $ar9et / How to connect with your customers.
'%, 1ission #tatement
The $ission %tatement outlines your organi:ationBs purpose or fundamental reason for
existence. The mission statement could be defined in terms ofC

Your Target 8udience =who are theyI>
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Products, %ervices or fferings
-ocation of Business, (eographic @egion
Technology
4oncern for %urvival
Philosophy =beliefs, values, aspirations and philosophical priorities>
%elf/4oncept =what are our strengthsI>
4oncern for Public 6mage
4oncern for ?mployees
'%/ 7uiding Principles
(uiding Principles are the Ten 4ommandments for your business. This is where you
define the principles for how business will be conducted. 6t can include statements related
to your product or service, your customers, your employees, shareholders, suppliers and
anyone else who will / in one way or another / interact with your business.
;umber six of (oogleBs philosophy =Ten Things We Know to be True> states, AYou can
ma9e money without doing evil.A %tarbuc9s third principle conveys, A7hen we are fully
engaged, we connect with, laugh with, and uplift the lives of our customers.A Be creative
as you thin9 about the principles that will define your business. They may be similar to, or
overlap, with your +eys to %uccess, and this is o9ay. There are many ways to present your
(uiding Principles. 7e highly recommend that you go online and loo9 at (oogleBs
philosophy and %tarbuc9s principles to get some ideas before writing your own. =You can
find them by doing a search.> Below are some examples.
'% Our !ustomers
Treat each customer as a friend, engaging them in a cheerful and happy manner, and
they will be a longtime customer.
,% Our #uppliers
Treat our suppliers as partners with an interest in ensuring that both our businesses
grow and succeed, and both will.
/% Our Products8#er*ices
3eliver a <uality product at a reasonable price along with exceptional customer
service and the business will succeed and grow.
&% Our #er*ice
?xceeding the level of service we expect to receive from others ensures our
customers will be happy and will help our business grow.
'%& 9eys to #uccess
7hat differentiates your business from othersI 7hy would your company succeed when
others that seem to be li9e it failI This section is where youBll define your uni<ueness.
Thin9 of it this wayC if a prospect found your company on (oogle, but also saw 15 more
pages of businesses that did what you do, why would they choose you over the restI 7hat
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ma9es you deserve their businessI 6n order to succeed, you have to ma9e it crystal clear to
your customers why you are the best choice.
Below are a few examples of +eys to %uccessC
!ustomer #er*ice / Providing a high level of customer service through clear and
fre<uent communications, flexibility in the way we conduct business and empowering
our customer/service representatives.
Establish Loyal !ustomers : $a9ing people feel as though they are our only
customer through personali:ed communications and going beyond the call of duty.
;igh:<uality Products8#er*ices : %elling only products2services that are of better/
than/good <uality. 7hen sourcing products2services, see9 out the best <uality.
Reputation : ?stablishing a reputation as an honest business with <uality
products2services and excellent customer service.
7ross 1argins : $aintaining gross margins in excess of "5F.
,%( !ompany -escription
Your company description should be a one/ to two/paragraph overview of the business that gives
the reader a clear picture of what your business is. There is no need to include information that
will be discussed in the subtopics below =wnership, -egal .orm, %tart/0p %ummary and
-ocation and .acilities>. You can include your business name, tag line =if any>, location and
website address.
,%' Ownership
This section contains a brief biography of the owners of the company and their individual
ownership sta9es2percentages. 6nclude relevant experience that each owner brings to the
business.
,%, Legal orm
6t is recommended that you consult a lawyer and an accountant to get details regarding the
different sorts of legal structures and which best suits your needs. 8lthough there are
many types of organi:ations, most small businesses are ordered as one of the five
following typesC
#ole Proprietor / $ost small businesses are started as sole proprietorships. This
is because they are the easiest and cheapest business type to set up. 7ith a sole
proprietorship, your organi:ation is typically in your own name or with a trade
name also called 3B8 =doing business as>. 0sing this company structure, all the
ris9 falls to you exclusively as the owner. This means your business and personal
assets are at ris9.
Partnership / 6n a partnership, two or more people have ownership in the
business. This is similar to the sole proprietorship as itBs easy to set up and there
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is personal ris9 =each of the ownersB personal assets could be vulnerable>. There
is the additional cost of having an attorney write a partnership agreement.
8lthough itBs similar to a sole proprietorship, a partnership may be ris9ier because
control of the business is shared by more than one person =one bad egg can bring
a struggling business down>. 6f youBre thin9ing of ta9ing this approach, choose
your partner=s> carefullyJ
!orporation / 4 4orporations and % 4orporations have various aspects. The
main advantage is that the owner is not exposed to any liabilities of his2her
personal assets.
#ubchapter # !orporation =# Type !orporation> / 8n % 4orporation offers the
same protection as the 4 4orporation but without the KdoubleL taxation =taxed at
both the corporate level and at the individual level>. 8ll profits are passed
through to its shareholders, who then report that as income on their individual tax
returns.
Limited Liability !ompany =LL!> / The --4 is a hybrid between the
partnership and corporation. 6t gives the owners the legal protection of a
corporation, but taxes them as if they were in a partnership.
,%/ #tart:Up #ummary
6nclude this section if your business is newE otherwise, you can disregard this section.
Here, you should provide information related to your new company, such as start/up
expenses, source of capital, identification of investors, necessary capital purchases, etc.
This section should only provide an overview of information related to the start/up. $ore
details will be presented in other sections of the business plan.
,%& Location and acilities
The people youBre communicating with through your business plan will have an interest in
the location of your company. 6n this section, describe the location of your business and
other details, li9e area particulars and rent typically charged in surrounding areas. The
ob!ective is to suggest a high traffic area in a good location that would produce a great
number of sales. ther statistics might include the number of businesses, hotels, hospitals,
schools and the population data of the area. These can help predict sales figures as well.
Tip: Use www.map-google.com to search the locality and get a map. Then get
demographic inormation rom www.census.go!.
/%( Products
/%' Products8#er*ices -escriptions
6n this section, you will detailC
7hat products2services youBre selling
7hy youMre offering the products2services youBve selected
7hat complementary products2services could help grow sales
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@esearch has shown that it is wise to offer a diversity of products2services. 6n addition, if
you provide items that correspond with your core inventory, you are more li9ely to
increase the si:e of orders2pro!ects and the overall number of sales. 8dditionally, a recent
study has shown that customers will spend more money on low/cost products2services than
higher/priced ones. 6f your initial offerings were to include those with significant price
tags, you may consider adding several for budget/conscious people.
"normational Websites: #$ational %etail Federation& www.nr.com' #"nternational Trade
Site& www.p-maps.org
/%, !ompetiti*e !omparison
Performing a competitive comparison is one of the most important steps in developing
your business plan. By identifying and analy:ing your competitors, youBll have a better
idea of what ma9es them successful and what wor9s against them. This then leads to a
further analysis of your own business to address these strengths and wea9nesses. You
should list and analy:e every ma!or direct competitor to your business along with at least
three indirect competitors.
8n indirect competitor is a business that provides a not/so/obvious solution to your target
mar9et that would still solve their problem or fulfill their need. .or example, you might
sell new automobiles. 3irect competitors would be other new and used car dealers. 8n
indirect competitor would be a motorcycle dealership.
.or each direct competitor, include the following in your analysisC
;ame and -ocation
%trengths and 7ea9nesses
$ar9et %hare =F or small, medium, large, etc.>
/%/ Product8#er*ice #ourcing
How will you be sourcing your productsI 7ill you manufacture them yourselfI 6f so, you
should discuss how youBll source the materials needed to manufacture your products.
-i9ewise, if youBre a service/based company, will you have your own staff or will you
subcontract labor from othersI 3iscuss methods of production or service delivery, product
or service development, <uality control, inventory control.
/%& $n*entory 1anagement
How much inventory is neededI 7hat is its valueI 7hy is that amount of inventory
appropriate for your business and locationI 7hat e<uipment and technology are necessary
to operate the businessI -ist your ma!or suppliers and discuss any terms they extend to
your business.
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/%+ ?arehousing and ulfillment
3oes your business re<uire you to warehouse inventory and fulfill orders or provide
servicesI 6f so, how do you plan to do thisI 7ill you outsource it or will you rent a
warehouse and hire wor9ers to fulfill orders and2or handle inventoryI =r will you wor9
from your garage and do it yourselfI> Typically, with new businesses itBs smart to start
small and then grow as the business grows. This limits your exposure and ris9.
/%3 uture Products8#er*ices
7hen starting a new business, or running an existing one, capital to invest into
products2services isnBt limitless. Because of this, you have to focus on the ones with the
most potential and then expand your line as the business grows. 6t is important that you
have a strategic plan for this area of your company. 7hat new products2services do you
plan to add in the futureI 7hen do you plan to add themI Nuestions li9e these need to be
addressed in this section.
&%( 1ar2et Analysis
The goal of this process is to research your sale venue and determine what the mar9et is for your
offerings. 6n short, you want to collect and analy:e an appropriate amount of information to
determine whether there is enough of a need2want for your products2services to support a viable
business and allow it to grow. %ome of the things youBll want to 9now include the mar9et si:e,
the growth rate of the mar9et, how the mar9et is trending, profitability and main competitors.
8ny data pertaining to your proposed mar9etplace should be included.
This information is further used to determine what products2services to invest in and how to
promote them. Be sure to do complete and thorough research for this section as it is critical to
the success of your business.
&%' $ndustry Analysis
6tBs time to do a bit of 6nternet/based research. There are many organi:ations on the 7eb
that are specific to industries that can provide valuable information regarding your industry
analysis. .irst, you should search the 7eb for trade associations and organi:ations that
pertain directly to your industry. They typically have a lot of good information.
8dditionally, two sources you can chec9 are .irst @esearch and Prime 6ndustry @eports,
both of which have a wide selection of industry reports available for a reasonable price.
.irst @esearch =www.firstresearch.com> has statistics and analysis for a wide range of
industries. Prime 6ndustry @eports =www.prime6ndustry@eports.com> offers data on
business ratios, benchmar9s and trends on both national and local levels.
&%'%' 1ar2et #i4e
You can find this information in the reports youBve already gathered for your
industry. 6f your product2service is very new and uni<ue, you may have to ma9e
some assumptions in determining the mar9et si:e. 6tBs best that you have hard
numbers for mar9et si:eE however, if you canBt do this, then scale it as best you can.
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6f you wor9ed from assumptions, then you should identify and explain them and
how they were used to determine your mar9et si:e. 3onBt !ust stic9 a number in this
section without providing the source of your information.
&%'%, $ndustry Participants
This section should provide an overview of the competition in your mar9et. ;o
need to list specific competitors, as theyBll be provided in the next section. @ather
you should generali:e the competition =i.e., supermar9ets, big/box resellers, hair
salons, certified public accountants, etc.>. 6t is also helpful to discuss the buying
patterns of your target mar9et. How and where do they purchase these
products2services fromI This will also help you to hone in on the industry
participants and determine which are relevant and which arenBt.
&%'%/ 1ain !ompetitors
6dentify a minimum of three main competitorsE include a brief summary about each
one. 3iscuss how they mar9et their offerings. =6s it offered as a service, through
retail outlets, online, etc.I> 6nformation youBll want to mention includes their si:e,
number of locations, website address and anything else that will help you to
understand their businesses better.
&%'%& 1ar2et #egments
$ar9et segmentation helps you to approach your specific customers by brea9ing
down your target mar9et as a whole into specific segments. This allows your
mar9eting and sales strategy to focus on the people that are most li9ely to purchase
your offerings.
$ost businesses have more than one mar9et segment. .or example, if you sold
nutritional supplements, you would have several mar9et segments that you would
mar9et to differently. These might include women, men, the young, older people,
professional bodybuilders, athletes, average people who exercise to maintain good
health. You should identify and understand each segment so you can create a
mar9eting approach perfectly suited to every one. %ome mar9et segment
considerations includeC
3emographics =age, gender, income, marital status, etc.>
(eographic -ocation =local, international, regional, country, etc.>
-ifestyle =thrifty, upscale, etc.>
%pecial 6nterests =hobbies, etc.>
&%, 1ar2et Tests
Testing is an excellent course of action in order to reduce your ris9 when entering a new
business or mar9et. 8 mar9et test can be conducted at a relatively low cost. .or instance,
you can order or produce small <uantities of your product and see if consumers vote for it
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with their credit cards. 6Bve even heard of someone who developed a website for their
product without actually having produced the product, then when someone ordered, they
would apologi:e and say the product was out of stoc9.
8nother idea is to ta9e your product to other resellers, such as small mom/and/pop shops,
and put your product for sale there through consignment. The importance of a mar9et test
is to see if there is a desire for your product or service without going to full production and
developing the entire infrastructure necessary to sell the product or provide the service.
&%/ Target 1ar2et #egment #trategy
;ow that youBve identified the mar9et segments, you need to decide which one to target.
You may choose one or opt for several segments. 6n this section you should be prepared to
identify your target mar9et segment=s> and explain in detail your reasoning for the choices
you made. This will not only help you prevent targeting the wrong mar9et, but will also
instill confidence in potential investors that your decision/ma9ing process is sound.
&%/%' 1ar2et "eeds
Here, you want to identify the needs for the target mar9et segment=s> youBve chosen.
You should provide a paragraph discussing the overall mar9et need and a bulleted
list of specific needs.
&%/%, 1ar2et Trends
3iscuss how the mar9et has changed leading up to today and how it is expected to
trend in the future. 3iscuss how this affects your target mar9et segment=s>.
&%/%/ 1ar2et 7rowth
Present historical and future growth for your target mar9et segment=s>. The
historical numbers will lend credibility to your future growth pro!ections.
&%& Positioning
Positioning involves ascertaining how a product, service or company is perceived in the
minds of consumers.
+%( 1ar2eting #trategy and $mplementation
6n this section, youBll want to provide a summary of your overall mar9eting strategy and details
on how you plan to implement it. Present it as a 9ind of executive summary by writing a couple
of paragraphs that give a synopsis about your overall approach. 6t should highlight the ma!or
points presented below.
+%' #?OT Analysis
%7T stands for strengths, wea9nesses, opportunities and threats. 8 %7T analysis is a
method for strategic planning that evaluates these four elements as they relate to your
business ob!ectives. 7hile performing the %7T analysis, youBll want to identify the
internal and external factors that are favorable and unfavorable to your company
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ob!ectives. This not only helps you loo9 at the business ob!ectively, but also helps in
devising the mar9eting strategy and the positioning you intend to adopt.
#trengths / Your internal advantages =those within the company>, compared to
others, which will help you achieve your business ob!ectives.
?ea2nesses / Your internal shortcomings in the business that can potentially
prevent you from achieving your business ob!ectives.
Opportunities / ?xternal conditions =those outside the company> you see that will
help you to achieve your business ob!ectives.
Threats / ?xternal conditions that could potentially prevent you from meeting your
business ob!ectives.
The first two are internal to the businessE whereas, the last two are external in the sense
that they are related to the mar9et and the competition. .irst, you develop a list of your
strengths, then wea9nesses. 8fterward, you compile a list of external opportunities and
threats to the business. 8fter ma9ing the list for each of the four factors, youBll summari:e
them to have a clear picture of the important points from each of the sections. The goal is
to draw a verbal picture that demonstrates what strengths and opportunities you can ta9e
advantage of while overcoming or avoiding wea9nesses and threats internally or within
your mar9etplace.
+%'%' #trengths
6nternal strengths are those found within your company. They give you an
advantage that other organi:ations may not have. Perhaps you have previous wor9
experience that gives you a business advantage. r you have an innovative new/
patented product. -ocation of your business, your mar9eting s9ills, manufacturing
approach, well/9nown brand, financial resources, 9ey staffD all of these could be
considered strengths. -ist each one.
+%'%, ?ea2nesses
3evelop a list of your internal wea9nesses, which are the wea9nesses inherent to you
or your business. You need to be aware of your wea9nesses when creating your
business plan, so they donBt negatively affect your li9ely success. .or instance, if
youBre wea9 in mar9eting, you may choose to outsource your promotions or hire
someone who has a strong bac9ground in this area. 7hen identifying your
wea9nesses, loo9 for areas where you can improve. ?xamples of wea9nesses are the
location of the business, low/<uality products, negative branding =poor reputation>,
little experience with this type of business, or high product and2or overhead costs.
+%'%/ Opportunities
pportunities are openings in the mar9etplace that you can leverage to your
advantage. .or instance, there may be a new niche that is developing that you can
enter. r there may be an opportunity available due to a large company leaving a
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mar9et, new demographic for your product or service, new technology that allows
you to produce products or deliver services faster and cheaperD these and countless
others are possible opportunities for you.
+%'%& Threats
4ompetitors can undercut your price because they are able to purchase wholesale at
a much lower price due to volume discounts. These companies have a much larger
mar9eting budget as well, which poses a threat. ther ha:ards might come later on.
.or instance, you might enter a new niche that has been ignored by larger
companies. 7hile success comes almost instantly, larger companies may follow suit
and enter the same mar9et. They stand a good shot at ta9ing a large share of business
in this case. ne example is 7almart deciding to sell a competing product at a
discount in their stores. ;ew regulations or import tariffs could also threaten your
business. 4ompile a list of anything or anyone you can thin9 of that would
potentially pose a ris9 to your company.
+%, #trategy Pyramid
8 strategy pyramid is a method used by many businesses to help to achieve their strategic
goals. 8t the top of the strategy pyramid, you have your main business strategy. This is
basically a strategic goal that you want to achieve. 8t the next level are the tactics youBll
use to achieve your strategy. .or example, if your plan is to grow your 7eb business, your
tactics may be to develop a more robust and user/friendly website, build awareness of your
website and develop an online customer base.
8t the bottom of the strategy pyramid, you list the methods youBll use to carry each tas9
through to completion. (oogle 8d7ords advertising campaigns are a good example.
They would support your tas9 of building awareness of your website. 8nother may be to
produce new, improved images of all your products or to write better copy for all your
product categories on the new website.
7hen developing your strategy pyramid, limit yourself to three or four strategic priorities.
6f you develop any more, youBre li9ely to lose focus and not achieve any of your goals.
+%/ Uni@ue #elling Proposition =U#P>
8lso 9nown as the value proposition / the uni<ue selling proposition =0%P> is the aspect of
your business that differentiates it from businesses similar to yours. 6n essence, itBs what
ma9es your business special.
8lthough most businesses should imitate other successful businesses, they also need to
provide something uni<ue and valued by potential customers in order to succeed. The 0%P
should address an obvious void in the mar9etplace that you can actually fill. Beware that
you donBt promise too much, as itBll be difficult to deliver if you overpromise. +eep in
mind that youBll need to clearly convey your 0%P through both your mar9eting and day/to/
day operations in order to ma9e your business successful.
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+%& !ompetiti*e Edge
7hat can you offer which is more competitive than what your competition offersI 3o you
offer better <ualityI -ower pricesI Better serviceI 8 safer productI Better styleI 7hile
the 0%P defines what you offer that other similar businesses donBt, your competitive edge
compares what you offer to similar products or services that your competition also brings
to mar9et. .or instance, letBs say you have a new method of manufacturing that lowers
your production costs. This gives you a competitive edge over your competition by
allowing you to sell your product at a lower price than they do. 4ompetitive edge is an
apples/to/apples comparison.
+%+ 1ar2eting #trategy and Positioning
;ow that youBve identified your target mar9et and the segments within, you need to
develop a mar9eting strategy. Your plan and positioning should address each of these
segments.

There are three popular types of mar9eting strategiesC product differentiation, cost
leadership and focus strategy. $ar9eting strategies are executed through positioning =or
the message strategy>, which is used to communicate the aspects of the business you want
to highlight to the target consumers.
These three types of mar9eting strategies includeC
1. Product differentiation that uses the following positioning approachesC
a> Product / This could be the uni<ueness of the product li9e design, origin, service,
features, options, etc. r perhaps a special sort of pac9aging, service or range.
b> Price / 3irected toward status and prestige, hence high/priced brand.
c> -istribution / 3istributor service or distributor location.
d> 1ar2eting !ommunications / 4onnecting the brand with some celebrity or
spo9esperson.
#. !ost leadership strategy uses low/price positioning.
'. ocus strategy is positioning that caters to the needs of a narrow mar9et.
+%+%' Positioning #tatement
The positioning statement tells the world who you are, what business youBre in, what
mar9ets you serve, who you compete against, what benefit your products or services
offer and also states how youMre different from your competitors. To be effective,
your positioning statement should be clear and concise. Be sure to limit yourself on
how many benefits you include. 6f you include too many, youBll lose your focus and
wonBt have an effective positioning statement.
+%+%, Pricing #trategy
The pricing strategy may seem li9e a straightforward topicE however, it re<uires
much thought and planning when starting a business and throughout the life of your
company. Here are some typical pricing strategiesC
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!ompetition:Based Pricing / Prices based on your competitorsM prices.
!reaming or #2imming / %etting a high price to sacrifice volume for high
margins.
Loss Leader / Pricing a few products at below mar9et value in order to get
customers to ma9e additional purchases that hopefully will include higher/
margin products.
Penetration Pricing / Pricing the product so you can <uic9ly enter an
established mar9et.
Premium Pricing / %etting the price artificially high, giving the customers
the perception that this high/priced item must be much better than other
similar products. Typically, you want to set prices at whole numbers, such as
G&".55, G'5.55, G1".55 rather than G&*.11 or G#1.1".
Predatory Pricing / Pricing low in order to force the competition out of the
mar9et.
Psychological Pricing / Pricing the product so it seems li9e a lower number
=i.e., G*.11 versus G".55>.
-ynamic Pricing / .lexible pricing that can be based on a number of mar9et
conditions, timing or other circumstances. 8n example of a partial
implementation of this is having daily discounted products.
;igh:Low Pricing / Prices are set artificially high and then discounts, sales
and other promotions lower the prices, giving the consumer the perception of
getting a good deal. This is seen <uite often in !ewelry stores.
Premium -ecoy Pricing / ne itemBs price is set artificially high in order to
drive sales of lower/priced items.
+%+%/ Promotion and Ad*ertising #trategy
;ow itBs time to decide how youBre going to mar9et your business. Your promotion
and advertising strategy should target your demographics at the lowest cost per
conversion. 6n other words, you want to pay the least amount possible to bring in
one new prospect through a means that wor9s. You might try word of mouth, for
example, which is free. But if that method doesnBt bring in any new customers, it is
useless to you =it does not convert loo9ers into buyers>. n the other hand, you
might try mailing postcards or brochures to prospects. You could pay G15 per new
client, but have them coming in by the buc9et/load. This method would, therefore,
outperform the other.
You want to be sure youBre targeting the right audience and that youBre reaching them
in a meaningful wayE otherwise, youBll waste a lot of effort, time and money. Here
are some examples of typical promotions and advertisementsC
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?ord of 1outh / Provide products and services such that your customers
will spread the word and bring more customers to you.
Pay Per !lic2 =PP!> Ad*ertising / Pay each time a prospect clic9s your
9eyword/related ad on a search engine.
Affiliate 1ar2eting / ther people sell your products2services in return for a
commission. This is usually an online method, but can also wor9 offline.
orums / Participate in forums and discussion groups relative to your target
mar9et in order to position yourself as an expert and attract new business.
Print Ad*ertising / 8dvertising in newspapers and maga:ines.
Broadcasting / $ar9eting through radio ads and2or TH commercials.
Aideo / Producing short videos to place on your website, YouTube or other
websites.
-irect 1ail / Bul9 mailing either directly to potential customers or by
including a postcard in a value/pac9/type mailing.
Outdoors / Through billboards, sponsorships of sports teams, on public
transportation, etc.
#po2esperson / 0sing a well/9nown, or uni<ue and memorable,
spo9esperson to represent your business2products.
E*ent 1ar2eting / ?xhibiting at tradeshows, fairs and other community
events.
You should be specific in your promotion and advertising strategy. 3onBt !ust say
youBre going to use (oogle 8d7ords for advertising. 3efine what your 9eywords
are, target price per clic9 and monthly budget. ?xplain why this is one of your
chosen strategies for advertising. Provide as much information as possible because
investors will be very interested in how you plan to promote and advertise your
business.
+%+%& ?ebsite
The days of businesses not having websites have passed. ;o matter what type of
business you have, you must have a 7eb presence. This section should discuss what
your 7eb presence will be and how you plan to leverage it. You should define the
purpose of your site =usually either informational or ecommerce>. 3ocument where
your website will be hosted =i.e., third party/shared hosting, third party/dedicated
server=s>, server on your local networ9, etc.>. 3iscuss what software youBll use for
your website, who and how it will be customi:ed and maintained, and all special
features it will have =i.e., affiliate module, product reviews, configurable products,
clients/only section with forms2information, etc.>. Having a 7eb presence doesnBt
stop at your websiteC it extends well beyond and reaches out into the 6nternet. Here
are some examples of other considerations for your 7eb presenceC
#ocial 1edia / 0se .aceboo9 and Twitter to reach out to your customers.
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Blog / @egularly updated blogs with helpful and interesting information
related to your product or service.
orums / $oderated discussions related to your products2services. This is
popular for companies providing software, as users often loo9 for answers to
their <uestions in the forums.
7oogle #hopping / .ree way to list your products in (oogle searches.
Third Party ?ebsites / -ist products on third party sites such as
8ma:on.com.
8gain, donBt !ust state what you plan to do. 3iscuss it in detail. .or example, if
youBre going to include a blog, define the topic of the blog, who will be responsible
for updating it and how fre<uently it will be updated. 8 7eb presence ta9es a lot of
wor9, so plan ahead in order to avoid it being neglected.
+%+%+ 1ar2eting Programs
Your mar9eting programs should be based on the promotion and advertising
strategies you outlined previously. 4reate a separate mar9eting program for each of
your promotion and advertising strategies. 3iscuss the methodology and include the
budget, person managing it and a clear set of ob!ectives tied to a timetable for each
mar9eting program.
+%3 #ales #trategy
The difference between a mar9eting strategy and sales strategy is that the mar9eting
strategy describes how youBre going to reach out to potential customers. Your sales
strategy defines how youBre going to interact with potential customers once theyBve entered
your store2office, visited your website or otherwise made contact with you. 8 good sales
strategy should address how youBre going to win over a difficult customer.
6f you run both an online and a bric9/and/mortar company, then you should address each
of these separately. -etBs loo9 at an example sales strategy for a 9ios9 in a mall selling
s9in/care products. You might choose to locate the 9ios9 in a high/traffic area of the mall
and have salespersons directly approach shoppers to offer demonstrations. This way, you
could show shoppers firsthand how effective the product is on the potential customersB
hands. 8n example of an online business selling high/end candies may be to offer free
samples when visitors subscribe to your mailing list. You can then follow up with those
persons and ma9e additional sales.
+%3%' #ales orecast
8 sales forecast should be realistic, achievable and have milestones defined in both
time and dollars. 6nclude a short paragraph or two giving an overview of your sales
pro!ections along with the basis for those figures. 8lso, be sure to include a chart
showing your monthly sales over a 1#/month period and a table showing annual
forecasts for three to five years.
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Table +%3%' Annual #ales orecast
Year 1 Year # Year '
+%3%, #ales Programs
$anaging the sales department of your company will re<uire having a few sales
programs in place. %ome things to consider are sales metrics =to measure
effectiveness of salespeople and methodologies>, payroll for your sales staff =hourly
or commission based>, materials and resources needed by your sales team, and a
budget for these materials and resources. You may also include charts and schedules
for prospect follow/up, incentives for salespersons and training re<uirements,
schedule and budget, !ust to name a few. Oust as your mar9eting department has
programs to manage its initiatives, your sales department should have the same.
+%5 Legal
@esearch and understand all legal issues pertaining to starting up and operating your
organi:ation and then document them in this section. This may include licensing, bonding,
permits, insurance, :oning, government regulations, patents, trademar9s, copyrights, etc.
+%. 1ilestones
8ll businesses have milestones they wor9 toward achieving. 3efining your milestones in
your business plan helps to ensure you 9eep your business on trac9 and that you can
measure the successfulness of your business.
Table +%. 1ilestones
$ilestone 3ate
+%0 E)it #trategy
?veryone starts a new business expecting success, and many times dreams do come true.
However, there are times when a business idea doesnBt prove to be profitable enough to
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base a business on, or youBve lived your dream and are ready to move on. 6n order to limit
your exposure to excessive debt, itBs a good idea to have an exit strategy when you start the
business. 6n this section, you should identify what would trigger an exit from the business
=sales revenue below Gxxx, margins of Gxxx, retirement, selling to someone else, etc.> and
how you will accomplish that exit. Nuestions pertaining to inventory li<uidation, business
closings, selling the business, compensation and severance pac9ages for employees, etc.
should be addressed.
3%( Organi4ation and 1anagement
6n this section of the business plan, be prepared to cover the people portion of your organi:ation.
ne of the 9eys to the success of a business is its people, and the planning of your personnel
should be given great and careful consideration.
3%' Organi4ational #tructure
Provide an organi:ational chart showing your companyBs structure. 8s with most small
businesses, you may have one person filling multiple roles, and this is acceptable. %how
each person in relation to their duties even if a single person performs more than one set of
responsibilities.
3%, 1anagement Team
.or each person in your management team, include a one/paragraph biography and then a
paragraph that discusses what they bring to the company as far as experience, strengths,
education and other s9ills. ;ext, provide a paragraph about what their role is and the
re<uirements of that role.
3%/ 1anagement Team 7aps
$ost start/ups have limited resources. This section identifies and details areas where the
management team lac9s s9ills and experience. .or each management team gap, discuss
how youBll overcome the challenge. .or instance, if your team doesnBt have accounting and
financial experience, you may turn to a financial planner or 4P8 to fill that gap.
3%& Personnel Plan
This section identifies how youBre going to staff your business. 6dentify the personnel
re<uirements for your business along with a table showing the budget re<uirements for
each position over the next three to five years.
Table 3%& Personnel Plan
Position Year 1 Year # Year '
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Total Personnel 4osts
3%+ Board of -irectors
6f your business is incorporated, identify the members of your board of directors in this
section. 6nclude a brief biography for each board member. 6t is acceptable to have the
same person serve in more than one directorBs role.
5%( inancial Plan
The financial plan will cover the followingC
@e<uired 4ost of %tart/0p
Profit and -oss
4ash .low
Balance %heet
.inancial @atios
Profit and loss shows the profitability of the business, whereas balance sheet outlines the
financial position of the company. 8lso, cash flow details the status of cash received and paid
over a specified period of time. These entire documents are re<uired to get financing.
5%' $mportant Assumptions
8ll financial plans are based on a number of assumptions. 6n this section, you should list
the assumptions your financial plan is based on. %ome examples includeC
Your ability to hire staff at an estimated hourly rate of Gx.xx.
4ustomers purchasing products because Pfill in the blan9Q.
8 conversion rate of xF using PP4 advertising that results in Gx.xx in
sales for every G1 spent in advertising.
The ability to negotiate a discounted rent for the storefront.
5%, #tart:Up !osts
Trac9ing expenses is an important responsibility for small companies. 6n this section,
youBll want to itemi:e all expenses associated with starting your business and operating it
for the first month. Begin with expenses, then current assets with no depreciation and then
long/term assets that will have depreciation value. 3epreciation will be included after the
first month.
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Table 5%, #tart:Up !osts
%tart/0p ?xpenses 8mount
Total %tart/0p ?xpenses
%tart/0p 8ssets
Total %tart/0p 8ssets
Total @e<uired %tart/0p 4osts
5%/ #ource and Use of unds
6dentify the source of the money you need to start your business and how that money is
going to be used. .or example, you may be getting a line of credit with the ban9 that youBll
use to purchase inventory, paying the line of credit down in between orders. %ome of your
start/up assets may be financedE whereas, other on/time start/up costs may be funded using
your personal savings. 6f your organi:ation is incorporated, the sale of shares of stoc9s to
principals may also be a source of funding.
5%& Brea2:E*en Analysis
Businesses need to generate a certain number of sales dollars before they can brea9 even.
This is because there are typically large, fixed/price monthly expenses that need to be
covered before you can start earning a profit. .or example, you need to reach a sales
threshold before paying monthly rent, payroll, utilities, advertising and other ongoing
expenses. 8s the business grows, these monthly expenses may also grow / advertising
may increase, you may need a larger storefront or additional employees, insurance rates
may rise, etc. 8dditionally, you have variable costs such as purchasing the products you
sell. Be sure to include all fixed and variable costs in your brea9/even analysis. This
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report should be presented in a graph format that shows the sales along the hori: >axis> and profit2loss along the vertical =y/axis>.
5%+ Pro6ections
There are three 9ey pro!ections needed for this sectionC profit and loss, cash flow and
balance sheet. .or a start/up, business figures have to be pro!ected for all of the above
financial statements =called pro forma statements>. The term Apro formaA means provided
in advance. You should consult your accountant or financial advisor when ma9ing
pro!ections. The sample tables here are not all/inclusive and are presented as examples to
be used only as a starting point.
5%+%' Pro6ected Profit and Loss
The profit and loss statement details the income and sales of your company over a
specified period.
Table 5%+%' Pro orma Profit and Loss
Pro .orma Profit and -oss Year 1 Year # Year '
6ncome
%ales
4ost of (oods %old
(ross Profit
?xpenses
Payroll
@ent
0tilities
3eliveries and .reight
6nsurance
Payroll Taxes
8dministrative ?xpenses
8dvertising
$isc. ?xpenses
Total ?xpenses
;et Profit
5%+%, Pro6ected !ash low
The statement of cash flow shows the incoming and outgoing cash of the business.
Table 5%+%, Pro orma !ash low
Pro .orma 4ash .low Year 1 Year # Year '
4ash @eceived
4ash from perations
4ash %ales
4ash from @eceivables
%ubtotal 4ash from perations
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8dditional 4ash @eceived
%ales Tax
@ental 6ncome
%ubtotal 4ash @eceived
?xpenditures
?xpenditures from perations
4ash %pent
Bills Paid
%ubtotal %pent on perations
8dditional 4ash %pent
%ales Tax
-oan Payment
%ubtotal 8dditional 4ash %pent
;et 4ash .low
4ash Balance
5%+%/ Pro6ected Balance #heet
The balance sheet provides an instant financial picture of your business. 6t has two
sectionsC assets, and liabilities and capital.
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Table 5%+%/ Pro orma Balance #heet
Pro .orma Balance %heet Year 1 Year # Year '
8ssets
4urrent 8ssets
4ash
8ccounts @eceivable
6nventory
ther 4urrent 8ssets
Total 4urrent 8ssets
-ong Term 8ssets
-ong Term 8ssets
8ccumulated 3epreciation
Total -ong Term 8ssets
Total 8ssets
-iabilities and 4apital
4urrent -iabilities
8ccounts Payable
4urrent Borrowing
ther 4urrent -iabilities
%ubtotal 4urrent -iabilities
-ong Term -iabilities
Total -iabilities
Paid 6n 2 6nvested 4apital
@etained ?arnings
?arnings
Total 4apital
Total -iabilities and 4apital
;et 7orth
5%3 Business Ratios
You should state the %tandard 6ndustrial 4lassification =%64> code that is used for your
industry profile ratios. Your ratio/analysis table will typically be based on the information
youBre able to find on your business. The one provided below is an example of common
ratios.
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Table 5%3 Ratio Analysis
@atio 8nalysis Year 1 Year # Year ' 6ndustry
Profile
.inancial @atios
Nuic9 @atio
4urrent @atio
4urrent -iabilities to ;et 7orth
4urrent -iabilities to 6nventory
Total -iabilities to ;et 7orth
.ixed 8ssets to ;et 7orth
4ollection Period
6nventory Turnover
8ssets to %ales
%ales to 7or9ing 4apital
8ccounts Payable to %ales
@eturn on %ales
@eturn on 8ssets
@eturn on 6nvestment
6nterest 4overage
6ncome %tatement
;et %ales
(ross Profit
perating 6ncome
;et Profit 8fter Tax
Balance %heet
4ash
8ccounts @eceivable
6nventory
Total 4urrent 8ssets
Total .ixed 8ssets
ther ;on/4urrent 8ssets
Total 8ssets
8ccounts Payable
Total 4urrent -iabilities
Total -ong Term -iabilities
;et 7orth
This business plan template can be downloaded atC
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.ree sample business plans are available atC
httpC22www.fastbusinessplans.com2sample/business/plans.html.
$any articles to assist in guiding you through the writing of your business plan are available atC
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