Your mission. What is your driving goal every day? Don’t simply write, “Make money. ” Identify how you will make money. For example, you can write: “Our mission is to offer residents of the Lakeview neighborhood the best day spa experience in the Near North Side of Chicago. We are committed to providing value and quality in a fun atmosphere that is never predictable. ” Your goals. For example, a day spay might have the following goal: “To attract a minimum of 35 customers each day in the first year of operations. ”[2] X Research source Make your goals as concrete as possible. Description of the industry. Explain whether the industry is growing or poised for growth in the short and long term. The factors that will drive your success. How will you set yourself apart? For example, “You All Day will separate itself from the pack based on the owner’s deep experience running a day spa in Seattle for ten years. This experience includes familiarity with successful marketing techniques and trends analysis. ” Your legal form. Are you a sole proprietorship, partnership, limited liability company (LLC), or corporation? Also explain why you selected this form.
You can search for industry information in other places. For example, talk to people in your industry at trade shows. Also search online. Many industries have trade associations, which have websites with information. [3] X Research source For example, when analyzing the day spa industry, you might want to talk about how it is growing because more upper-income men in urban areas are visiting. (If that’s true). By analyzing the industry, you gain insight as to your likely target market and how you can reach them.
Age. What is the average age of your likely customer? If you don’t know, then visit similar businesses and note the ages of the clientele. Gender. Will men or women—or both—primarily use your products or services? Location. Generally, your market will be located near your business. However, if you have a web-based business, your target audience could have no geographic boundaries. Income level. Occupation. For example, a day spa might target stressed-out white collar professionals. Education level. There is often a link between education, income, and occupation—though not always. For example, a discount bookstore might target an educated audience that nevertheless has a lower income.
To find competitors, look in the phone book and do a general Google search. Make sure to read their website and stop into the business. If you’re opening a restaurant, you’ll want to see a sample menu, as well as the hours of operation. Also identify indirect competitors. [5] X Research source For example, a day spa is competing with more than other spas. You also compete with any business that offers relaxation, such as massage parlors or meditation centers.
Name of your competitor. What you offer that they don’t. Think about products and services, but also location, ease of ordering, etc. What will make the consumer experience different at your business? What they offer that you don’t. Identify why you don’t offer their products or services. For example, they may be serving multiple niches while you are focused on only one. Alternately, they may have a favorable location.
Whether you will sell pizza by the slice, as whole pies, or both How big your pizzas will be What toppings your customers can offer If you will have take-out and delivery options What other food items will be sold
What type of advertising or promotion will you use? How often will you use paid promotion? What other promotion other than paid advertising will you use? For example, you might use social media, professional networks, etc. Will you create a logo and use it on cards, letterhead, websites, etc. ? How large will your promotional budget be?
State how much you expect to pay each employee in your first three years of business. [9] X Research source Also name your professional support, such as your business lawyer, accountant, and insurance agent. Professionals are independent contractors you use but don’t employ. Calculate how much you expect to spend on each professional.
You might write: “Lisa Jones is the sole proprietor of You All Day and will run day-to-day operations. As a certified massage therapist, she ran the Relax! chain of day spas in the Greater Seattle area for ten years. A former accountant, Lisa has an MS in accounting from the University of New Hampshire and worked as a CPA briefly before going into the spa business. ”[10] X Research source If you are asking for a loan, then include resumes for each owner. You can put them in the appendix at the end of the document.
You should create professional-looking financial statements using a spreadsheet. You’ll have to gather quite a bit of information to make the financial statement. For example, you will need information on your assets, investments, and personal debts. You might also want to get a free copy of your credit report and review it as you draft your business plan.
Common startup costs include insurance, licenses, equipment, advertising, and employee expenses. [11] X Research source Also identify the source of the startup capital. For example, if your startup has three initial owners, state how much each is contributing to the business and their ownership percentage. [12] X Research source If you need financing, state how much. Include the terms of any proposed loan.
You’ll need to make some assumptions in order to come up with a forecast of sales. You should explain these assumptions in your business plan. [14] X Research source For example, you can write, “We assume continued interest in day spas in the Chicago area. ” Another assumption is the overall health of the economy. “Although the Chicagoland economy has grown more slowly than other regions of the country, we assume that the Chicago economy will grow on par with other large metropolitan areas in the coming decade. ” You can also include a four-year projection, though this is optional.
Also talk about how you will build up your cash reserves. For example: “In addition to normal cash flow, we will focus on obtaining sufficient cash reserves for emergencies. These reserves include a line of credit with a bank, which we can use when business is slow. We will also invest excess cash in certificates of deposits at our bank. ”[16] X Research source
Fixed costs: these don’t vary depending on your sales volume. For example, your rent, employee salaries, and insurance are fixed costs. Variable costs: these fluctuate depending on your sales and include shipping, inventory, and manufacturing costs.
Add a cover page to your document. You can title it “[Company Name]’s Business Plan” or “Business Plan for [Your Name]. ” If you have a logo, include that too.
For example, you can write, “You All Day is a start-up dedicated to providing men and women in Chicago a high-quality day spa experience at an affordable price. We specialize in pedicures, manicures, massage, and herbal aromatherapy. The Near North Side of Chicago has grown substantially over the past 20 years, with young, educated millennials settling in to start families. This area is currently under served, and we hope You All Day can meet the demand of the local market. ”[21] X Research source
Executive Summary Company Description Industry Analysis Market and Competition Products and Services Marketing and Sales Plan Operations and Management Financial Forecasts Exhibits/Appendix
Review for typos and other errors. An accountant should check your numbers to make sure they are accurate. [23] X Research source Analyze the overall presentation. Is the information crammed in so that the document is tiring to read? If so, spread out the information so that there is a lot of white space on each page. You can also show the plan to a business adviser. If you live in the U. S. , you can show it to someone at your nearest Small Business Development Center, which provides help drafting business plans. You can find your nearest SBDC by visiting this website: https://www. sba. gov/tools/local-assistance/sbdc.
You might want to include tabbed partitions between each section of your business plan. This will make it easier for someone to flip through it and find what they are looking for.
