Let's look at the elements and purpose of a business plan and discuss whether you need one or not.
A business plan has three primary functions:
1. To serve as an Action Plan
2. To serve as a Road Map
Action Plan. A business plan can help to move you to action. A business plan will help you to pull apart the pieces of building a business and examine each piece by itself. So, instead of one large challenge, you have a sequence of smaller challenges. And by solving the small challenges, the large challenge is automatically solved. So, writing a business plan can help move you to action by breaking down a seemingly insurmountable task (building a business) into many smaller, less intimidating tasks.
Road Map. Once you have started your business, a business plan can be an invaluable tool to help keep you on track and moving in the direction you want to go. As you become more occupied with your magic business, it is easy to lose sight of your objectives and goals -a business plan can help to keep you focused. A business plan can also serve to help others to understand your vision, including suppliers, customers, employees, friends, and family.
Sales Tool. Perhaps most importantly, a business plan can serve as a sales tool. You may need outside financing to build your business, and a business plan is the tool you need to convince investors to come on board. You may also want and need concessions from suppliers or customers -- a business plan can help you get them.
Finally, you may need to convince family members, or even yourself, that your ideas will bear fruit. A well-written business plan can serve to sell people close to you on the benefits of proceeding with your concept.
I generally produce a combination of a Business and Marketing Plan. Don't worry; we will cover that in detail soon. A separate Business and Marketing plan would be helpful and perhaps necessary if and when you tackle an aggressive and expensive campaign such as a Casino Show or Major Tour. It will also be necessary if you are going to go after other large projects that may require outside financing and consideration to topics such as competition and cooperation with suppliers.
Here is an outline for a Business Plan to give you an idea of what it contains. There are many variations and some suit certain projects better than others. This will also provide you with a better general understanding of what they contain and when they are best utilized:
Business Plan Outline Executive Summary (2 pages)
Clear, exciting, and effective as a stand-alone overview of the plan Company Overview (1 page)
Business purpose, history, genesis of concept, current status, overall strategy and objectives
Product and Services (1 Page)
Description, features and benefits, pricing, current stage of development, proprietary position
Industry and Market Analysis (3 Pages)
Analysis of industry and marketplace in which company will compete Marketing Strategy (4 pages)
Strategy for addressing the needs of the marketplace with product/service
Development (2 pages)
Ramp-up of business, steps needed to get the business up and running
Operations (2 pages)
Plan for production and delivery of product or services, product cost, margins, operating complexity, resources required
Management (2 pages)
Background of key individuals, ability to execute strategy, personnel needs, organizational structure, who will execute plan
Summary of Financials (2 pages)
Summary of financial reports included in appendices, consistent with plan, effective in capturing anticipated financial performance
Offering (1 page)
Proposal / terms to investors (indicate how much you want), the ROI, structure of the deal, possible exit strategies
Appendices (no more than 15 pages)
• Any supplementary materials that support your plan
• Financial reports
• Assumptions, trends, and comparatives
• Cash flow statement
• Income statement
• Balance sheet
• Sources and uses of funds
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