Putting It All Together
What Goes Into the Business Plan?
Well, by this point, you’ve already answered all the questions with the previous sections.
As a summary, here is the information you need:
Questions Answered By a Business Plan
- A. What kind of business would you like to run?
- B. Who, exactly, will you be selling it to? (Be as specific as you can realistically be.)
- C. What products and services are out there in the market already for this audience?
- D. Is there an area in the market not being covered by others, or an area you think you could serve better than others?
- E. What do you propose to sell to this gap in the market?
- F. How much will your products or services cost?
- G. How much will you need to spend to produce it?
- H. How will you handle ordering and payment?
- I. What other resources or equipment do you need to produce and fulfill your orders (outsourced or in house)?
- J. Where would you like your business to be in the next 3 years? Specifically, think about the ways it could grow, the markets you could expand into, the places you could sell and/or be stocked, etc.
- K. If you were pushed by an investor to guess how well your work would sell for the next three years, and you wanted them to take you seriously, what would be your best educated guess?
- L. At your best guess, what is the maximum number and value of orders you could fulfill in a given year?
How Should the Business Plan Sections Be Ordered?
Once you’ve thought through all the questions above, you can use that information to start building your business plan.
Below are some typical sections for a business plan. You may find some are more relevant to what you’re doing than others, but there should be some thought put into every section if possible.
Also note that if you find any of the sections becoming longer than 1 page, then adding a short Section Summary at the beginning of that section can help make for easier reading.
1. Executive Summary
– This is the last section you will write, after all the rest has been written. It is designed to take everything you’ve written, and summarise it in a few paragraphs.
Within the executive summary you will find:
- The Executive Summary – That’s the written part mentioned above.
- Mission Statement – This one is your best attempt to summarise what your company is all about in one sentence. Yes, I know that’s a crazy idea, but these things are mainly meant to inspire investors.
- Your Goals – A quick summary of where you want to be taken from the Prospects section below. Include a “See Prospects section for more information” at the end.
- Your Potential for Business – A quick summary Market section below. Include a “See Market section for more information” at the end.
– For a self-made business like your own, this will be a simple one. Just talk about you, who you are, and your own background. Your artists statement and elements from you CV would be good places to start here.
If there is anybody working with you in the permanent team, they would also be mentioned.
3. Products or Services Offered
– What do you sell? You’ll want to explain what you offer in a way which anyone with no knowledge of your industry would understand.
Within this section you will find:
- Definition of any special terms you use in your descriptions (such as Jewellery CAD, 3D printing, fair trade gold, etc.)
- How you’re unique – What sets you apart from the competition? This would be a good time to talk about your USP and your brand identity.
- How your product makes money – Where and how do you sell? How much do you charge? How do you take payment?
– This covers all the angles of your market situation and how your business fits in.
Within this section you will find:
- Market Overview – What is already there in the market now.
- Our Target Market and Customer Base – Where you fit into that market. This is where your target market research fits in.
- Jewellery Market by Numbers – Based on gathered information and your choice of target market, how big do you reckon this market could be?
- Competitor Research – Who else competes for the attention of this same market
- Your Approach to the Market – How you plan on actually reaching and appealing to your customer base. This would include sales strategy, sales focus, sales pitch, and pricing. Most of all, it should also include how you differentiate from your competition (related to your brand identity and USP in the previous section).
5. Operational Details
– This is a list of how things are made in your company. What is your manufacturing process? The reason why this section is important is it shows others how scalable and delegatable your business model is.
In this section you will find:
- Facilities and Equipment (if any)
- A description of your workflow pipeline, from initial customer order to delivery
- A description of your production process, from initial ideas to final production. This would also include how big your production runs are.
6. Financial Analysis
– These is where you make guesses and predictions for how the business will do, for the benefit of investors or to set targets for yourself.
In this section you will find:
- Financial Forecasts – Your predictions of future business performance. Everyone knows this part is fantasy, so don’t worry if it doesn’t seem real. So long as you at least try to keep it sounding sensible you’re okay.
- Risk Analysis – What or who could pose a problem as you go along? And what can we do to protect against that? Make a list of potential risks and what you can do to minimise or protect against each one of them.
– This is where you talk about how exciting a proposition your company really is.
Interestingly, this is pretty much entirely based on your earliest long term and short term plans.
Included in this section would be:
- A very short summary of profit projections borrowed from the Financial Analysis part above.
- Financing you will require (if any) to get to your destination
- Measures of Success – That is, a list of milestones which you would consider to be the minimum achievement to consider your operation a success, next to a list of milestones which would be enough to consider your operation a great success.
- A critical path for objectives of how you propose to get to both.
- Resources and requirements you will need to get to your goals.
– This is section holds two things. The first is a measure of the maximum number of orders you could fulfil given your current setup (also known as your maximum capacity). The second is an estimate of the current number of orders you fulfil now (also known as current capacity). If you’re just starting out in business, the second section won’t have much, so you may be able to simply skip that.
As with the financials, these estimates are pretty much entirely guesswork. But you do need to list the assumptions you are making when you make your estimates (such as how many hours you work, the average selling price of a piece of jewellery, how many pieces will be shipping, etc).
Final Business Exercise – Your Business Plan
You may not realise it, but by finishing all the exercises we have in these notes, you have already answered nearly all the information required to make a business plan. All that’s left for you to do is to put it together:
- Take all the information from every previously completed business exercise you have done to date and organise them by relevant section. Leave the Executive Summary as the last step.
- Looking through one section at a time, compare the information you’ve written up to what the business plan section listed above requires. Is there anything missing? If so, do the research to fill in the gaps.
- For that section, take your research and your previous exercises and combine the information into a single formatted section for the business plan.
- If any of your sections have become a bit long when you finish (longer than 1 page), then you can add a Section Summary at the beginning to give a one paragraph summary of what’s in that section.
- Once all sections are completed, you now have all you need to complete your Executive Summary. It’s pretty similar to the section summaries, except that it’s covering the entire document, and it can be a few paragraphs instead of just one.
- Check the formatting for the document is consistent throughout and easy to read.
- Finally, include a cover page. A simple one will do, with your branding right on the front.