Small Business Plan

Every business needs careful planning. It is advisable to write a small business plan before starting up a business. A small business plan may contain the following content:

Target Market

Your small business plan should clearly spell out the market you are targeting with your products and services. You can define the target market in terms of demography. While conducting market research for your small business plan, you will most likely need to carry out secondary as well primary research.

There are many sources that can be used for secondary small business plan market research. Some of the most useful publications are provided by the government at a small or nominal fee. This particularly includes statistical publications. Other sources are available from private publishers. These are usually quite expensive, but may be well worth their cost if they can save you a large amount of research time.

Another alternative is to consult a professional marketing consultant. Such a consultant can conduct custom research. They might even be able to write a complete small business plan for you.

Small Business Plan Competitive Analysis

A competitive analysis is a chapter that must not be missing in any small business plan. It basically reviews the market and the position of your competitors. The aim is to find a niche in which products and services fit in the competitive landscape.

Marketing Mix and Positioning Statement

The marketing mix is generally defined in terms of the four P’s, products, place (distribution), price and promotion. If you are writing a small business plan to cover services, you may add chapters for additional P’s such as people and processes.

On the other hand, a positioning statement defines where a product or service is positioned in the mind of a customer. This deals with customer perceptions and can be expressed in terms of variables such as value, friendliness, cleanliness, amount of functionality, or anything else.

Financial Small Business Plan

A financial chapter is a must have in every small business plan. The financials should cover a rough budget outline and a break-even analysis. Since it is often difficult to predict financial figures in advance, a scenario analysis will also be useful for your small business plan.

Budget Plan

Specify the budget you require. This includes risk capital as well as normal working capital that is required to run your business.

Break-Even Analysis

This specifies the point at which your small business makes neither a loss nor a profit. It is important to clearly spell out the break-even point in your small business plan. If you go beyond this point, your business will be profitable.

Scenario Analysis

A scenario analysis is a financial plan that looks at various possible situations. For each scenario, certain variables may be changed. For example, you might produce three different budget forecasts, each of which is based on a different revenue figure. You can use a scenario analysis to test for the sensitivity of certain variables. For example, you could test what impact there would be on your profitability if advertising expenses were higher than expected. If such an analysis is attached to your small business plan, it is called a sensitivity analysis.