A major part of any business plan intended for professional investment is a growth plan detailing how the business can increasingly take advantage of economies of scale. Investors want to see how each they invest can become , , or more over time and the best way to accomplish this is to create a foundation which can spread its costs over more and more sales. These are some items to plan for when creating a plan for growth.

Scalable Operations Systems

For a business to grow significantly without increasing costs at the same rate, its operations systems must be able to handle greater and greater revenues and scale. This means not only choosing software systems which can scale up to handle increased processing either for no additional cost or small fees to buy more capacity, as well as manual operation systems which can handle as many transactions as possible before additional hires must be made.

Adding or Distributing to New Locations

Working with new locations, whether they are your own retail locations or additional retailers, distributors, or outlets you are selling to, can mean the potential for doubling your sales volume and more. Consider how the products or services you have created will work with little additional investment in development for these new locations to know that you can spread your startup costs over this expansion.

Expanding Staff

If each additional staff member hired can only handle the work of each before him or her, then your labor costs will rise in tandem with your productivity. However, if you continually find ways to increase the productivity of each employee or to hire lower cost labor for new positions, you can fight this trend. Consider how you can attempt to push responsibilities down to the lowest cost labor possible without exploiting employees or breaking laws.

A great business plan addresses the concerns and questions of a reader about the business before they can even raise them. To be certain the plan is complete, begin by checking off the following list of the essential pieces of a business plan, generally presented in this order:

Executive Summary: A clear and concise introduction that hits all the high points of the plan.

Company Overview: The history, products or services, and structure of the business.

Industry Analysis: A description of the industry you are in, including its size, makeup and revenue and cost drivers, as well as projections of future trends.

Customer Analysis: The demographics, needs, and other characteristics of your customers, as well as the separate groups they fall into which you will have to market to or serve differently.

Competitive Analysis: The top competitors you face, their strengths and weaknesses, and a description of how your company will develop competitive advantage.

Marketing Plan: Your branding, promotional, and pricing strategies, which detail the tactics you will use to reach and sell to customers.

Operations Plan: The short-term and long-term operations processes to run and grow the business.

Management Team: The experience and skills of the key members of your management team and the plan to hire additional members.

Financial Plan: The financial results of the business including growth in sales, profit, customers, and products sold or services rendered. This section also includes details on the capital required to launch the business and what the startup costs will cover.

Appendices: Supporting documents that accompany the plan to present a stronger case. Pro forma financial statements (balance sheet, cash flow statement and income statement) showing greater detail for the first few years, are a major part of the appendices and must show financial returns that compensate for the risk funders take on by providing money for your business.

A business plan hopefully offers readers a complete understanding of the who, what, where, when, why and how of your business. However, it also offers them a look at you, personally. Assuming you plan to work as a key manager of the business, the plan shows readers a sample of your decision-making ability.

Being Decisive In a Business Plan

How, you may ask, can I be decisive in my business plan if there is so little information to go on about what my business must do? While it is true that any startup business must remain flexible to change its tactics as it learns more about the actual market situation it is in, business managers by their nature must be able to make decisions with incomplete information. Show that you can be decisive by presenting specific tactics you choose to pursue and why. This shows readers your confidence as well as your thinking process, allowing them to judge whether they would make the same decisions with the data you have at hand.

The danger of not being confident in your choices in your plan is that you may appear indecisive to readers. For example, if you include a huge list of marketing tactics or possible staff you may hire, readers see evidence of a writer who was able to copy lists of options from another source, but not a manager who realizes that the company cannot try and do everything.

Customer Targeting

Choosing specific customer target markets to pursue is one way to show your decision-making ability. After gathering information on the size of each customer market segment, considering how highly they will value your product or service, and examining how easily you will be able to market to each segment, you should be able to prioritize which to approach first. Although you may approach a few at the same time, be careful to take note it the marketing and operations methods required of this begin to contradict one another. If there are contradictions like this, readers will be turned off from your plan. Making specific choices like this based on the best data you can find is expected when running a business as well as when planning a business.

A business plan presents the story of how your business will launch and then operate. A budget detailing the startup expenses you will encounter must be included to show funders how their money will be spent. Here are tips on planning that budget.

Expert Overview

To start off, get a general sense of the cost categories for a startup business in your industry. To do this you should do some online research on websites for your sector which go over the expense categories. Then try to speak to experts. An entrepreneur in a non-competing market who started a similar business or someone at an industry association could be a great help in this regard. From this person you should be more interested in the range of startup costs they incurred and the general categories, rather than in their precise budget. You will have to customize your budget for your business and the market you are operating within anyway.

Example Categories

Some of the example categories for startup expenses you might encounter are licensing, insurance, and legal fees, leasehold improvements on a rental space, equipment purchases, initial inventory of products, training and education fees, and a pre-launch marketing campaign. Other categories will be specific to your type of business. For example, if you are starting a franchise, paying the franchise fee will be a significant category. Outline all of these categories on a spreadsheet to prepare to fill in estimated costs for your business.

Filling In The Details

Next you must research these expenses one by one through online searches for vendors and suppliers, as well as phone conversations when prices are not offered online. For items you will purchase repeatedly or will cost thousands of dollars, make sure to check a few sources for the right combination of price, quality, and service for you. Keep all of the details on the information you find about the services offered by companies and individuals you contact. You can use this process to gather much more than pricing information and therefore better prepare for your launch. While time consuming, there is no better way to find out the costs you will incur than speaking directly with providers you may actually use.

A business planning template can be an invaluable tool for a first-time entrepreneur or any entrepreneur working in an unfamiliar business sector. Using a template that is specific to your business sector can shortcut the work and formatting you have to do significantly. Here are three steps to make the best use of a template.

Read Through the Entire Template

First, read through the entire business plan template to understand the guidance it gives which you may make use of. Read both the sample text and financials and all comments and instructions given by the creators to help you along. By reading the template through, you get a sense of what the finished product might feel like and what type of work you must do to get your plan to this level.

Adjust the Financials

Before you do any writing, work on the financials to make them consistent with your plans. Enter your startup costs (after you have researched them) cost of goods sold, operating expenses, and revenue projections. The financial model with the template should help by automatically updating the financial statements of the plan based on the changes in these basic drivers. Check that the financial results (profit, return to investors, and cash reserves on hand) are appropriate for your business before moving on to the next step.

Customize the Plan

Next, customize the text of the plan starting with the company overview, working through to the end of the plan, and ending with the executive summary. As the executive summary pulls from every other section of the plan it is always best written last. Be sure that the language you use is entirely your own. Use sample text from the business plan template only as guidance to the tone and type of content you should use. Refer to guidance within the template to be sure you are fulfilling the purpose of each section as you write.

A business plan template is a product which can give your writing a significant jump start, shaving hours and maybe days off of your business plan development time. Rather than working on a plan from scratch, pulling together directions and guidance from multiple websites or sources, using a business plan template offers you direct and practical guidance on how to create a full business plan all in one package.

Guidance

The template should include directions to show how to customize it to reflect your specific business. This may come within the template itself or in a separate set of instructions. Regardless, the effect is like having a business plan consultant with you, nudging you in the right direction throughout your writing process.

Format

A business plan template comes pre-formatted, with appropriate fonts, colors, and sections. The cover sheet, table of contents, headings, and page layouts will be preset. All of this work allows you to sidestep concerns about your format and presentation style, and move on to focus on the ideas behind the plan's major sections.

Graphics and Charts

A template may present many potential spots for graphics and charts to replace text. This will make your plan much more attractive and save you the time of developing these graphics yourself.

Financials

A financial model in Excel or a similar program will give you a significant short cut when it comes to the financial section. After entering your financial assumptions (such as average price, units you expect to sell, revenue growth rates, startup costs, and operating costs), the model should automatically generate valid pro forma financial statements in the format required by funders (generally, greater detail for the first one to three years, with annual numbers for the first five years of operation. Not only do you not need to be an accounting whiz to use such a template, but you can quickly and easily try out different financial assumptions and see how they change your statements and return over the years.

Start up business plans are developed because the process of writing them creates huge benefits. A lot of people resist writing a start up business plan. They are under the false notion that start up business plans are an academic exercise that people are made to do in college or business school.

Another common misconception is that start up business plans are only needed if you are going to raise capital through pubic share offerings, taking on private investors, or looking for angel investors. The fact is, there are a tremendous number of benefits to putting together a simple start up business plan regardless of the type of business you intend to launch.

Even if the start up business plan will only be read by you or your spouse, the benefits are undeniable. The things you will learn about your business by going through the process of writing a start up business plan far outweigh the time you will spend writing it.

The Benefits of a Start Up Business Plan

Motivation: your start up business plan can help you get back on track with your original business concept giving you wisdom and guidance. It helps you see your original vision.

Planning: your start up business plan is a map showing where you are today and where you want to end up. Following it gives you confidence that you know where you’re going.

Analysis: your start up business plan helps you to think about things you wouldn’t normally consider. It forces you to analyze the relationships among different parts of your business. How sales ties together with lead generation, how that ties into services, delivery, profit margins, cash flow forecasting, etc…

Strategy: your start up business plan highlights the relationship between your business and the local competitive marketplace. By writing it you will have tapped into the primary sources of information about the competition; sources that will be invaluable in the future.

Overall, the act of writing a start up business plan puts your ideas and concepts down on paper. When things are in black and white like that you can see the inconsistencies and weaknesses much easier. Then you have time to address these issues and resolve them before you enter the marketplace.

The Bottom Line On Start Up Business Plans

Having a start up business plan is extremely valuable. The process of researching and compiling the information about your business provides motivational, organizational, analytical, and strategic advantages. These advantages will continue to accrue long after your start up business plan is written.

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