A business plan is a roadmap for how to structure, run, and grow your new business. In this article learn about the 3 most used types of business plans
3 TYPES OF BUSINESS PLANS By Dennis Bingham www.MBMentors.org
According to the SBA, “A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.
Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is a smart choice.”
Business Plan Overview MINNEAPOLIS BUSINESS MENTORS can assist you in developing a business plan that meets your needs. Shown below is an overview of the 3 different types of business plan assistance we offer.
1. Feasibility Business Plan: A feasibility plan looks at the viability of a business idea. It helps identify potential business risks and provides a rough idea of the potential for success. The goal of this plan is to answer the question: will this business idea work and should you proceed with it? This plan is developed in partnership with your mentor(s).
2. Startup Business Plan: The startup business plan utilizes a question/answer format that emphasizes highlights rather than lengthy narrative. This plan is developed for the business owner and his/her advisors. It is a roadmap to operating and growing your business. This plan is developed in partnership with your mentor(s).
3. Traditional Business Plan: This plan provides detailed information about your business (sales, marketing, operations, management, and finance) to convince a bank or private investor that your business is worth considering as an investment. This plan is developed in partnership with your mentor(s).
Below are the details of each business plan.
Feasibility Business Plan
The feasibility business plan is an early stage assessment of a business idea. It contains only limited (preliminary) assumptions concerning business structure, products and services, resources, and other information concerning your business idea. This plan will help you to identify key drivers of your business. A driver is an element that is critical to the success or failure of a business.
If your decision is to proceed with your business idea a more detailed lean startup or traditional business plan should be prepared to confirm your preliminary assumptions. The process of developing a detailed business plan will significantly enhance your likelihood of success.
Basic Elements The basic elements considered in the feasibility business plan are shown below. This list covers many of the most important questions associated with starting a business. Not all of the questions will necessarily apply to your business; however, they may suggest other questions that would be useful in planning for your business.
Your Product or Service
Marketing and Sales Strategy
Risks to Consider
Startup Business Plan Startup business plans are less common but still use a standard structure. They focus on summarizing only the most important points of the key elements of your plan in a question/answer format. They are typically only a few pages long. There are many versions of lean startup templates, MINNEAPOLIS BUSINESS MENTORS utilizes questions from “21 Question Success Plan” written by Robert Voss.
21 Questions - Robert Voss: 1. How would you describe your business idea? 2. Why are you starting this business? 3. Why are you the right person to start and run this business? 4. How is the business organized? 5. What goals do you want to accomplish in the first 12 months of the business?
6. Why is this a good business to start? 7. Who is your competition? 8. What are your competitive advantages? 9. What will you charge for your services? 10. What is your attitude about your prices? 11. How much will you make on what you sell? 12. What do you estimate your first year’s sales will be by month?
13. How would you describe your target customer? 14. What tactics will you use to get known by your target customers? 15. When people see you marketing materials what messages do you want them to remember? 16. What are you going to do on a very regular basis to constantly and consistently get new customers? 17. What are your start-up costs? 18. What is your monthly overhead? 19. How many sales do you need on a monthly basis to breakeven?
20. What are the highlights of your first-year projections? 21. What Proof do I have that this business will succeed?
Traditional Business Plan You might use a traditional business plan if you plan to request financing from traditional sources.
When you write your business plan, you don’t have to stick to the exact business plan outline. Instead, use the sections that make the most sense for your business and your needs.
Traditional business plans use some combination of the following sections:
Services or Products
Personal Financial Statements
Financial History and Analysis
Good luck with your new venture!
About Minneapolis Business Mentors We are a premier source of small business advice for entrepreneurs. We are a volunteer, nonprofit organization whose mission is to promote the success of small businesses in the Minneapolis area.
We provide free and confidential business mentoring to both prospective and existing small business owners. We conduct mentoring via video, email or face-to-face.
We conduct free workshops on a wide variety of timely topics.
We facilitate peer advisory groups offering leaders of growing small businesses the opportunity to process challenges facing their respective organizations.
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