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Writing an Executive Summary

The executive summary of the business plan really is the focal point of the document given that many people read through these documents many times a day and they’re looking for a high impact statement so that can be given to the reader. Most importantly, one of the things that is often omitted by many people that are writing their own executive summary is a table that showcases the anticipated profit and loss statements that are done for the first three years of operation. One of the most exciting aspects of any business is its ability to produce revenue and profits over a substantial period of time. As such, it is important that the document feature information that alludes to how lucrative the potential business or project can be. Usually, this is not a full profit and loss statement but rather a small table that overviews the revenues, gross profits, operating expenses, and EBITDA. The smaller table can provide a very quick overview as to the financial picture of the business especially as it relates the amount of capital that is being sought by the entrepreneur.

One of the things that should not be included within the executive summary – but is often done so by inexperienced business plan writers – is the industry research. Many people often put way too much information into the executive summary which really needs to be showcased within the entire business planning document and not within the first 2 to 3 pages. The industry research usually runs about two pages to three pages in length and it is more appropriate for the body of the text rather than the introduction.

If the owner-operator or entrepreneur has a significant amount of experience within the industry then a small biography should be included right at the onset of the executive summary. Usually this overview of the senior management should run about two paragraphs or three paragraphs in length for each key member of the management team. For single owner-operator this can just be the 2 to 3 paragraphs that are specific for the owner. This is not need to be the full resume of the individual given that these are usually included as part of the overall business planning package and are not directly put within the document itself.

An overview of the products and services being sold also need to be included within the executive summary, but it is important not to go too overboard with this as the business plan is going to showcase all the products and services that are being offered throughout the entire document. One exception to this is if the company has developed or is developing a very unique piece of technology or other proprietary product that is really going to stand apart within the market. In this case, it may be very important to have a few dedicated paragraphs that showcases the technology and why it will be a highly lucrative business investment once it is applied to the market as a whole. One of the key things to do if you are writing an executive summary specific for a technology business is to keep the technical jargon down to a minimum given that not everyone that is going to be reading this document has a similar background in electronics, computer science, or any other industry that involves highly complicated technical matters.

Usually the final element to an executive summary is the overview of how the business will grow over a five-year period. This includes discussing things such as organic growth, growth through acquisition, and related reinvestments of after-tax profits in order to further grow the business on a year-to-year basis. This section of the executive summary usually runs that one paragraph to two paragraphs given that the real focus should be on the start up more immediate expansion of the business rather than looking down the road 5 to 10 years.

The executive summary is generally one of the more difficult parts of the business plan to write given that it really is the first thing that a potential funding source or business partners going to see when they open the business planning document. If this executive summary is part of a much larger document and it is usually best to write this section last given a each other element can be included within this 2 to 3 page document. In some cases, many entrepreneurs will distribute the executive summary as a standalone document while referring to the fact that a full business plan exists upon request.

Writing a SWOT Analysis

The SWOT analysis is usually one of the easier sections of the business plan to write. In most cases, a SWOT analysis is drafted in a bullet point format. Specific issues regarding strengths, weaknesses, opportunities, and threats are showcased in four different sections. As it relates to the strengths section, most entrepreneurs focus on the fact that their business offers a unique product or service that is highly competitive in the marketplace. One of the common strengths for a new businesses is that they are able to effectively undercut their competition in regards to price. This is true especially for service-based businesses that are looking to expand their visibility at the onset of operations by offering substantial deals on the services that they render.

For product focused companies, this is a little more difficult given that they do not have the same buying power as large established corporations. One of the other things that is often included in the strength section of the SWOT analysis it is a discussion regarding the experience of the individual entrepreneur or management team. If you or your management team has had significant experience in the industry as well as an established track record of successes with the development of new entrepreneurial ventures then this should be very much highlighted within this section of the analysis. One of the other things that many entrepreneurs will discuss within this section is whether or not their business generates recurring streams of revenue from service. For instance, if your business is an online subscription focused website that you may want to point out the fact that your company will generate income month after month as credit cards or build. This can be one of the primary strengths as it relates to growing the business since these funds can be reinvested. As it relates to specific industries, certain buyers are able to acquire inventories at rates that are lower than that of the general market. As such, if a business has access to distributors that can provide them with their products at a highly competitive rate then this cost savings can be passed on to a customer. These are all examples of how strengths are showcased within a SWOT analysis.

The next section of the analysis is weaknesses. Although many entrepreneurs don’t want to think about their business having weaknesses or issues this is simply not the case. Every business is going to have specific issues that they need to deal with either on a one-time basis or on an ongoing basis. As such, it is important for the entrepreneur to sit down and really think about some of the critical issues and problems that the business or the industry as a whole will have forward. Certain weaknesses include the fact that some businesses are highly sensitive to changes in the economy. For instance, a luxury goods retailer may see a significant decline in the revenues in the event that there is an economic recession. Other examples of weaknesses include medical businesses that may face significant liabilities as it relates to mistakes that are being made. Finally, one of the primary weaknesses in his face by most businesses is that they are our substantial underlying operating costs. For example, a large-scale retailer is going to need to have a substantial space that will have a very high rental expense as well as a number of employees that are expensive on a per hour basis. These can be an example of a weakness for a retailing business.

For the opportunity section, this primarily discusses how the business will expand over a three-year period. Examples of this include the establishment of additional locations, continued expansion of the company’s marketing campaigns, acquisition of third-party companies, and acquiring additional rounds of capital in order to further expand the business. As each business has unique ways that they can grow – it is important for the entrepreneur to think of ways that they can expand the business once they reach profitability. This is especially true in service-based businesses that deal in billable hours. An example of an opportunity for a law firm, which is a service-based business, would be to hire associate that can increase the billable hours on an ongoing basis. Examples like this should be shown within the SWOT analysis.

The final section of the analysis is the threat section. Many people often confuse this with the weaknesses section given that this is again one of the issues that most entrepreneurs don’t want think about given that it can from their livelihoods. However, it is important to assess whether or not specific threats could have a very damaging or deleterious effect on an individual company’s ability to generate revenues. An example of a threat would be a regulation change that could substantially impact the way the company does business. For instance, a lender could face a change in banking regulations that forces them to maintain interest rates at a certain level. This type of threat is external to the company’s operations but it still can have a negative impact on the profit and loss statement. While it is difficult to imagine every different scenario that could occur that could impact the company’s operations – it is important for the entrepreneur to try their best as it relates to viewing certain external risks that could impact their profitability. This is one of the sections that many experienced entrepreneurs will take a tremendous amount of time to develop given that they want to understand all the potential underlying risk that they may face as they develop their business and their respective operations.

Writing a Marketing Plan

Writing a marketing plan is usually the most fun portion of developing a new business and writing a complete business plan. One of the nice things about writing a marketing plan is that it is not overly technical in nature given that you’re discussing the ways in which will target your potential customers. Foremost, it is imperative that the entrepreneur develop a expansive demographic profile that showcases the exact customers – whether business or individuals – it will be targeted via the company’s marketing campaigns. As it relates to individuals that are targeted, common characteristics including median household income, median family income, age range, gender, profession, and psychographics are included in this analysis. It is very important that the marketing plan provide a laser focus on the individuals that will be targeted given that marketing is a very expensive proposition and it is imperative that a new business has a clear sight of who they want as their initial customer base. Of course, if individuals are targeted outside of that demographic base that is great however it is very important that the marketing budget is properly allocated towards specific demographic profiles. If the company is a business to business provider then expensive demographics need to be provided regarding the types of companies will be targeted for the company’s products and services. This includes an overview of the anticipated annual revenues, annual profits, industries operate within, and how much these businesses will spend with the company any given year. These demographics at times can be extremely broad, but it is again important to focus specifically on the customers that are most likely to enroll or purchase the company’s products and services.

Given the number of channels in which marketing and advertising can be carried out these days – it is important to develop a number of different sections of the marketing plan to focus not only in traditional marketing, print marketing, as well as online marketing. Online marketing is of the special importance these days as most people now find product and service providers via the Internet on their desktops and mobile devices. One of the ways that many new businesses will often develop a customer base is by establishing a large social media presence. This includes maintaining profiles on networks such as FaceBook, Google+, Twitter, Instagram, LinkedIn, and third-party platforms such as Yelp.com and Reddit.com.

Given that these are low-cost ways to reach an audience, many new entrepreneurs have found that this can provide a expansive return on investment as it relates to each marketing dollar spent. Of course, these platforms are highly competitive for an individual’s attention. As such, many firms will make the decision to hire a social media consultant or similar marketing firm that can assist in guiding them with how to properly carry out a social media marketing campaign. It should be noted that the cost of advertising on social media is increasing given the ability to highly target companies and individuals on these platforms. As such, a cohesive marketing plan that focuses specifically on social marketing should be one of the major components of the overall marketing plan.

Other ways that businesses advertise via the Internet is through the use of pay per click (“PPC”) marketing. This allows individuals to have their websites showcased immediately on the first page of search results given that they are sponsor advertisements. This can be an extremely expensive form of marketing given that a fee anywhere from ten cents all the way to $20 can be charged each time a person goes to a website. Given this high expense, a very specific focus needs to be implemented so that only the most proper demographics are targeted when engaging in a PPC advertising campaign. It should be noted that there are a number of different firms out there that can assist with developing the keywords and target audience specific to the company. These companies typically charge a monthly fee ranging anywhere from $200 all the way to $2,000 depending on the scope and scale of the pay per click marketing campaign. However, usage of this type of marketing on Google, Bing, and Yahoo is generally pretty straightforward. As such, the few hours work – most entrepreneurs are able to develop their initial paper click marketing campaigns on her own. These search engines also have a number of experts on staff that can work closely with the entrepreneur in order to get this operation up and running.

Beyond pay-per-click marketing, many firms will seek to use search engine optimization so that the pages can be found in natural search results over time. This is an expensive proposition and the results can take upwards of eight months to a year before the business sees a return on this type of marketing investment. Search engine optimization is generally considered to be a long-term marketing strategy for most new businesses. There are a number of companies out there that can render the service to a company, but they are expensive and again they do take a significant amount of time for the results to take hold. Generally, a search engine optimization firm will charge a fee ranging anywhere from $100 all the way to $20,000 a month depending on what needs to be done in order to have a website found organically through search engine results. This is usually one of the last types of marketing that a new business carries out given that they want to generate him immediately through the use of pay-per-click advertising and social media campaigns.

Print advertising and television advertising is also extremely popular still. Although the rates of these types of advertisements have declined, they can still be an outstanding source of marketing for any new business. Print advertising and television advertising usually carries more weight for consumers as people put a greater level of trust in a televised advertisement rather than an online advertisement. One of the nice things about developing a television advertisement is that it can be concurrently run on other platforms such as YouTube, Vimeo.com, and other platforms that allow for the sharing of online videos. As such, many television commercials that can be run cost-effectively on cable TV networks can concurrently produce a significant amount of interest the online channels as well. The cost of developing a small commercial advertisement that is appropriate for cable television or online marketing typically is about $2000 to $5000 depending on the videography company used. Extremely high quality videos typically run anywhere from $10,000 all the way to $50,000 depending on the production value of the commercial.

Print advertising is usually one of the ways that most local businesses promote their companies to the general public. The use of flyers, advertisements in local newspapers, advertisements in local circulars, and related print advertising activities typically are low-cost form of marketing that can potentially rates reach tens of thousand households on a monthly basis. However, the return on investment for print advertising is typically in the lower end of things given that the very large amount of mail is sent out to a broad base of demographics. These types of advertisements remain popular with service-based businesses including contractors, restaurants, and highly local retailers. Print advertising is going by the way when someone as more and more newspapers go online and as less mailers are sent out on a yearly basis.

In closing, having a well-defined marketing plan can be a make or break for most businesses given that there can be no customers if people are unaware of the business and what it provides. As such, it is important that the entrepreneur take a significant amount of time when developing the marketing campaign so that they have a complete understanding of who their customers, how they will reach them, and the cost of acquiring each new customer.

Writing a Business Plan

Writing a business plan is a very difficult process for most people. This is primarily due to the fact that an individual entrepreneur always has a number of very good ideas in their head, but often has trouble putting together the documentation that clearly expresses their vision to a third party. Most importantly, many business plans are written specifically for raising capital. As such, entrepreneurs are looking to put their best foot forward as it relates to showcasing with their business intends on doing, how much capital they need, where the business will be over a five-year period, and other information relating to the day-to-day operations of the company.

One of the things that most people have the most trouble with is developing the financial model. It is no secret that forecasting with the potential revenues of a business can be can be excruciatingly difficult given that it is very much uncertain. Even for small businesses that are able to examine a retail space – the revenues and profits can difficult to estimate. In some cases, entrepreneurs have either been spot on were drastically off as it relates to their anticipated revenues. In most cases, it is very prudent and conservative to underestimate what the expected revenues will be while concurrently overestimating with the expenses. One of the common mistakes that many entrepreneurs make when developing a business plan is at the drastically undercut with their ongoing expenses. This is especially true as it relates to salary and ongoing operating costs.

It is important that an entrepreneur that is developing a business plan for a new venture understand with their personal month-to-month capital needs are as it relates to their living expenses. This needs to be heavily factored in into the business plan and the financial model so that an entrepreneur can focus on growing and developing the business rather than making their month-to-month salary needs. Generally, it is wise to seek an amount of capital that will allow the entrepreneur to develop the business over a 12 month to 18 month timeframe. It usually takes most businesses one year or more to reach profitability. As such, this needs to be factored in as it relates to the start up cost as well as the profit and loss statement.

One of the other more difficult challenges in developing a business plan for a new or expanding venture is sourcing the industry information. If you go on the Internet there are literally thousands of sources that focus on providing industry research, local market research, and related information to the general public. As such, it can be difficult to discern which information is credible and what is not. Most importantly, when sourcing information from a private research source this organization should have an extensive amount of usage as it relates to NAICS and SIC codes. The United States government maintains extensive databases of the amount of revenues that are generated for any given industry. As such, this can be an excellent place to start if an entrepreneur that is developing a business plan is stuck trying to source the industry research. One of the nice things about using these research sources that they are completely free and open to the general public. There are times when purchasing a private market research report is important given that the government simply maintains an overview of the number of people operating with any field as well as the amount of revenues that are generated on a yearly basis. More in-depth research regarding industry trends, market trends, and other relevant information can typically be sourced from a private company.

As it relates to the actual writing of the business plan this is something else that many entrepreneurs go with given that they are not good writers. In many instances they will turn to hiring a professional business plan writer in order to ensure that their vision is encapsulated in a document appropriately. This is always a smart move, and as the owner of this business we develop a number of business plans on the customized basis. This is primarily due to the fact that the entrepreneur were struggling with writing their business plan and then turn for professional advice. This website also has a number of templates that will give an entrepreneur a running head start as it relates to the development of their profit producing project.

While it may seem daunting, writing a business plan is not as difficult as it seems. Although it can usually take anywhere from 40 hours to 100 hours to produce a highly polished document – the effort is worth it given that it will provide the entrepreneur with a clear understanding of what they can expect in terms of revenues, profits, and as a guide for business over a three-year to five year period so that they can follow the plan exactly as needed.

Using a CPA

A certified public accountant (“CPA”) can quickly become your best friend as it relates to starting and expanding a new business venture. Any business, regardless of its size, is required to fill out a number of forms each year that are specific for tax reporting, as well as general accounting. This includes tax returns, employee withholding income tax returns, sales tax returns, use tax returns, and other documents that are frequently requested by municipal governments, state governments, as well as the federal government.

These forms are extremely complicated and only someone who is qualified as an accountant can assist you in determining which reporting agencies you must submit documentation to on an ongoing basis. The penalties and fines for missing these types of deadlines can be substantial. As such, having a qualified certified public accountant ensures that your business will remain within the letter of the law at all times especially as it relates to tax filings.

One of the common debates within the United States as it relates to ongoing government issues is tax reporting. Many people within the state legislatures as well as the federal government want to see simplified tax forms available given that it is a substantial administrative burden on all businesses. Most small business owners do struggle with having to spend a substantial amount of time filling out these forms and providing the necessary information to government agencies. A certified public accountant can be a major expense for any business, but they can also be an invaluable resource as it relates to making sure that these forms are filled out and submitted correctly and in a timely manner.

A certified public accountant can also assist as a relates to acting in a consulting capacity with your business. These individuals typically work with hundreds of small business clients and they can provide substantial insights in as to how your business can grow and expand. This is especially true for raising capital given that most certified public accountants work very closely with you when a bank or financial institution requires ongoing tax forms, profit and loss statements, balance sheets, and personal financial statements. Most certified public accountants operate in a dual capacity by not only providing outstanding advice relating to taxes but also as a small business advisor.

Many small businesses will quickly work with smaller CPA firms given their personal nature. As it relates to the cost of working with a certified public accountant, you can expect that a tax return for a corporation run anywhere from $500 to $1,000 per year. Depending on the complexity these fees may be higher or lower but for a standard size small business typically this is the normal range. Most of these accounts also have a billable hour rate of $150 to $250 depending on their expertise. However, it is somewhat unusual for certified public accountants to generate a substantial amount of the revenues from billable hour services.

During any type of tax dispute, a certified public accountant can also be an important resource given that they can often represent you as it relates to state government taxing agencies as well as the federal government. This type of dispute can be highly nerve-racking and a qualified CPA can ensure that this goes as smoothly as possible for you.

In closing, a certified public accountant is a great resource for any business that is looking to start or expand.