Over the past 20 years, IT consulting has become one of the
largest industries in the world. Everything is now connected to the Internet,
and nearly all businesses require substantial information technology networks
in order to conduct their operations. For competent IT professionals, there are
a number of profitable opportunities that exist as it relates to starting and
expanding a business. In this article, we are going take a look at the top 10
business opportunities that exist in the IT consulting and general IT services
market.
General IT Consulting
One of the best things about owning and operating a general IT consulting firm
is that these businesses generate highly recurring streams of revenue. Most
businesses usually contract with an IT consulting firm to develop their
networks, maintain database systems, upgrade software, and ensure the security
of these networks. These businesses are able to remain profitable and cash flow
positive at all times given that they generally bill their clients directly via
credit or debit card. Even in more rural or suburban markets, IT consulting
firms are able to operate with a large number of small business to medium-size
business clients.
Cloud Application Development
As more and more people use a number of devices to conduct their business
operations, the cloud has become the most cost-effective way for an individual
or business organization to manage their information. One of the nice aspects
of developing a firm that focuses on cloud applications is that these
businesses, much like general IT consulting, are able to produce recurring
streams of revenue from these operations.
These businesses are able to develop substantial revenues
from the initial development of the application while enjoying recurring
revenues from the ongoing maintenance and upgrading of this technology. Once a
client is secured for this aspect of operations, they will typically stay with
the firm given that they have a substantial understanding of their developed
cloud technology.
IT Training Services
As many large organizations use both in-house employees as well as third-party
contractors for these services, many IT consulting firms have taken on the role
of tutoring and providing education as a relates to people that will be
directly managing installed systems on a day-to-day basis. In fact, IT training
is one of the fastest-growing segments of the overall information technology
market. As such, a strong ancillary revenue stream for an IT consulting firm is
to provide these services to clients that use the company’s services on an
ongoing basis. These revenue streams can be substantial, and some firms charge
much $1,500 per employee for properly training them on how to use and manage
installed network systems.
Remote Assistance Services
Given the ubiquitous nature of information technology, many IT firms will often
act as a outsourced service desk for employees that have specific issues with
their work computers. One of the best aspects of this, but like every other
aspect of IT consulting, is that monthly fees can be charged to small, medium,
and large scale businesses that have an IT consulting firm operate on a remote
basis in order to manage support tickets. Due to the the constantly changing
nature of technology, many firms feel that it is economically advantageous to
use a remote help service desk in order to fulfill employee support tickets.
IT Security Consulting
There is hardly a week goes by where it is it announced that a major
corporation has suffered a data breach. While many hackers typically target
larger corporations and financial companies – any business that has their
networks connected to the Internet is a potential risk for having their systems
intruded.
As such, one of the most profitable aspects IT consulting is
by rendering security services that include penetration testing, WiFi security,
database security, and other protocols that ensure that a system can remain
nearly safe at all times. IT security consulting businesses typically generate
very high per hour fees for providing the services to their clients.
Website Development
Although it is usually uncommon for an IT consulting firm to maintain a web
development arm, this aspect of operations can be just as profitable as any
other aspect of information technology management. Nearly all businesses
maintain some form of web presence, and as such, the demand for comprehensive
web development is substantial.
In many cases, IT consulting firms will often act as a
general contractor and outsource the actual development work to a qualified
third-party. One of the important aspects of these operations is that companies
that will frequently use a business for the web development needs will also use
them for their IT management needs as well. Many smaller and medium-size
businesses always want to work with one company as it relates to these types of
operations.
IT Product Sales
Although most of the revenues generated from information technology consulting
and management are from services, almost all businesses need to acquires
computers, servers, monitors, and related peripherals for their installed
networks. Often, given the myriad of products that are available, many small to
medium-size business owners will often pick products that do not exactly suit
their needs. As such, IT consulting really businesses can generate substantial
secondary revenues by selling the specific products are needed to develop a
full-scale network. Generally, the markup over the direct cost of inventory
ranges anywhere from 30% to 50%. This can be a substantial additional revenue
center for these types of businesses.
Network Architecture Development
For many large-scale businesses, it is very difficult to have internal staff maintain
a multi-site network. By providing comprehensive planning specific for network
architecture, medium to larger scale enterprises are able to operate their
diseases much more effectively.
It should be noted that network architecture services are
typically something that is only done by a highly qualified and certified
professional. As such, integrating network architecture design and development
services into an existing IT consulting firm can be a lucrative secondary or
tertiary stream revenue. These fees are typically billed on a per project
basis.
Onsite Assistance Services
Over the past 10 years, many people have turned to on-site assistance as relates to managing their IT needs. During outages, system failures, and other issues that may arise from operating a IT infrastructure, many business feel that it is imperative to have an individual or business that is contracted that will come to the location to remedy any issues at any time. Typically these fees are charged in a per hour basis, and monthly retainer may be required in order to maintain a service agreement contract. Generally speaking, only large-scale businesses typically require this type of attention given that they store substantial amounts of sensitive data.
Internet-of-Things Product Development
More and more companies are seeking to develop proprietary products that can be seamlessly connected to the Internet. One of the challenges that these businesses often face is the connectivity issue as there are a number of protocols that must be addressed in order to have any specific device be able to communicate with other devices via the Internet. Product development can be a very profitable sideline for an IT consulting firm that has a substantial understanding of the Internet of things (“IoT”) and how devices communicate with each other. Product development is also one of the types of revenues is typically done on a per project in per hour basis.
Assisted living facilities are
rapidly growing given that many Baby Boomers are now entering the later stages
of their lives. Several market studies indicated that nearly 50% of all people
over the age of 65 will require some form of ongoing living assistance as they
age. One of the best aspects of operating an assisted living facility is that
these businesses’ revenues are relatively immune from negative changes in the
economy. These companies are able to produce revenues directly from residents
(or their families) as well as from private insurance companies and publicly
funded healthcare systems. The month to month charges for a resident typically
ranges from $2,000 to $4,000 depending on the level of care required by the
resident. Many assisted living facilities are also integrating memory care
services into their operations in order to treat residents that suffer from
dementia or progressive neurological disorders.
Within the United States,
there are nearly 50,000 locations that provide assisted living services. Each
year, these businesses generate nearly $190 billion of revenue. It should be
noted that these revenues do not include services that operate within a
resident’s home. The industry employs over two million people (including both
medical and general facility staff). The growth of the industry remains around
2% per year, which is expected to remain stable over the next twenty years
(again, as a function of the aging Baby Boomer population).
One of the common trends within
this industry is to have a number of specialized medical personnel on staff in
order to render specific medical services to residents of these facilities.
This can drastically boost the billings of the business given that these fees
are often paid by private insurance, Medicare, and Medicaid. Larger scale
assisted living facilities retain a medical director (a physician) in order to
provide consultation when necessary for a resident that has a specific medical
issue.
Given the increasing level of
competition among assisted living facilities, many of these businesses have
begun to offer a broad spectrum of amenities in order to differentiate
themselves from other market agents. This includes providing specialty meals as
well as transportation services to local destinations (so that residents can
enjoy time outside of the facility). Transportation services are important to
residents that still maintain modest employment (among residents that are
younger, able to work, and want to retain employment).
Overall, the industry outlook for
the assisted living facility is very strong. The increasing age of the Baby
Boomer population is continuing to increase demand for comprehensive
in-facility services. This trend is expected to continue indefinitely
especially as families have become busier, and cannot directly care for an
elderly individual on an ongoing basis.
Very few people can complete
repairs on their own heating, ventilation, and air conditioner systems. These
services generally can only be provided by a competent and licensed contracting
professional. Although the bread-and-butter of HVAC contractors comes from the
installation of new systems, these businesses are always able to remain
profitable and cash flow positive from repair and maintenance services.
Additionally, for commercial and industrial buildings – many state and
municipal building codes require that these systems are inspected by a licensed
professional from time to time. This lends to a great degree of economic
stability for these businesses. Additionally, HVAC contractors enjoy readily
available access to capital given that they can always generate profits from
repair and maintenance services. Most financial institutions are willing to
provide nearly all of the necessary capital in order to get these businesses
often the ground (or for expansion purposes).
As it relates to the size of this
industry, there are approximately 110,000 companies that are actively involved
with HVAC services. The industry employs more than half a million people. Each
year, the industry generates nearly $100 billion of revenue.
The growth of this industry has
remained strong over the past five years given the strong demand for new
housing (as interest rates have remained low). In each of the last five years,
industry growth has remained above 2%. It should again be noted that even in
times of economic recession – the industry remains profitable (although with
flat revenue growth).
One of the common trends within
the HVAC industry is to aggressively use online platforms in order to market
these services to the general public. Almost all contractors maintain a
proprietary website coupled with a moderate scale presence on social media
platforms. As it relates to social media (with a focus on FaceBook), these
businesses are able to develop profile pages that can feature reviews from
prior clients. This is important given that many people will seek honest
reviews on these pages. One of the other trends is to join independent review
platforms such as Angie’s list in order to further boost the visibility of the
business. Over time, positive reviews from these platforms can be an invaluable
source of revenue for HVAC contractors. Many HVAC contractors will also engage
in a regional search engine optimization (or “SEO”) campaign in order to ensure
that their proprietary websites are frequently found in search results.
Although this type of marketing has high upfront costs, the results can last
for several years if this is carried out properly. Most companies outsource
this type of work to a qualified digital marketing agency or web development
firm.
Overall, the industry outlook for
the HVAC industry is strong. Interest rates remain low, and many homeowners are
taking advantage of low cost borrowing in order to upgrade their systems to be
more energy efficient and environmentally friendly. Many HVAC contractors
maintain relationships with specialized lenders so that these systems can be
financed by home and property owners. There are numerous companies that act as
a financing partner for contracting businesses. Additionally, new housing
demand remains strong (again, as a function of low interest rates). As such,
the demand for new system installations by real estate developers is
consistent.
It should be noted that one of
the best features of the industry is that HVAC contractors can scale down their
operations during difficult economic conditions. This allows for a core focus
to be shifted to profitable maintenance services.
As opposed to twenty years ago,
many more people are making their living as a freelancer or independent
entrepreneur. Given the prevalence of the internet, the ability for individuals
to make a living on their own has expanded rapidly. As such, many of these
people require a small amount of office space if they need to meet
clients/customers and do not want to conduct these operations out of their
home. Additionally, some independent entrepreneurs and freelancers prefer to
work outside of their homes in order to avoid distractions while enjoying the camaraderie
of people that operate in a similar capacity. This strong demand has allowed
real estate firms to develop coworking styled office spaces that allow for low
costs for small office space.
One of the most important aspects
to this industry is that these firms generate much higher returns on investment
as opposed to standard commercial leases. However, on a per square foot basis –
the rental fees are generally much higher. This is primarily due to fact that
most coworking spaces (or shared office spaces) do not require long term
commitments. This creates a moderately higher degree of risk for the
owner-operator of the coworking space. Additionally, most coworking spaces
include numerous amenities as part of a flat rate program. These amenities
often include high speed internet, complimentary snacks, access to conference
rooms, and other benefits. This is usually done in order to create a
competitive advantage over other coworking space providers.
As it relates to geographic
location, these types of businesses are very popular in major metropolitan area
markets where large scale commercial office space is extremely expensive. Major
metropolitan areas where coworking spaces are prevalent include New York, San Francisco, Miami, Los Angeles, San Diego, and Chicago.
In markets where startups are popular, coworking spaces can be found
frequently.
As it relates to the industry,
there are approximately 2,000 companies that provide office space in a
“coworking styled” capacity. Each year, these businesses aggregately generate
$3 billion per year. The year-on-year growth of this industry has remained near
6% in each of the last five years. This rate of growth is substantially higher
than that of the economy as a whole as well as for the commercial real estate
leasing industry. This trends is expected to continue for at least the next ten
years. It should be noted that the revenues of coworking space industry is very
sensitive to negative changes in the economy. During recessions, many
freelancers will turn to becoming employees of established businesses. This
causes demand for rentals to drop substantially. As such, coworking space
companies often need to keep a substantial amount of cash on hand to deal with
low occupancy rates.
In order to remain economic
stability, well capitalized firms will often seek to purchase the building that
houses these operations. This allows for a mix of coworking space rental income
coupled with standard long-term leases. This often alleviates the risk associated
with leasing a facility with the intent to subdivide it into coworking spaces.
Most financial institutions are very welling to provide the necessary capital
in order to acquire a commercial building for this purchase given that real
estate is excellent collateral for a debt obligation.
Overall, the industry outlook for
this industry is moderately strong. The returns on investment can be
substantial during times of strong economic growth. As more people become part
of the “gig economy”, the demand for shared office space should remain stable. Only
severe and prolonged economic recessions have a major deleterious effect on
these businesses ability to generate revenues and profits.
For all aspects of life, most
people want to have some form of insurance. This includes home insurance to
protect a residence against catastrophe, car insurance for the same reason, as
well as ancillary insurance lines including general property & casualty,
life insurance, and supplemental insurance. Given this demand, the number of
underwriters and insurance agents has exploded over the past thirty years.
Additionally, as many more people are now entrepreneurs – the demand among
business owners to have comprehensive insurance is substantial. Almost all
businesses need to carry some form of business liability insurance while
concurrently having often state-mandated workman’s compensation insurance.
Nearly all states require that purchases of insurance are conducted through
licensed insurance agents that have production licenses.
Within the United States,
there are more than one million actively engaged in the sale, marketing, and
production of insurance. The aggregate revenues generated by these agencies
remains around $150 billion per annum (which includes fees from the issuance of
new policies as well as recurring fees). One of the strongest aspects of this
business is that recurring fees are continually generated when an initial
customer renews their policy on an annual basis. For established insurance
agencies, this allows these businesses to remain profitable and cash flow
positive in any economic market.
One of the other core trends
within this market is to maintain an expansive presence online. This is due to
the fact that most people now find local and regional service providers via
internet searches. Most independent agencies aggressively use search engine
optimization campaigns coupled with social media in order to boost traffic to
their respective websites. This is a highly competitive market, and any online
marketing advantage that an agent can have always provides them with a strong
foothold within their respective region. Many insurance agencies often spend nearly
8% to 10% of their aggregate revenues on marketing expenditures. This includes
traditional marketing costs such as sponsorships of schools and local
charitable organizations. Many insurance agents maintain very strong
connections with their local community.
It should be noted that the vast
majority of insurance agents operate in an affiliated capacity with a major
underwriter. The draw to this method of operation is that the ongoing marketing
expenses are substantially reduced given that the agent can use the brand name
of the underwriter in conjunction with their marketing operations. However,
this does limit the types of insurance lines that can be offered given that the
affiliated underwriter requires that only their products are offered to prospective
and ongoing clients. By operating in an independent capacity, an insurance
broker or agent can provide a much greater spectrum of choice to customers.
This is one of the reasons why independent insurance agents and brokers are
able to have a competitive advantage over affiliated agents. Given the
complexity of insurance, the demand for agents that understand this market, how
to properly insure property, and how to do this cost effectively – is
substantial.
Although many people now use
online based portals for specific types of general insurance (such as auto,
home, and whole/term life insurance), more complex scenarios and business
insurance nearly always requires the assistance of an insurance agent. This
need will continue indefinitely.
Food trucks have exploded in
popularity over the past ten years as more people have become food enthusiasts.
Unlike a traditional restaurant, a food truck is a relatively low cost way for
an entrepreneur to enter the food and beverage business. Most importantly,
these businesses reduce their operating risk by being able to travel to
different locations on an ongoing basis. Many food trucks generate substantial
revenues by attending events that showcase a broad array of cuisine to
event-goers.
Currently, nearly $2 billion of
revenue is generated each year among food trucks. This represents less than 1%
of all revenues generated from food and beverage businesses within the United States.
It should be noted that this figure only includes businesses that operate in a
mobile capacity only and does not include restaurants that operate food trucks
as part of an overall brick-and-mortar operation.
Over the past five years, the
industry has grown by nearly 525%. This trend is expected to continue in
perpetuity given the low start up costs and low barriers to entry. One of the
common trends within this industry is to maintain an expansive presence on the
internet via a proprietary website as well as through a number of social media
platforms. Many food truck entrepreneurs update their social media pages
(FaceBook, Twitter, and Instagram) with the general location of the vehicle on
a daily basis. Some companies have taken to integrating GPS tracking
functionality so that a potential customer can quickly drive to the food
truck’s parked location for breakfast, lunch, or dinner.
One of the other major trends
among food trucks is to develop applications that allow for users to receive
push notifications when they are nearby a food truck that they enjoy. This type
of functionality is typically reserved for food trucks that have already
developed an expansive fan base. Generally, the cost of developing this
application ranges from $2,500 to $5,000 depending on the level of
functionality integrated into the platform.
An additional major driver of
expanded functionality among food truck companies is to provide large scale
onsite catering. This is method of growth is popular among food truck companies
that specialize in general fare such as BBQ. Major restaurants that offer
onsite catering services will frequently use a food truck styled vehicle in
order to carry out these types of operations.
Competition within the food truck
industry is growing substantially, and the industry grows at an average rate of
5% (which is substantially higher than general economic growth). The growth of
the industry is primarily attributed to a resurgence in interest of unique
foods among the general public (with many televised programs created to
showcase this aspect of the food/beverage industry). Even major celebrity chefs
have shown a substantial interest in food trucks.
Overall, a food truck is a strong
way for an aspiring restaurateur to enter the food and beverage industry while
maintaining a low overhead and low risk for their venue.
While there are many different types of companies that have
their revenues subject to economic fluctuation, there are a number of
businesses that are generally considered to be recession proof. In this article
we take a look at the different types of companies that always tend to generate
substantial revenues and profits in any economic climate.
Accounting and bookkeeping services
Given the complexities of tax laws as well as the difficulty in maintaining a
proper set of financial records, accountants, bookkeepers, CPAs, and enrolled
agents are always able to generate revenues for their services. Regardless of
how the economy is doing, people are always going to be required to file tax
returns to both federal and state taxing authorities. As such, the demand for
these services does not wane during economic difficulties. These businesses are
able to generate very high gross margins from the per hour fees that are
associated with completing bookkeeping, managing payroll, filing tax returns,
and engaging in other activities that are common to this type of business.
Funeral Homes
It is the unfortunate fact of life that everyone will pass away at some point.
Even during times of economic recession, people will continue to pass away and
require the services of funeral homes and funeral director businesses. These
companies are always able to generate substantial revenues from mortician
services, sales of caskets, cremation services, as well as making arrangements
for funeral services. These businesses typically are the most stable industry
given the fact that they are able to thrive in any economic climate. The start
up expenses associated with the new funeral home are considered to moderate,
and these businesses – given their strong level of economic stability – have
readily available access to capital from banks and financial institutions.
Almost all lenders are willing to provide the necessary money needed to
establish a new funeral home business.
Healthcare Practices
Healthcare practices which include doctors, dentists, nurse practitioners, and
allied healthcare professionals are always able to produce substantial income
for their owners given the demand for the services in any economic climate. One
of the interesting aspects of this type of business is that they enjoy very
high barriers to entry given the fact that the practitioner must have completed
a substantial amount of education while conforming to a number of licensing
requirements. As such, this is not a business that can readily be started by
any individual that is looking to become an entrepreneur. As it relates to
licensed healthcare practitioner seeking to establish their own practices,
almost all financial institutions are willing to provide nearly 100% of the
capital necessary in order to establish a new medical, dental, physical
therapy, surgical, or related healthcare business.
Information Technology
Given the ubiquitous nature of the Internet and secure information technology
networks, the demand for IT consulting firms and IT networking companies is
substantial. These companies always generate highly recurring streams of
revenue given that they typically operate on a month-to-month service contract
with their clients. For entrepreneur that is looking to establish a recession
proof business, this is an outstanding opportunity. There is no formal
licensing or educational requirements in order for company to hold itself out
as an IT consulting firm. Additionally, many of the instructional courses
needed in order to provide comprehensive IT services can be acquired from a
local community college. Additionally, there are substantial online resources
where an individual can quickly become trained in the field of information
technology. These businesses have minimal startup costs, and they can be started
for as little as $10,000 if the owner-operator establishes a very small office
and primarily works at the site of clients.
This is one of the fastest growing industries within the United States,
and it will continue to become one of the largest and most profitable industries
over the next 20 years.
Pet Care Businesses
As many people own dogs and cats, the demand for comprehensive dog walking, pet
sitting, and general pet care businesses is substantial. Yearly, more than $50 billion
is generated on services specific for pets that live in the homes of their
owners. These businesses have next to no startup costs given that an individual
can simply establish a small website, distribute business cards, and post
flyers in community centers in order to create a local brand-name. Once
established, these businesses are able to generate highly predictable streams
of revenue from the daily services rendered to the client base. Additionally,
these businesses are very scalable as additional pet care technicians can be
hired to render services to a greater number of clients.
Retail Entertainment Businesses
Although retail entertainment businesses, such as arcades, bars, and related
entities offer a service that is not a necessity – these businesses are almost
always able to generate substantial revenues and profits given that they are
low-cost form of entertainment. During sharp economic declines, many people
will opt to go to retail entertainment facilities rather than taking an
expensive vacation. As such, the high gross margins generated from services
allow these businesses to provide entertainment that is affordable in all
economic climates. One of the recent trends among these businesses, especially
among arcades, is to develop a membership base that allows individuals to pay
monthly fee in exchange for being able to access the facility on an ongoing
basis. These recurring streams of revenue further add to the economic stability
of these companies.
Commercial Cleaning Services
Most commercial enterprises need to have clean and neat offices in order to
attract a customer base. Most commercial cleaning businesses often provide
their services on a monthly contract basis, which allows them to generate
highly recurring streams of revenue. Additionally, many wealthier homeowners –
who are less swayed by negative changes in the economy – are typically always
able to afford in-home cleaning services. As such, these businesses are
generally able to remain profitable at all times given their strong demand
among commercial, residential, and industrial clients. These businesses do have
moderate sort of costs, but these companies can be found for about $50,000
depending on the type of equipment and vehicles that we purchased for the start
up.
Specialized Contractors
In any economic climate, individuals are going to continue to have issues with
their homes and buildings that they own. As such, most contracting focus
businesses are able to continue to remain profitable in any economic climate.
It is no secret that homes will often have certain appliances and systems that
break down, and regardless of how the economy is doing – people are going to
need repair services for the systems. Specific types of contracting businesses
attend always remain profitable include HVAC contractors, roofing contractors,
plumbers, electrical contracting businesses.
Within Philadelphia
there are a number of exciting business opportunities that an aspiring
entrepreneur can capitalize on given the rapid growth of this market. In this
article, we discuss several different types of businesses and services that are
in demand within Philadelphia:
Restaurants, Bars,
and Nightclubs
Foremost, one of the most exciting areas to enter within the Philadelphia market is the food and beverage
based businesses. Given the large population, there is always a substantial
demand for food as well as nighttime entertainment. Within many of the major
up-and-coming areas of Philadelphia,
there are a number of people that are interested in experiencing unique
cuisines. Additionally, the demographic profile of the Philadelphia metropolitan area is now skewing
towards younger people. As such, the demand for nighttime entertainment – which
includes bars, sports bars, nightclubs – is fast growing. As more and more
young people move into cities in order to find higher-paying jobs, the demand
for quality venues for nighttime entertainment and eating become greater. In
many areas of Philadelphia,
there are still retail locations that can accommodate a large-scale food and
beverage business affordably.
Professional Cleaning
and Janitorial Services
Given that there are many busy professionals within the Philadelphia area, the demand for clean
houses and offices is substantial. As such, janitorial and home cleaning
services are another very popular and economically viable business that can be
started at a moderate cost within the greater Philadelphia area. One of the nice things
about these businesses is that they generate highly recurring streams of
revenue especially when companies engage in janitorial services for commercial
and industrial enterprises. Given the high median incomes of the Philadelphia market,
especially among busy professionals, the demand for quality in-home cleaning
services is also very significant. These businesses can be started for as
little as $50,000 and they typically become profitable within the first year of
operation.
Accountants, Lawyers,
Doctors and Dentists
The large population base of Philadelphia
lends itself to having a number of professionals that need to render services
to the general public. This includes practices such as CPAs, attorneys,
physicians, surgeons, and dentists. In major metropolitan areas, the demand
among licensed professionals is always substantial. Additionally, the per-hour
billings are typically higher than that of when these services are rendered in
a suburban or more rural market. One of the other interesting things about
these businesses is that they enjoy high barriers to entry given the
substantial educational requirements of the owner.
Personal Transportation Services
Transportation services are also extremely popular in major metropolitan areas; especially Philadelphia which has a substantial issue with the amount of parking that is available for residents. Given that this is a major metropolitan area, many people opt to not have a car when living or residing in the greater Philadelphia metropolitan area (and especially within the city limits). As such, taxi services, limousine services, and other companies that maintain large fleets of vehicles for personal transportation are almost always profitable in this market. Additionally, with the advent of applications such as Uber and Lyft – these businesses can immediately begin to generate revenue once they acquire their vehicles.
Freight
Transportation
Trucking and transportation businesses are also extremely important in the Philadelphia area given that many wholesalers and retailers need to move large amounts of merchandise throughout the city. Much like transportation companies that focus specifically on individuals that need to get from point A to point B – freight services are another highly profitable and highly economically stable business within the Philadelphia metropolitan area.
IT Consulting and
Networking Services
Given that the greater Philadelphia market has a substantial business startup scene, the demand for high quality information technology services and information technology consulting is also significant. One of the nice things about owning an IT focused business is that they almost always generate highly recurring streams of revenue on a month-to-month basis for service contracts. These businesses are able to provide secure networks especially for businesses that handle a substantial amount of sensitive materials. One of the other great things that these businesses is that their revenues are completely immune from negative changes in the economy given that both companies and individuals need to have properly installed and maintained networks in their businesses and homes. This will continue to be a major source of growth within the Philadelphia area.
Coworking Spaces and
Rentals
As relates to real estate, co-working locations are also very popular in this market. This is due to the fact that many people now work as freelancers or as small entrepreneurs and need to have office space on a short-term basis. Coworking companies have become extremely popular in almost all major metropolitan areas given the trends of more and more people working within the gig economy rather than having a full-time job. These businesses typically have moderate startup costs depending on whether or not the owner acquires the building that is going to be used as a co-working space. However, one of the slight downside to these businesses that during times of economic recession – their revenues often suffer a bit given that more people will seek to have full-time employment rather than operating as a freelancer or independent entrepreneur.
Real Estate Agents
and Brokerages
Further into real estate, real estate brokerages are almost always able to remain profitable and cash flow positive in the Philadelphia market given that people are always looking for business space, home rentals, and to purchase a real estate. This is one of the most mature industries within the United States, and their revenues typically mirror that of the general economy and the housing economy as a whole. Given the substantial demand for real estate within this market, almost all real estate agents and brokers are able to make a decent living providing the services to the general public.
Property Management
Firms
Finally as relates to real estate, property management firms are very much in demand in Philadelphia. There are a number of companies as well as wealthy individuals that own a number of properties that need to be properly maintained on a month-to-month basis. Property management firms always earn a highly recurring stream of revenue from providing the services on an ongoing basis. One of the common trends within this industry is to offer flat rate property management services rather than taking a standard 10% of aggregate rental fees. This is one of the ways that many newer property management firms are able to effectively compete with established companies within these markets. For individuals or companies that have the proper license to operate as a property manager business – there are substantial and lucrative opportunities in the Philadelphia metropolitan area for companies that want to be engage in this type of activity.
Pet Care Services
As with the rest of the millennial generation, pets have become an important part of daily life. Many people between the ages of twenty to thirty-five have decided to either not have children or start a family much later in life. As such, many people acquire a dog or cat in lieu of starting a family right away. As such, the demand for quality pet care services – including daily pet walking services – is substantial in this market. Although some people do bring their pets to work, this is very uncommon and most pet owners need to have their dog cared for during the course of the day while they are at work. As such, a pet care agency that offers both pet walking services as well as overnight care can be a highly profitable business for an entrepreneur that is looking to start a low-cost business. These companies are highly scalable.
Pitch decks have become very popular over the past five years as more
people want to see information regarding a business displayed in a clear and
concise manner. Of course, nearly every individual investor or financial
institution that requests the pitch deck will more often than not request the
business plan as well. In my experience, as a seasoned business plan writer, I
have found that the best way to develop a pitch deck is to first complete the
full business plan. The vast majority of the information that is put into a
pitch deck is typically drawn specifically from the business plan. This is
especially true as it relates to the financial portion of a business planning
model that is going to be showcased within a PowerPoint presentation.
A well-written pitch deck should be no more than
15 slides. However, there are exceptions to this rule especially if the
business is engaged in a highly specialized technology or has significantly
difficult operations to manage. For a general pitch deck that is specific for
capital raising, 15 slides is usually more than enough. Below is a breakdown of
how we develop each slide.
Slide
Section One
The first slide should focus heavily on providing information in a bullet-ed point fashion regarding the business. This includes the name of the business, how much money is being raised, whether this capital is coming as an equity investment or loan, and it brief overview of the products and services that are going to be provided. Usually, 18 to 24 point font should be used so that it is very easy to read.
Pitch Deck Introduction
Slide Section Two
In this section it is important to provide a brief overview of the products and services that are offered. This can be expanded into two slides especially if the business has proprietary technology or a specialized operational method that sets the business apart from its competition. Again, it is very important to be as brief as possible in this part of the presentation as many people often go overboard with the amount of information they include in this aspect of operations.
Slide Section Three
Here, it is time to discuss the market analysis. Unlike the business plan, the market analysis that is included within a PowerPoint presentation or pitch deck should be kept to a minimum. For local businesses, this can include showcasing the target demographics of the business while providing an overview of how many people fall into the company’s target market radius. For businesses, such as online focused companies, a substantial focus can be placed on the potential number of people on either a national or global level that could become potential users or customers of a company’s services or products.
One of the important keys to developing a pitch deck that stands apart is to include a number of different graphics that can be clearly showcased to a potential funding source. The pitch deck, again, is generally meant to create a substantial amount of interest in the business while focusing on the fact that a full business plan is available upon request.
Slide Section Four
In this slide, it is time to discuss the marketing. Again, much like any other aspect of this document – a specific focus should be placed on using bullet point overviews in less there is some highly proprietary marketing strategy that will be implemented by the business.
Marketing Plan – ROI Analysis
.As with all businesses these days, it is very important to focus substantially on the online marketing strategies will be used specific for your organization. If your business is an online company then it is appropriate to develop this part of the pitch deck as up to a three-slide overview of how you will be conducting your marketing operations. Specific topics that many funding sources want to see within a pitch deck specific for marketing is how the brand will position itself online through the use of social media as well as search engine optimization. One of the other tables that can be included in this part of the pitch deck is the anticipated return on investment that will be generated from each dollar of marketing expenditure undertaken.
Slide Section Five
Here, the anticipated financial results of the business are provided to a potential funding source. This includes images of the profit and loss statement, cash flow analysis, and balance sheet. Additional metrics such as a breakeven analysis, common size income statement, and business ratios can be kept off of the pitch deck as this is usually shown very thoroughly within the business plan self. Below are images of how the financial statements are showcased within a pitch deck document:
Finally, an overview of the biographies of the founders and management team should be included in the section. This can usually run anywhere from 1 to 4 slides depending on the expertise of the individual as well as the number of people that are on board with this business.
If any specific individual is extremely well known in the industry or has had substantial success with similar businesses then this should be clearly highlighted within this part of the pitch deck. Most importantly, keep this section to an absolute minimum in less it is completely imperative that a full resume or curriculum vitae is shown to potential funding source. The only true instances where a full resume should be included within a pitch deck is if the business surrounds the highly specialized expertise or professional background of the owner or management team.
Slide Section Seven
On the final page, we include information regarding how to contact the point person for the business, and we reference the fact that a full-scale business plan is available upon request. Usually, the name, address, email address, and contact phone numbers are included in this section. If the business already has a website available to view, then this information should be included as well on the final slide of the pitch deck.
Conclusion
A pitch deck is a great way for a company to gain immediate exposure from a potential funding source. Again, these days people are inundated with information on a daily basis and having a pitch deck that can quickly convey exactly what you’re looking to achieve, the anticipated financial results your business, and your specific funding request. This can go a long way into having a funding source thoroughly review your developed business plan. In subsequent articles, we’re going to discuss how you can create other forms of presentation that will create a substantial amount of interest in your business.
Thank you for taking the time to review this article, and we want to note that we offer more than 550 different business plans and pitch decks on this website. Please feel free to browse our entire selection, and if you have any questions you can always reach us at our email address info@bizputfundingresource.com or via live chat below.
A complete step-by-step guide (with pictures and free downloadable business plan template) that guides you through the entire business planning process.
For many entrepreneurs, writing a business plan can be an
extremely daunting task. Many people are intimidated by the amount of content
that needs to go into the business plan, and they are often unsure of how to
properly write one. In this guide, we will down each of the steps that are
necessary in order to complete a comprehensive business plan.
First, our sales pitch. If you are having difficulties developing a business plan on your own, our website provides a number of templates that you can use to assist you in this process. Each plan that is showcased on this website is specific to its title. The package includes a word document with a completed business plan that you can alter or modify to your needs. Additionally, each package includes a number of other support materials including Excel files that will assist you in developing the financial portion of your business plan.
Please download both files. Also, please note that the purchased version is far more comprehensive. We have 550 different business plan templates available.
On the quick side note, if you are truly struggling with developing a business plan then there are many professionals that can assist you without the process. Over the past 14 years, I have written more than 4,000 business plans on a domestic and international basis. At this point, writing a business plan is basically bodily function. Many people do feel that it is sort of cheating to hire someone to develop a business plan on your behalf. However, and although I may be biased here, this is simply not the case. Many entrepreneurs have a perfect vision of how they want to develop their business and simply struggle with putting down their concept onto paper in a presentable format. My firm specializes in developing comprehensive documents that are specific for capital raising among investors as well as financial institutions. We take our clients vision and simply transform into a beautiful presentation that any person can read and understand. As such, if you find yourself continuing to struggle with developing a document then it may be in your best interest to hire a third party to help you.
Now onto the guide. First, let’s talk about how a good business plan is written. When we develop business plans, we first produce the market research for the document. As this serves as the foundation for a good business plan, it is important to do this that first. Many people try to start the work by writing out their executive summary. However, I have found that it is best to wait until the very end to write the executive summary as a well written executive summary acts as a guide for the rest of the business plan.
Completing the Market Research
There are a number of online resources that you can use when developing your market research. First, let’s look at the important sections that need to be included in this part of the business plan. The first section is generally an overview of the economy as a whole and how a negative change in the economy can impact your business operations. Specific points that should be discussed in a one to two paragraph section including the current unemployment rate, current interest rate environment, prices of assets among all classes, as well as of where the economy is heading. At the time of this writing, October 2019, unemployment rates have remained very low while interest rates have remained low as well despite substantial increases in asset prices. The trade war between China and the United States may impact the economic climate moving forward. Tariffs have caused the prices of many common goods to increase substantially as a majority of consumable products within the United States are manufactured in China and other overseas markets. Additionally, other issues pertaining to currency valuations can impact the economy moving forward. This is a strong example of specific things that should be discussed in the economic section of your market research.
The next section of most business plans deal with the industry analysis. This includes taking a look at the industry or industries in which you are going to be operating, the number of people that are employed by the industry, annual revenues generated from all businesses included within the industry, as well as any market trends. For most industries, they are highly established. For instance, an industry like the food and beverage service is not going to have very many changes in the way that they conduct business moving forward. Restaurants and other eateries have been around for hundreds of years, and they typically have growth rates that are in lockstep with the economy as a whole. However, if you are in a business such as financial technology – then you may need to conduct a much more in-depth analysis regarding trends within this industry. This would include discussing major competitors, any pieces of legislation or regulation that may impact your business, and other facets of operation that are going to need to be addressed on an ongoing basis.
Third, in this section it is also important to outline the average customer profile or user profile of your services or buyer of your products. This includes examining annual median household income, age, gender, as well as any specific types of character traits that are specific to the type of product or service that you are offering. In this section, many people also outline the estimated number of people within the target market that would be potential buyers. This is extremely important especially for local or regional businesses as you want to ensure that you’re going to have enough people within your market to support an economically feasible business. For instance, returning to our discussion regarding a restaurant, you’re going to want to look at population size and population density as compared to the number of other restaurants within your target market. This will ensure that in any given night there are a number of people that are willing to come to your restaurant so that it operates near 100% capacity. For other businesses, such as online businesses, you may want to take a look at the number of people within a specific country or on a worldwide basis that are potential users of your services.
Fourth, in this section we typically discuss the competitive issues that a business will face as it progresses through its launch as well as ongoing expansion. For local and regional businesses, conducting a competitive analysis is relatively easy given that you’re familiar with the area and can simply find what competitors are offering products or services that are similar to yours. An examination of competitors should include their estimated annual revenues, number of employees, and how long they have been in business. A more subjective overview of a competitor includes the strength of their brand name, how long they’ve been in business, and their market reach. For larger scale businesses, such as online businesses, it is slightly more difficult to carry out a competitive analysis given that you’re going to have to find companies that operate throughout your entire country or on a worldwide basis. Conducting this type of market research is little more of an involved process but can be easily achieved through use of search engines. When carrying out these types of operations you should use specific keywords and phrases that are specific to the products and services that you’ll be selling. This will allow you to see the more prominent competitors within your field.
One of the ways that you can make your market research stand out is by developing a number of charts and graphs that are specific to your industries. Below are some links to companies that you can use to acquire graphics specific for the industries that you operate within:
After the market analysis is done, it is time to develop the financial plan. Most business plans have a three-year to five-year pro forma financial model included. Generally speaking, it is very difficult to estimate anything beyond a three-year period. A financial plan consists primarily of three parts: a profit and loss statement, cash analysis, and balance sheet. It is also important to include other metrics such as the breakeven analysis as well as important business ratios that are applicable to your operations.
As it relates the profit and loss statement, this table showcases your revenues, cost of goods sold, your operating expenses, as well as your pre-tax profit. The profit and loss statement showcases your estimated taxes as well as any interest expense that you may incur. Below is an image of a standard profit and loss statement:
Profit and Loss Statement
Profit and Loss Graph
Relating to the profit and loss statement is the cash flow analysis. Here, in overview of the cash coming in and cash going out is showcased. Although this may seem very similar to the profit and loss statement, it is actually very different. The top line of the cash analysis showcases the net profit of the business. The net profit is the income that is generated after all expenses including taxes and interest are paid. The cash flow analysis showcases any equity investment that has and made into the business, any increase in borrowings, accounts payable, accounts receivable, as well as any asset purchases that are made and any dividends that are distributed. Below is an image of a standard cash flow analysis:
Cash Flow Analysis
Cash Flow Analysis Bar Graph
When developing a financial plan, this is where most people start to have some issues. Most people commonly understand the concept of a profit and loss statement as it is simply a measure of income generated minus all expenses. With a cash flow analysis, certain metrics and deductions are made that do not impact the profit and loss statement. One of the key things to note as well is that if you are taking on a business loan to develop your business then the interest is deducted from the profit and loss statement while the repayment of principal is deducted from the cash flow analysis.
Once the cash flow is completed then it is time to finalize the balance sheet. This is a measure of all assets owned by the business minus all liabilities. Common assets that are acquired by businesses include furniture, fixtures, and equipment, the cash that is held in a bank account, as well as any inventories that are carried. A balance sheet looks like this:
Balance Sheet
As it relates to liabilities, this includes any payables that are owed to third parties, tax liabilities, as well as any outstanding business loans or lines of credit that have been taken out in order to launch or expand the business. The value of the company is calculated by subtracting the total value of assets minus the total value of liabilities. It should be noted that there are certain instances where you may have negative equity. However, this is done more of a managerial standpoint basis. If you are having certain issues developing your balance sheet or if you are an existing business then may want to consult with a certified public accountant that can assist you with developing this part of your business plan.
On a quick side note, your certified public accountant will be an invaluable resource not only for managing your tax issues and accounting issues, but also for business advisory perspective. They can assist you greatly with developing your business plan while providing you with insightful advice about the best way to expand your business or organization. Most CPAs are very affordable for most small business owners.
Once the profit and loss statement, cash analysis, and balance are completed then it is time to carry out some other calculations. First, you’re going to want to take a look at your breakeven analysis. This segment of your financial plan will showcase how much revenue you need to generate on a monthly or yearly basis in order to reach breakeven. This is a very important metric that most business owners use in order to ensure that they can reach profitability quickly. This calculation is completed by taking a look at your total fixed operating expenses and dividing by the amount of gross profit that needs to be produced on a monthly or yearly basis. A sample breakeven analysis is shown below:
Breakeven Analysis
A common metrics table is usually included within the financial planning part of the business plan document. Key metrics that are examined in this table usually include sales growth, assets to liabilities, assets to equity, as well as certain metrics regarding liabilities to amount of cash on hand. Some of these metrics are a little bit more theoretical in nature given that certain circumstances do not occur in the actual business world. However, many of these metrics showcase the overall financial health of the business. Many lenders as well as many investors frequently want to see these metrics charted within a business plan.
Business Ratios Chart
Products, Services, and Operations
In this section analysis, it is time to showcase the products and services that will be offering to your customers or clients. This is the section of the business plan that can be a little bit more sales focused as a relates to connecting with your investor or funding source. Generally speaking, a more scientific and clinical approach is taken to writing the rest of the business plan to showcase the feasibility and economic viability of your planned business. In this section, however, you can thoroughly discuss why you are offering an outstanding product or service that will be in demand among a number of consumers or clients. In most business plans, this section of the business plan ranges anywhere from one to four pages. If you are offering a number of products or have developed a proprietary product then you can also include images in this section of the document.
One of the other things that is frequently discussed in this
section of the document as well is the overall operations of the business. This
includes discussing matters such as customer service, hours of operation,
layout of any retail facility, and other pertinent information as it relates to
properly providing the service or selling your product to the general public.
Another point that is discussed in the products
and services section is the pricing that is associated with your product line.
It should be noted that if you offer a number of products, such as hundreds of
products, it is in your best interest to reference a product catalog that can
be seen separately from the business plan. One of the common mistakes that I
see when I’m reviewing business plans that people have written on their own is
that they list every single product that they offer in this section of the
business plan. In order to keep the business plan as short as possible, a
product catalog can be included as a separate document so that a funding source
can review it should they choose to do so.
The
Financing
In this section of the business plan, in overview of the capital you are seeking to raise is discussed. Most importantly, a table should be created that allows you to show the funding source to see exactly how these funds are to be used. If you are purchasing substantial pieces of tangible assets then you may want to list them all within the section, but keep in mind that brevity is important. Below is a sample table that showcases what a use of funds chart generally looks like:
Use of Funds Table and Chart
Other important aspects of this section of the business plan include discussing the equity that we provided to a potential investor should they place money with your company. Additionally, the current ownership structure the business is discussed in the section as well. Finally, this section generally ends with an overview of the exit strategies that will be associated with your business.
In nearly all circumstances, as it relates to exit strategies, a business is sold, in whole, to a third-party. While many people discuss the usage of an initial public offering, the fact of the matter is that very few companies actually go public. In fact, there are only tens of thousands of business is in the United States are publicly traded. The remaining 100 million businesses are privately owned and operated, and are eventually sold to third parties for substantial earnings premium. One of the key things that should be discussed with in your exit strategy is the anticipated price to earnings multiple that similar businesses in your industry self or on an ongoing basis. This will assist the funding source, especially an investor, with an understanding of how much the business could potentially be worth by the 3rd to 5th year of operation. In many other instances, you can also include a pro forma valuation table that showcases the potential valuation based on profitability.
The Overview of the Organization
In this section the business plan, general information regarding launch dates, mission statements, mission statements, and organizational values are showcased. This section of the business plan is usually placed in the middle of the document. In business plans that I write professionally for people, I put this as the fourth section of the business plan.
One of the key components of this section of the business plan is the development of a proper mission statement. For many smaller businesses, this can be less of a priority as are simply trying to convey that you are trying to provide a great product or service to the general public, while developing a profitable enterprise. For larger companies, especially those with proprietary technology or a proprietary operating methodology, this is a little bit trickier as you want to clearly state exactly what you’re organization is looking to achieve on a very large scale level. This is something it takes a little bit of time to develop, and you can actually keep this part of the business plan open ended as you complete the rest of the work. Many people often take one month or two to develop the proper mission statement. It should be noted that this is a relatively small aspect of the overall business plan, and most financial institutions – especially for smaller businesses – do not place much weight on a properly developed mission statement.
The Marketing Plan
Of all the sections of developing a business plan that I enjoy writing, the marketing plan is my favorite. This is primarily due to the fact that you can outline exactly how you want to position your product or service and business to the general public. In this section, is important to start with a bullet outline of specific objectives that you’re going to look to achieve on a yearly basis. This includes discussing how to maintain a major presence on social media, carrying out comprehensive print campaigns, as well as developing a loyal customer base that will refer customers or clients to your business on an ongoing basis.
One of the things that I often include in the section of the business plan is a breakdown of all revenues generated by the business by product category. Below is an image of what this table looks like:
Revenue Center Chart
As you can see, in this example I show that three different products and two different services are being provided to the general public. This is an important table as well as an important part of the marketing plan as it shows exactly where your revenue centers and profits are coming from on a yearly basis. This is something that can be thoroughly discussed within the marketing plan as it relates to pushing specific services to your potential customer base.
An overview of the yearly sales, in word format, is often discussed as well in this section. Primarily, in overview of first-year sales and second-year sales are thoroughly discussed while third year to fifth year sales are mentioned briefly to showcase the operations of the business once it is fully established.
The marketing strategies that you’re going to use to promote your business need to be thoroughly discussed within the section of the business plan. Generally, this section should run one to two pages. This includes, again, discussing all the ways in which you will promote your business. One of the interesting things about writing a marketing plan these days is that a heavy focus must be placed on online marketing activities. This includes the use of a proprietary website as well as maintaining a presence on popular social media platforms such as FaceBook, Twitter, and Instagram. Many marketing plans also include a discussion regarding usage of platforms like YouTube to develop video commercials and presentations that will showcase products and services to the general public. One of the interesting things about online marketing is that many of these platforms are completely integrated with one another. If you develop a video presentation for your business you can seamlessly share it on other social media platforms once it has been uploaded to YouTube. These are all topics that should be very thoroughly discussed within your business plan.
For local and regional businesses, special importance remade in regards to showcasing a traditional print marketing campaign, distribution of mailed flyers and brochures, as well as establishing relationships with other organizations in your target market. Many small business owners find that they are able to generate a substantial amount of business by becoming members of their local chambers of commerce as well as joining a number of other small business organizations. For instance, when we develop a business plan specific for a real estate brokerage we focus heavily on that individual and business becoming enrolled in his many organizations as possible in order to develop a referral and business network.
The Personnel Summary
In this section of the business plan, we outline of the organizational structure is provided. Below is an image of a simple organizational structure specific for a delivery business:
Organizational Chart
Additionally, this section of the analysis also includes a chart showcasing the different types of employees will be hired, their pay, and headcount of the business. A sample chart showcasing this looks as follows:
Personnel Summary Chart
One of the other common things that is put into this section business plan is the biography of the founder. This includes discussing all relevant biographical information, work experience, and educational credentials. This can be kept somewhat short and it should not exceed more than three to four paragraphs. Generally, we write a biography for the owner and then reference the fact that a resume or curriculum vitae is available upon request or is it included as part of the overall business plan package. SWOT Analysis
This is usually one of the appendices that we include in each of our business plans. A well-developed SWOT analysis focuses on the strengths, weaknesses, opportunities, and threats that are going to be faced by the business on ongoing basis. Generally, we do this in a bullet point fashion and it should not be more than one page. Critical Risks and Issues Section
As any entrepreneur knows, nothing ever goes
according to plan. As such, it is important that a page that is specific to the
issues that a business may face is included as well. This is of tremendous
value to any potential reader – including private investors and financial
institutions – as it will show that you have properly prepared for major issues
that may occur as you progress are your business operations. Generally, we
break this down into five sections.
The development risk paragraph focuses on issues
that could occur during the course of start up. The primary development risk
for most startup companies is their ability to acquire the capital that is
being sought in the business plan, while concurrently launching
revenue-generating operations.
The financing risk paragraph focuses heavily on
the usage of funds, and what would happen in the event that the business does
not work out as planned. For instance, an example of discussing the financing
risk for restaurant would be to focus on the fact that a substantial amount of
furniture, fixtures, and equipment as well as other tangible assets are going
to be purchased with any debt capital or equity capital from a funding source.
The high margins that are generated from food and beverage sales generally
offset ongoing risks relating to this type of financing. In the event that a
business is liquidated, the tangible assets can be used to pay back any funding
source.
The marketing risk paragraph is followed after
the financing risk paragraph. This discusses the marketing strategies that will
be used in order to promote interest in the business and its products and
services. It should be noted that many marketing strategies are relatively
expenses, and they can often not produce the revenue results that are
anticipated in a business planning document.
Valuation risk is followed by the marketing risk
section. This discusses the potential returns on investment for an investor
should the business not produce as much profit as anticipated in the financial
plan. This can be done on a bulleted point basis.
Finally, exit risk is discussed. For many
businesses, it takes anywhere from 1 to 2 years to properly prepare and sell a
business to a third-party. As such, issues pertaining to liquidity as well as
how long it would take to properly sell the business for an appropriate price
to earnings multiple should be discussed in this paragraph.
Although this is a lot of content, this can all
be included on one page.
Reference
Sources
In this section of the analysis you should include a list of all reference sources ever used in regards the business plan.
Executive Summary
This now takes us to the executive summary. Of all the sections of the business plan, this one is the most important sections is it is designed to capture a reader’s attention immediately. There are a number of different ways that you can go about writing your executive summary, but we have developed a streamlined approach that allows the executive summary to state exactly what you’re looking to achieve all acting as a guide for the rest of the business plan. A well-written executive summary should be about two pages in length.
First, your opening paragraph to discuss the type of industry they are operating within, the name of the business and where you’re located, and how much capital you’re looking to receive in order to launch or expand operations. The names of the founder and owners should also be included within this paragraph. One of the other things that we include is the anticipated start date or quarter of starting or expanding revenue-generating operations.
Second, a two paragraph overview of the products and services that you are selling should be included next. This includes any specific information regarding any proprietary technology or proprietary service that you will be offering to the general public.
Third, an overview of the management should be included as well. This is important if your business requires specialized expertise is required by the owner or any key member of the management team. You do not need to put a substantial amount of biographical information in this section edits it is covered in the personnel summary. References to varying aspects of the business plan should be included as well. For instance, if you reference your background in having a substantial amount of retail experience then you should direct readers to the section of the business plan that discusses your background by chapter name.
Fourth, a quick overview of the anticipated profit and loss statements over a three-year period should be included as well. A sample image of house this looks is shown below:
Profit and Loss Summary Chart
Finally, an overview of how you intend to expand the operations of the business should be included as well. This includes discussing substantial reinvestment into marketing infrastructures, developing new product lines, creating new service lines, expanding inventories, as well as the potential development of additional locations if this is applicable to your business.
Expanded Profit and Loss Statements and Cash Flow Analysis
In this section business plan, it is common to include a profit and loss statement and casual analysis that is showcase monthly for the first year of operation as well as quarterly for years two and three. These charts looks as follows:
Profit and Loss Year 1Profit and Loss Year 1 Cont.
Year 2 Profit and Loss Statement
Year 3 Profit and Loss Statement
Year 1 Cash Flow Analysis
Year 1 Cash Flow Analysis Continued
Year 2 Cash Flow Analysis
Year 3 Cash Flow Analysis
Preparing Your Business Plan For Distribution
The vast majority of business plans that are developed are transmitted electronically as either a word or PDF document. We strongly recommend that if you are distributing the business plan that you send as a PDF document as this is locked and cannot be edited by any third party. Additionally, if there is a substantial amount of sensitive material in your business plan then you can create a watermark that acts as a numbering system to parties that have received the document. This will ensure that any proprietary information or intellectual property cannot be shown to a third party. One of the common things that is also included in a business plan is a standard nondisclosure agreement. This can be included in the business plan right under the table of contents or it can be attach as a second document that must be signed by a third party before the business plan is distributed.
If you are planning to submit your document in paper format, then we strongly recommend that you take it to a printer that can put the business plan into a binder or nicely laminated folder. These companies typically charge a minimal fee for printing out a 30 to 50 page business plan and including them in a bound manner.
The Table of Contents
Most business plans follow a 7 to 9 chapter format. How you structure the business plan is completely up to you, but this is the common two types of formats that we use when developing a business plan. The seven chapter business plan our formatting is as follows:
Chapter 1 – Executive Summary
Chapter 2 – The Financing
Chapter 3 – Products, Services, and Operations Overview
Chapter 4 – Strategic and Market Analysis
Chapter 5 – Marketing Plan
Chapter 6 – Personnel Summary
Chapter 7 – Financial Plan
SWOT analysis
Critical Risks and Problems
Reference Sources
Expanded Profit and Loss and Cash Flow Analysis
In a full-scale nine chapter business plan, which include certain elements additional to a standard format a plan we use the following table of contents
Chapter 1 – Executive summary
Chapter 2 – The Financing
Chapter 3 – Products, Services, and Operational Overview
Chapter 4 – Overview of the Organization
Chapter 5 – Strategic and Market Analysis
Chapter 6 -Key Strategic Issues
Chapter 7 -Marketing Plan
Chapter 8 – Personnel Overview
Chapter 9 – Financial Plan
SWOT analysis
Critical risks and issues
Append reference sources
Expanded Profit and Loss and Cash Flow Analysis
Conclusion
Overall you can you can see that developing a business plan is a pretty in-depth and involved process. Generally speaking, it takes about two weeks to four weeks to develop a proper business plan. Professional writing services, like the ones that we offer on a customized basis typically take about a week to complete. One of the ways that you can greatly expedite this process is by acquiring a template that already has the necessary market research and financial model ready to be modified.
On this
website, again, we have 550 different business plans that are all specific to
their title. Each of these plans includes all the necessary industry research,
economic analysis, and Excel model that would be needed to complete a business
plan on your own. In areas that you need to determine on your own, we provide a
comprehensive guide on how to most effectively complete the sections of the
document.
In closing, thank you very much for taking the
time to read this article and we always encourage everyone who has any
questions to leave feedback in the comments below or you can email us directly
at info@bizfundingresource.com. You can also reach us during normal
business hours via the live chat.
