5.4: Business Plan

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Creating a business plan$^{106}$ will help you achieve your entrepreneurial goals. A clear and compelling business plan provides you with a guide for building a successful enterprise focused on achieving your personal and financial goals. It can also help persuade others, including banks (and other stakeholders), to invest in what you are creating.

Define your company. A business plan won't be useful until you're certain what your company exists for. What will you accomplish for others? What products and services will you produce or provide? Write down all the specific needs your company will satisfy. Potential investors need to know that your business will be meaningful and marketable to people who can use your product or service. Concentrate on the external needs your company will meet.

Choose a winning strategy. Once you’ve established the competitive advantage your business offers, you will be able to select the best strategy to reach your goal. How will you distinguish your product or service from others? Although there are millions of types of businesses, there are actually only a few basic strategies that can be applied to make any enterprise successful.

Design your company. Consider how will you hire and organize your workforce. By the time you’ve reached this stage of thinking about your potential business concept, you’ll probably have a good idea of the number of people you’ll need and the skills they’ll require to get your enterprise up and running.

Consider the practical issues of running a business. Think about your role as leader or boss of the business. As you think about hiring personnel and organizing your workforce, you must also confront your desire and ability to be a good boss. Decide how you will handle your employees' entitlements. For example, salaries and wages, their insurance and retirement benefits, as well as analyzing the extent of your knowledge of tax related issues.

Steps to Writing the Business Plan

Organize all the relevant information about your business. Begin creating section headings and putting the appropriate information under the appropriate headings. Effectively separating your business' unique approach to each of these headings will organize your plan in a way investors find useful:

Title Page and Table of Contents
Executive Summary*, in which you summarize your vision for the company
General Company Description, in which you provide an overview of your company and the service it provides to its market
Products and Services, in which you describe, in detail, your unique product or service
Marketing Plan, in which you describe how you'll bring your product to its consumers
Operational Plan, in which you describe how the business will be operated on a day-to-day basis
Management and Organization, in which you describe the structure of your organization and the philosophy that governs it
Financial Plan, in which you illustrate your working model for finances and your need from investors

*The executive summary should be less about the nitty-gritty details of operations and more about your grand vision for the company and where it is headed.

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Example: “Kitchen Grabs.”

EXECUTIVE SUMMARY

The need for fast, easy, fuss-free and delicious meals continue. Kitchen Grabs is a healthy alternative to fast meals.

PRODUCT AND SERVICE

Kitchen Grabs are pre-packed meals prepared daily made available in restaurants and online. The meal selection will vary per day designed by a dedicated nutritionist working with our passionate cooks to ensure that each meal approximates the dietary nutritional requirements of the average adult.

The meal selection will be made available online only on the previous day. Fresh ingredients go into each delectable dish. Upon posting, customers can pre-order for meals to be consumed the following day.

Kitchen Grabs’ restaurant, a chic and homey diner-style setup, charmingly sits on the corner of Delaney Ave. and 2nd East St., nestled in the ever-active business district of Houston. Walk-ins are welcome. Residents and workers from the surrounding buildings can order online (www.kitchengrabs.com) or through phone (4-KGRABS or 454-7227) and their meals will be delivered hot and surely delicious.

MARKET ANALYSIS

Business advisers say that the food industry is saturated, and any new entrant faces huge obstacles. For us at Kitchen Grabs, these obstacles are giants – the established fast food chains and the vending machines. Yet we cower not. We sincerely believe in our meals. Further, we strongly believe that healthy and delicious meals will never run out of patrons. In fact, customer satisfaction concerns us way more.

Our target market are adults, male and female, from 16 years old and above, residing and/or working within a radius of 8 blocks from the restaurant. They are generally subject to rigorous activities (physical and mental) and need sustenance to properly perform their tasks. Their activities take up most of their waking hours, more like, working hours. A quick meal will always be a welcome help.

SALES AND MARKETING STRATEGY

Prior to the setup of the restaurant, Kitchen Grabs was an online cafeteria. We initially served the hungry workers of several companies in Houston’s business district and they wanted more. Whenever we participated in trade fairs, the top question was whether we have a ‘real’ store; a funny question but an incessant one eventually urging us to construct our first restaurant. We will continue to attend bazaars and trade fairs spreading the word on health and available options, particularly our meals. For the next year, we intend to harness social media further.

OPERATIONS AND MANAGEMENT

The company was founded by a brother and sister tandem, Neil and Collette Viola. She studied nutrition while he trained yuppie clients. His random advice requests turned into serious discussions on health, fitness, and the inconvenience of healthy options. These became the foundation of Kitchen Grabs. Four years later, the Viola siblings still discuss how to make choosing health easier, though this time with more minds involved. Part of the team now is Dr. Linda McKann a health and nutrition consultant, George Willis with sales and operations, and Millie Dawson in finance. There is also Mama Edna Viola for taste and overall quality testing.

FINANCE

Two years into operations, Kitchen Grabs has broken even. However, as expansion was necessitated particularly the construction of the restaurant, the company secured bank loans to augment revenue. As business continues to grow, the company will be needing additional delivery riders and equipment for better service in the amount of $25,000. Appendix A computes the return of investment given the projections. Business projections predict a larger demand, an exciting new chapter for the owners and staff alike.

Possible Assignment:

Create Appendix A, mentioned above in the last paragraph.

$^{106}$“How to Write a Business Plan” was co-authored by wikiHow Staff. 29 March 2019. https://www.wikihow.com/Write-a-Business-Plan. CC-BY-NC-SA.