DoÌýyou have aÌýbusiness plan?
This essential documentÌýis not aÌý
They drive interest inÌýyour business while explaining how all its moving parts come together. They are concise andÌýimpactful while preserving professionality andÌýstraightforwardness. IfÌýyou don’t have one yet, now isÌýtheÌýtime.
Covering theÌýCover Letter
Your business plan opens with aÌýletter toÌýwhoever isÌýreading it. IfÌýyou have ever created aÌýresume, you should have aÌýgood idea ofÌýwhat aÌýcover letter is. InÌýmany ways, theÌýpurpose isÌýidentical here. You’re stating your intent andÌýwhat you plan onÌýbringing toÌýtheÌýtable. The goal here will beÌýtoÌýbreak down aÌýdetailed process toÌýwoo investors, business partners, orÌýeven initial employees. Most importantly, itÌýhas toÌýmake sense. IfÌýyou come off asÌýaÌýcrazy person, noÌýone isÌýgoing toÌýdoÌýbusiness with you andÌýyou’ll beÌýaÌýcautionary tale before you know it.
For reference, here isÌýwhat you will want toÌýmake sure you have inÌýthat cover letter:
1.ÌýAddress ofÌýrecipient
You’ll beÌýhanding this inÌýtoÌýspecific parties, soÌýmake sure this isÌýset forÌýmaximum impact.
2.Ìý¶Ù²¹³Ù±ð
Timestamp your stuff. Let people know how current theÌýinformation isÌýthat your business plan contains.
3.ÌýYour address
Keep those channels ofÌýcommunication open. Let people know where you are. This isÌýincredibly important.
4.Ìý³§²¹±ô³Ü³Ù²¹³Ù¾±´Ç²Ô
“Dear [name]” will personalize theÌýcover letter way more than you probably think itÌýwill. Make sure your intended recipient feels like you took theÌýtime toÌýmake this about them.
5.ÌýThe body
This isÌýwhere you are going toÌýhighlight exactly what isÌýgoing onÌýwith your business. ItÌýmight feel like blatantly obvious information, but stating itÌýhere will eliminate theÌýpotential forÌýincorrect assumptions. Explain that you are submitting your business plan inÌýaÌýsentence orÌýtwo, then add what theÌýreader can expect going forward inÌýyour plan.
6.Ìý°ä´Ç²Ô³¦±ô³Ü²õ¾±´Ç²Ô
Express anÌýearnest eagerness toÌýhear back from theÌýreader. Make sure that this isn’t only personalized, but that your most reliable, accurate contact information isÌýlisted here. This may beÌýtheÌýmost important part ofÌýtheÌýwhole letter.
7.Ìý°Õ³ó²¹²Ô°ì²õ
Thank theÌýreader forÌýtaking theÌýtime toÌýread even your cover letter. Time isÌýmoney, andÌýsomeone stopped what they are doing inÌýorder toÌýread your plan. ItÌýshows aÌýlevel ofÌýprofessionalism that will impress anyone that picks upÌýyour cover letter.
8.ÌýSign off
This isÌýyour final shot atÌýmaking anÌýimpact. Make sure itÌýisÌýmemorable without coming off asÌýcorny. IfÌýyou can tie your product inÌýhere inÌýsome way, you may create aÌýgreat association.
Setting UpÌýThe Title Page
The next itemÌýon theÌýdocket isÌýtoÌýcreate aÌýgreat title page. This isÌýanÌýopportunity toÌýset aÌýpositive first impression forÌýyour business itself. Make sure your title page encompasses theÌýprofessionalism ofÌýyour business. The goal here isÌýtoÌýprevent itÌýfrom looking like itÌýwas thrown together byÌýaÌýhigh school design student.
Make sure you have these important parts:
1.Your logo
Don’t have one? Get one.
2.ÌýBusiness name
Who are they working with?
3.ÌýFounder orÌýproprietor’s name (if itÌýapplies)
4.ÌýThe actual words: “business plan.”
Remember, make noÌýassumptions.
5.ÌýAnÌýimage ofÌýyour product, ifÌýitÌýapplies here.
Clip art isÌýnot allowed.
6.The date.
This isÌýyour timestamp.
After this, you need toÌýcreate aÌýtable ofÌýcontents, which isÌýgoing toÌýbeÌýaÌýlifesaver forÌýanyone that isÌýpicking upÌýthis business plan inÌýsearch ofÌýspecific information. The table ofÌýcontents will identify exact locations forÌýinformation that theÌýreader wants toÌýpinpoint, soÌýthat they can find their specific info. Some people may read theÌýwhole thing cover toÌýcover. but ifÌýthere’s someone looking toÌýfind something like theÌýbusiness outline, this isÌýwhere you show them that you have their needs covered. Make sure your sections are separated andÌýnumbered, orÌýthis isÌýall forÌýnothing.
Detailing Your Business
Now, you need toÌýhave anÌýexecutive summary. No, this isn’t about who isÌýrunning theÌýbusiness! This isÌýaÌýquick andÌýprecise snapshot ofÌýyour business plan asÌýaÌýwhole. You want toÌýfit inÌýasÌýmuch information asÌýyou can without bloating this piece.
You are clearly explaining theÌýconcept behind your business, your goals (both short andÌý
Once you’ve established theÌýexecutive summary, it’s time toÌýcreate theÌýcompany section. This part isÌý
Outlining Your Business’s Future
You have to:
Phase IÌý(the next 6Ìýmonths)
- Increase
e-commerce store traffic byÌýdrivingbrand-driven shoppers through social media campaigns. - Partner with 3Ìýlocal businesses toÌýcreate aÌý
store-to-site promotion that rewards customers forÌýshopping atÌýboth locations. - Increase social media footprint onÌýFacebook, Twitter, Pinterest andÌýInstagram byÌý25Ìýpercent.
- Run aÌýtargeted promotion inÌýaÌýlocal newspaper toÌýraise local awareness ofÌýonline storefront while testing out 2Ìýprofitable promotions.
Identify theÌýCompetition
Now that you’ve identified what you expect toÌýdoÌýhere, you need toÌýcompile aÌý“who’s who” list ofÌýyour competitors.ÌýListing out your major competition andÌýdetailing their strengths andÌýweaknesses will show you exactly what you need toÌýdoÌýtoÌýfind success, asÌýwell asÌýwhat you need toÌýavoid inÌýorder toÌýnot become another face inÌýtheÌýcrowd. That said, don’t beÌýafraid toÌýcopy good ideas while make them your own.
Identify they benefit from what they doÌýwell, orÌýtheÌýdrawbacks ofÌýcertain things that they doÌýpoorly. Once you have theÌýball rolling, identify what kinds ofÌýthreats doÌýthey pose toÌýyou. How will they react toÌýtheÌýthreat that you will beÌýcreating toÌýthem, andÌýhow are you prepared forÌýthis?
Marketing Plan
Then it’s time toÌýwrite theÌýmarketing plan. ToÌýdoÌýthis successfully, you have toÌýidentify your customers andÌýanyÌýuseful data that will make reaching them easier. Info like age, location, employment, ethnicity, interests, andÌýtheir industries ofÌýinterest will help set theÌýbackdrop here.
You need toÌýexplain what theÌýplan isÌýforÌýadvertising toÌýthem asÌýwell. AsÌýyou are inÌý
Operation Plan
After you’ve explained how your customers will know your name andÌýproduct, you will want toÌýbeÌýable toÌýshow how you will operate theÌýbusiness going forward byÌýusing key bullet points.
SuppliersÌý— IfÌýyou are selling aÌýphysical product, where are you getting itÌýfrom, orÌýhow are you getting theÌýmaterials toÌýcreate it?
FacilitiesÌý— Where are you keeping your inventory, andÌýhow doÌýyou have access toÌýit?
PersonnelÌý— Who will beÌýworking alongside you? How many people doÌýyou need andÌýwhat will they beÌýdoing?
EquipmentÌý— What sort ofÌýtools orÌýtech will improve your storefront? Are you hosting remotely orÌý
Shipping andÌýFulfillmentÌý— Create anÌýoutline ofÌýhow you are going toÌýbeÌýable toÌýtake orders andÌýmake sure that purchases are finding their way toÌýtheÌýcustomers. Are you utilizing anyÌýthird party services here orÌýwill you have partners toÌýhandle this?
InventoryÌý— How much product will you beÌýkeeping onÌýhand overall? IfÌýyou utilize
Customer SupportÌý— How are you going toÌýsupport requests andÌýhandle customers’ needs beyond simply supplying your product andÌýtaking theÌýcustomer’s money?
´¡Ìý
Financial Plan
The final piece ofÌýtheÌýbusiness plan puzzle isÌýtheÌýFinancial Plan. WeÌýare going toÌýspeak about itÌýinÌýdetail inÌýaÌýpost toÌýcome. Get ready toÌýlearn about terms like theÌýPro Forma Income Statement, theÌýPro Forma Cash Flow, andÌýtheÌýProjected Balance Sheet. But you certainly have enough information here toÌýget started forÌýnow.
SoÌýgoÌýout there andÌýmake usÌýproud!
Business Plan Example
Below isÌýaÌýsample ofÌýaÌýcoffee shop business plan forÌýaÌýfictional
Importantly, all ofÌýtheÌýfacts andÌýfigures itÌýcontains are invented, but its formatting andÌýflow are valid. Use itÌýasÌýanÌýexample toÌýinspire you asÌýyou create your own business plan!
Begin business plan:
Executive Summary
Based inÌýAsheville, North Carolina, Green Tree Coffee isÌýanÌýonline retailer ofÌý
The business currently operates entirely online, making its products available everywhere atÌýonce. Business projections have Green Tree Coffee onÌýtrack toÌýgenerate $35,000ÌýofÌýrevenue inÌýits first year, andÌýasÌýtheÌýbusiness grows, itÌýwill beÌýdoing $$350,000ÌýofÌýbusiness annually within three years. Upon meeting these projections, there will beÌýaÌýphysical Green Tree Coffee storefront open toÌýresidents andÌývisitors toÌýAsheville who want toÌýexperience theÌýsights andÌýsmells ofÌýthis coffee inÌýperson.
The business retains aÌýfocus onÌýenvironmentalism andÌýsustainability. Customers inÌýAsheville are invited toÌýbring their used coffee grounds toÌýaÌýdesignated
Research shows that coffee isÌýmore popular than it’s ever been. The average American drinks nine cups ofÌýcoffee aÌýweek. The average European drinks 11. The average South American? 13Ìýcups ofÌýcoffee each week. This isÌýwhy itÌýremains important forÌýGreen Tree Coffee toÌýfocus onÌýserving theÌýworld atÌýlarge.
The business primarily competes with Red Fern Coffee, aÌýsmall coffee distributor that works exclusively with American coffee farms. Green Tree’s value proposition andÌýkey differentiation comes from its worldwide focus andÌýattention toÌýsustainability inÌýits operations.
AtÌýtheÌýoutset, marketing will beÌýdone through social media. InÌýtheÌýcourse ofÌýher travels, founder andÌýCEO McBride has amassed aÌýlarge following onÌýTwitter andÌýInstagram. She will direct attention toÌýtheÌýGreen Tree Coffee website, make regular suggestions onÌýcoffee toÌýpurchase, andÌýshare stylish photographs pertaining toÌýtheÌý
Product will beÌýsourced from theÌýcoffee farms that McBride has personal experience working with. She has access toÌýaÌýtrust andÌýunderstanding with these niche farms that larger businesses will simply never have; she isÌýaÌýformer employee. Product will beÌýshipped inÌýbulk via conventional delivery means toÌýaÌýwarehouse space, where itÌýisÌýthen repackaged with Green Tree branding, including aÌýshort text onÌýevery bag ofÌýcoffee beans about theÌýfarm andÌýcountry from which theÌýcoffee comes.
Green Tree isÌýnot presently seeking funding, but this may change inÌýtheÌýfuture. Right now theÌýcompany isÌýentirely bootstrapped off ofÌýMcBride’s savings, andÌýshe isÌýable toÌýpurchase product atÌýaÌýgreat discount due toÌýher personal connections inÌýtheÌýcoffee industry around theÌýworld.
Our Story
After several years ofÌýworking asÌýanÌýinvestment banker onÌýWall Street, securities trader Lawson McBride was ready forÌýdrastic change inÌýevery way. She sold most ofÌýher possessions andÌýlived out ofÌýaÌýbackpack forÌýfive years while traveling theÌýworld inÌýpursuit ofÌýtheÌýbest coffee she could find. After all, coffee was theÌýonly thing she consistently enjoyed inÌýher daily life. She wanted toÌýbring that same joy toÌýothers, but she knew that she had toÌýlearn everything about itÌýbefore she could doÌýso. After working aÌýseries ofÌýmanual labor jobs onÌýcoffee farms around theÌýworld, she leveraged her industry connections toÌýbuy theÌýfirst batch ofÌýGreen Tree Coffee inventory, andÌýisÌýnow set onÌýglamorizing coffee like never before.
Green Tree Coffee’s vision isÌýsimple: theÌýworld’s coffee, brought toÌýyour doorstep. Just asÌýAmazon can frictionlessly deliver daily household necessities like toilet paper andÌýcat litter, Green Tree seeks toÌýbring rare orÌý
Current Company Status
Green Tree Coffee currently operates asÌýanÌýLLC, but will soon seek toÌýincorporate asÌýits business grows. The company isÌýprivately held entirely byÌýMcBride, though she makes noÌýsecret ofÌýtheÌýfact that theÌýbusiness depends onÌýtheÌýhard work ofÌýcoffee farmers around theÌýworld. AsÌýaÌýreseller itself, theÌýbusiness sells directly toÌýconsumers through its online
Green Tree Coffee Objectives
Green Tree isÌýintent onÌýswaying theÌýworld away from theÌýStarbucks lifestyle. Business isÌýprimarily domestic, within theÌýUnited States. Right now, theÌýfocus isÌýonÌýgrowing business toÌýbeÌýmore international. Below isÌýaÌýbusiness plan sample showing what isÌýnecessary over theÌýtime toÌýcome inÌýorder toÌýmeet such aÌýgoal.
Phase IÌý(next six months)
- whether domestic orÌýinternational, increase total sales byÌý15% through strong social media push
- grow social media following onÌýTwitter andÌýInstagram byÌý25%
- identify andÌýwork with three key brand ambassadors who can beÌý
high-profile spokespersons forÌýtheÌýGreen Tree brand inÌýtheÌýcoffee world.
Phase IIÌý(next 12Ìýmonths)
- communicate with andÌýtravel toÌýfive new coffee farms toÌýinvestigate reselling their product toÌýtheÌýGreen Tree audience
- host
coffee-tasting events inÌýthese new locales with theÌýinterest ofÌýsimultaneously drumming upÌýnew international interest inÌýtheÌýGreen Tree brand - begin investigating spaces toÌýrent orÌýbuy inÌýtheÌýAsheville area forÌýtheÌýpurposes ofÌýputting together aÌýphysical storefront
- begin outlining anÌýemployee handbook forÌýwhen theÌýtime isÌýright toÌýbegin hiring more help.
The Team
Right now, Green Tree isÌýaÌý
AsÌýtheÌýcompany grows, McBride will begin hiring hardworking coffee enthusiasts toÌýsee Green Tree Coffee soar toÌýnew international heights.
Market Size andÌýDevelopment
Coffee isÌýinternational, consumed inÌýone form orÌýanother almost everywhere that humans live. With this fact
Developing theÌýbrand isÌýnot without its challenges. There are some deÌýfacto names inÌýtheÌýcoffee business that occupy more than their share ofÌýtheÌýspotlight, soÌýtheÌýdifficulty becomes one ofÌýraising Green Tree’s profile inÌýsuch aÌýway that theÌýcasual coffee drinker becomes aware ofÌýit. The company believes that theÌýbest way toÌýdoÌýthis isÌýtoÌýbegin leveraging attention inÌýtheÌýcoffee enthusiast world first, where attention will dribble downward andÌýinto theÌýmainstream over time.
Rather than see people leave theÌýhouse toÌýgoÌýtoÌýaÌýfancy coffee shop inÌýorder toÌýenjoy anÌýexquisite caffeine infusion, Green Tree Coffee knows that people would prefer toÌýstay home andÌýhave theÌý
Competition
Red Fern Coffee
Blue Bottle Coffee
Orange Lightning Coffee
Brand Differentiation andÌýValue Proposition
AsÌýdiscussed above, coffee isÌýaÌýubiquitous, worldwide phenomenon. None ofÌýtheÌýcompetition incorporates theÌýentire world into their businesses, andÌýasÌýsuch, they limit themselves. Simultaneously, none ofÌýthem are especially known forÌýtheir fair trade business operations orÌýcommitment toÌýsustainability. AsÌýGreen Tree works with coffee growers onÌýevery continent where people live, making their
Target Market
Our customers are generally social
Age
Coffee enthusiasts
Social
Some interest inÌýsustainability andÌýtheÌýenvironment
Location
Marketing Plan
Social media
Paid search
SEO
PR
Daily Operations
AsÌýdiscussed, Green Tree Coffee operates entirely asÌýanÌý
Orders are packed into
Restock deliveries are inventoried atÌýtheÌýend ofÌýeach business day forÌýtheÌýsake ofÌýselling them theÌývery next day.
Financial Plan
Year 1 | Year 2 | Year 3 | |
Sales | $35519 | $160000 | $350000 |
Direct Cost ofÌýSales | $5070 | $22857 | $40000 |
Other Production Expenses | $7370 | $33226 | $50000 |
Total Cost ofÌýSales | $12440 | $56083 | $90000 |
Gross Margin | $23079 | $103916 | $260000 |
Gross Margin % | 64.9% | 64.9% | 74% |
Expenses | |||
Payroll | $0 | $50000 | $75000 |
Sales andÌýMarketing andÌýOther Expenses | $1000 | $5000 | $7500 |
Depreciation | $500 | $500 | $500 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $1500 | $1500 | $1500 |
Insurance | $2000 | $2000 | $2000 |
Rent | $12000 | $25000 | $25000 |
Payroll Taxes | $0 | $1000 | $2000 |
Other | |||
Total Operating Expenses | $15500 | $29500 | $30500 |
Profit Before Interest andÌýTaxes | $7579 | $74416 | $229500 |
EBITDA | $9,579 | $77316 | $233500 |
Interest Expense | $900 | $1600 | $1600 |
Taxes Incurred | $1100 | $1300 | $2400 |
Net Profit | $20019 | $27034 | $63343 |
Net Profit/Sales | 56.3% | 16.8% | 18.09% |
***
IÌýhope, you’ll now have aÌýthorough framework toÌýcreate aÌýbusiness plan ofÌýyour own. And remember: ifÌýtheÌýplan doesn’t work, change theÌýplanÌý— not your goal toÌýstart aÌýbusiness!
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