A business plan is defined as as a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient to reach its projected goals. Business plans can vary quite a bit since it is customized to fit a particular business.
Business plans are important because they are used as a decision making tool by prospective lenders, investors and company heads on whether to pursue certain goals or provide financing. They make your business understandable to those who don’t know much about it. It brings clarity to business goals and gives credibility to them. It outlines your business goals while supporting it with factual data so that it is clear and comprehensible.
A sound business plan is a must for any business including small businesses. It is not a guarantee that you will be successful but it can reduce the odds of failure due to poor planning or understanding of your business. It is crucial to write a business plan if you are planning to secure outside financing for your business. Banks, lenders and investors will require one when reviewing your eligibility for financing.
Unfortunately, most people have no idea how to write a business plan, or indeed, a marketing plan or a strategic plan, which can also be helpful for starting a business. The key to a successful business plan, however, is always in the focus of the idea. If you have a focused idea, you can easily put down on paper what makes your idea a compelling business venture.
The goal of a business plan is to explain your business idea to outsiders, most often for the secondary purpose of securing financial backing. They should, if written properly, argue the case for your business, explaining why exactly it is a good business idea and a worthwhile investment for third parties.
The basic components of the business plan are:
• The executive summary
• The company summary
• Products and services information
• Market analysis
• Strategic planning
• Management summary
• Financial information
The executive summary provides a detailed introduction to your business plan. When investors read this, they should get the big picture. Surprisingly, this opening section of your business plan should be written last. This ensures that you summarize all of the main points of your business plan – and really nail them – so they grab attention and convey the conviction you have in your ideas.
The company summary is a broad overview of how you plan to build your company up from the ground up. It should include a brief history of your company, explaining what type of legal entity the company will form, and who will own the company.
You should also summarize the start-up costs of the company and give some indication of where the initial funding will come from. With most cleaning businesses, you don’t have to worry too much about the start-up costs, but you may want to partner with someone or obtain a small business loan to take care of the administrative elements (licensing and incorporation fees, for example), and to purchase some high-quality supplies to get you off the ground.
When you’re starting a cleaning business, the focus of your business plan should be what services you are going to provide, how you going to provide these cleaning services.
The cornerstone of any business is the product or service that it provides and cleaning businesses offer no exception to this. Ideally, you will have some element that makes you unique. This is what is referred to as a “niche” market. It’s what will you’re your company unique whether it’s using particular cleaning product or cleaning in a particular way, it doesn’t matter. What does matter is what is going to set you apart from your competition.
This third section of your business plan should describe the services you intend to sell as part of your business, explaining precisely why customers are going to buy from you. You will need to address the reasons potential customers will be compelled to buy your services.
Make sure you can explain the benefits that the service you’re offering. You also need to establish how much it is going to cost you to provide the cleaning services and what you’re going to charge your customers to make your money back and make a profit. You will need to know your numbers. Be sure you track your business finances from the start so that you may adjust your business plan as your business develops. Gathering financial information about your business will be an ongoing responsibility that will help you see your business through the eyes of factual numbers and the numbers do not lie.
Your customer demographic or market will drive what cleaning services your business plans to offer. To do this effectively, you need to research your market’s demographics, growth trends, and predicted growth potential. You also need to look at other information about future markets. You should also furnish your plan with a chart detailing your market forecasting.
The fourth section of your business plan should summarize your plan for implementing the strategies you’re going to use to target your customer demographic or market.
You should explain why the services you offer are going to address the particular needs of the market you’ve identified. Explain how you’re going to put your cleaning business out there on the market. You should also try to forecast your sales and calculate the basic costs you are going to incur for each sale.
You should try to combine all of this information and set yourself a series of milestones with dates, to help create a plan for the day to day management of your business. And dates are important. Set up your budget and, even if it’s just you running the business, define the specific responsibilities you have and how you will meet them.
If there’s just you and if you’re not planning on showing your business plan to anyone, you can certainly dodge the management section of your business plan, the one that identifies your management section. If you want a confidence boaster, however, you can feature the management section and detail what aspects of your professional experience – and the experiences of your team – will help you, Write up an overview of your business team, including the people you plan to have working for you.
The last section of your business plan should offer your financial projections. As the title suggests, you should describe the financial strategy of your company. The more detail you can apply to this section, the more organized you are going to be as you start your business for real.
The fewer unknowns you have in business, the better, so you should definitely have an overview of your financial strategy and evidence to support projected growth patterns you’re relying upon.
You should also include a break-even analysis in this section, which will help you pinpoint exactly when you’re going to start making a profit, how long it’s going to take. It’s also important to detail the fixed and variable costs of your business and make some representation of your projected profit and loss, cash flow, and overall cash levels. A balance sheet can be very helpful to get an impression of what your business finances are going to look like month-to-month for the first few years.
Once you have a business plan in place, you should think about putting together a marketing plan. A comprehensive marketing plan goes a long way to helping you promote your business effectively, and it takes this promotional aspect one step further than the business plan.
The basic components of a marketing plan focus on your customer. Your marketing plan should start out by defining your product or service. It should explain the features and benefits in detail from the perspective of your customer. It should also show your product or service differs from those of your competitors. Try to explain why your offering is more useful to the market and keep in mind that the more succinctly you describe your product, the better you’ll communicate with your target customer.
Your marketing plan should also describe your target customer. Every business has their ideal customer and the most successful businesses have an exact profile of their target customer printed in their mind, generally thanks to an effective marketing plan. To be equally effective in your targeting, you should describe your customers in terms of demographics, age, sex, family composition, earnings, geographic location, and lifestyle.
When you have a clear idea of who your customers are, you should create a precise communication strategy. Focus upon how you’re going to communicate with your target customers. At the end of the day, you can know everything about your target customer right down to the type of clothes they wear. It won’t do you much good, though, unless they know you as well.
Communication covers everything from the design of your company logo to your extended advertising, public relations, and promotional campaigns. You need to know what your target customers read and what they listen to. Nowadays, you really need to know which websites they go to, where they shop.
When you have a marketing plan in place, you might also consider putting together a strategic plan. Although they look similar on the surface, business plans and strategic plans are very distinct documents. The focus of the strategic plan is the mission statement, for instance, and its purpose is to explain and establish the goals and business values of your company.
A strategic plan should include a mission statement, a list of values, a list of goals, and a strategic plan for step-by-step implementation of your company’s core values and goals. A good strategic plan will give you the means to implement your values and goals into your daily business practice.
Having a business plan, a marketing plan, and a strategic plan, and doing the proper amount of research will help you set realistic goals for your business and to gain deeper insight into it. A man without a plan is like a ship without a course. It will be at the mercy of the winds with no clear destination. Without a planned course, the ship will float aimlessly until it either sinks or becomes shipwrecked. Decide to start your journey the right way. Take the time and make the effort to define your business, financial and personal goals and then work to make each one come to pass. The only way you can fail, is if you quit.