Do you have a business plan?
This essential document is not a
They drive interest in your business while explaining how all its moving parts come together. They are concise and impactful while preserving professionality and straightforwardness. If you don’t have one yet, now is the time.
Covering the Cover Letter
Your business plan opens with a letter to whoever is reading it. If you have ever created a resume, you should have a good idea of what a cover letter is. In many ways, the purpose is identical here. You’re stating your intent and what you plan on bringing to the table. The goal here will be to break down a detailed process to woo investors, business partners, or even initial employees. Most importantly, it has to make sense. If you come off as a crazy person, no one is going to do business with you and you’ll be a cautionary tale before you know it.
For reference, here is what you will want to make sure you have in that cover letter:
1. Address of recipient
You’ll be handing this in to specific parties, so make sure this is set for maximum impact.
Timestamp your stuff. Let people know how current the information is that your business plan contains.
3. Your address
Keep those channels of communication open. Let people know where you are. This is incredibly important.
Dear [name] will personalize the cover letter way more than you probably think it will. Make sure your intended recipient feels like you took the time to make this about them.
5. The body
This is where you are going to highlight exactly what is going on with your business. It might feel like blatantly obvious information, but stating it here will eliminate the potential for incorrect assumptions. Explain that you are submitting your business plan in a sentence or two, then add what the reader can expect going forward in your plan.
Express an earnest eagerness to hear back from the reader. Make sure that this isn’t only personalized, but that your most reliable, accurate contact information is listed here. This may be the most important part of the whole letter.
Thank the reader for taking the time to read even your cover letter. Time is money, and someone stopped what they are doing in order to read your plan. It shows a level of professionalism that will impress anyone that picks up your cover letter.
8. Sign off
This is your final shot at making an impact. Make sure it is memorable without coming off as corny. If you can tie your product in here in some way, you may create a great association.
Setting Up The Title Page
The next item on the docket is to create a great title page. This is an opportunity to set a positive first impression for your business itself. Make sure your title page encompasses the professionalism of your business. The goal here is to prevent it from looking like it was thrown together by a high school design student.
Make sure you have these important parts:
Don’t have one? Get one.
2. Business name
Who are they working with?
3. Founder or proprietor’s name (if it applies)
4. The actual words: business plan.
Remember, make no assumptions.
5. An image of your product, if it applies here.
Clip art is not allowed.
This is your timestamp.
After this, you need to create a table of contents, which is going to be a lifesaver for anyone that is picking up this business plan in search of specific information. The table of contents will identify exact locations for information that the reader wants to pinpoint, so that they can find their specific info. Some people may read the whole thing cover to cover. but if there’s someone looking to find something like the business outline, this is where you show them that you have their needs covered. Make sure your sections are separated and numbered, or this is all for nothing.
Detailing Your Business
Now, you need to have an executive summary. No, this isn’t about who is running the business! This is a quick and precise snapshot of your business plan as a whole. You want to fit in as much information as you can without bloating this piece.
You are clearly explaining the concept behind your business, your goals (both short and
Once you’ve established the executive summary, it’s time to create the company section. This part is
Outlining Your Business’s Future
You have to:
Phase I (the next 6 months)
e-commercestore traffic by driving brand-drivenshoppers through social media campaigns.
- Partner with 3 local businesses to create a
store-to-sitepromotion that rewards customers for shopping at both locations.
- Increase social media footprint on Facebook, Twitter, Pinterest and Instagram by 25 percent.
- Run a targeted promotion in a local newspaper to raise local awareness of online storefront while testing out 2 profitable promotions.
Identify the Competition
Now that you’ve identified what you expect to do here, you need to compile a who’s who list of your competitors. Listing out your major competition and detailing their strengths and weaknesses will show you exactly what you need to do to find success, as well as what you need to avoid in order to not become another face in the crowd. That said, don’t be afraid to copy good ideas while make them your own.
Identify they benefit from what they do well, or the drawbacks of certain things that they do poorly. Once you have the ball rolling, identify what kinds of threats do they pose to you. How will they react to the threat that you will be creating to them, and how are you prepared for this?
Then it’s time to write the marketing plan. To do this successfully, you have to identify your customers and any useful data that will make reaching them easier. Info like age, location, employment, ethnicity, interests, and their industries of interest will help set the backdrop here.
You need to explain what the plan is for advertising to them as well. As you are in
After you’ve explained how your customers will know your name and product, you will want to be able to show how you will operate the business going forward by using key bullet points.
Suppliers — If you are selling a physical product, where are you getting it from, or how are you getting the materials to create it?
Facilities — Where are you keeping your inventory, and how do you have access to it?
Personnel — Who will be working alongside you? How many people do you need and what will they be doing?
Equipment — What sort of tools or tech will improve your storefront? Are you hosting remotely or
Shipping and Fulfillment — Create an outline of how you are going to be able to take orders and make sure that purchases are finding their way to the customers. Are you utilizing any third party services here or will you have partners to handle this?
Inventory — How much product will you be keeping on hand overall? If you utilize
Customer Support — How are you going to support requests and handle customers’ needs beyond simply supplying your product and taking the customer’s money?
The final piece of the business plan puzzle is the Financial Plan. We are going to speak about it in detail in a post to come. Get ready to learn about terms like the Pro Forma Income Statement, the Pro Forma Cash Flow, and the Projected Balance Sheet. But you certainly have enough information here to get started for now.
So go out there and make us proud!
Business Plan Example
Below is a sample of a coffee shop business plan for a fictional
Importantly, all of the facts and figures it contains are invented, but its formatting and flow are valid. Use it as an example to inspire you as you create your own business plan!
Begin business plan:
Based in Asheville, North Carolina, Green Tree Coffee is an online retailer of
The business currently operates entirely online, making its products available everywhere at once. Business projections have Green Tree Coffee on track to generate $35,000 of revenue in its first year, and as the business grows, it will be doing $$350,000 of business annually within three years. Upon meeting these projections, there will be a physical Green Tree Coffee storefront open to residents and visitors to Asheville who want to experience the sights and smells of this coffee in person.
The business retains a focus on environmentalism and sustainability. Customers in Asheville are invited to bring their used coffee grounds to a designated
Research shows that coffee is more popular than it’s ever been. The average American drinks nine cups of coffee a week. The average European drinks 11. The average South American? 13 cups of coffee each week. This is why it remains important for Green Tree Coffee to focus on serving the world at large.
The business primarily competes with Red Fern Coffee, a small coffee distributor that works exclusively with American coffee farms. Green Tree’s value proposition and key differentiation comes from its worldwide focus and attention to sustainability in its operations.
At the outset, marketing will be done through social media. In the course of her travels, founder and CEO McBride has amassed a large following on Twitter and Instagram. She will direct attention to the Green Tree Coffee website, make regular suggestions on coffee to purchase, and share stylish photographs pertaining to the
Product will be sourced from the coffee farms that McBride has personal experience working with. She has access to a trust and understanding with these niche farms that larger businesses will simply never have; she is a former employee. Product will be shipped in bulk via conventional delivery means to a warehouse space, where it is then repackaged with Green Tree branding, including a short text on every bag of coffee beans about the farm and country from which the coffee comes.
Green Tree is not presently seeking funding, but this may change in the future. Right now the company is entirely bootstrapped off of McBride’s savings, and she is able to purchase product at a great discount due to her personal connections in the coffee industry around the world.
After several years of working as an investment banker on Wall Street, securities trader Lawson McBride was ready for drastic change in every way. She sold most of her possessions and lived out of a backpack for five years while traveling the world in pursuit of the best coffee she could find. After all, coffee was the only thing she consistently enjoyed in her daily life. She wanted to bring that same joy to others, but she knew that she had to learn everything about it before she could do so. After working a series of manual labor jobs on coffee farms around the world, she leveraged her industry connections to buy the first batch of Green Tree Coffee inventory, and is now set on glamorizing coffee like never before.
Green Tree Coffee’s vision is simple: the world’s coffee, brought to your doorstep. Just as Amazon can frictionlessly deliver daily household necessities like toilet paper and cat litter, Green Tree seeks to bring rare or
Current Company Status
Green Tree Coffee currently operates as an LLC, but will soon seek to incorporate as its business grows. The company is privately held entirely by McBride, though she makes no secret of the fact that the business depends on the hard work of coffee farmers around the world. As a reseller itself, the business sells directly to consumers through its online
Green Tree Coffee Objectives
Green Tree is intent on swaying the world away from the Starbucks lifestyle. Business is primarily domestic, within the United States. Right now, the focus is on growing business to be more international. Below is a business plan sample showing what is necessary over the time to come in order to meet such a goal.
Phase I (next six months)
- whether domestic or international, increase total sales by 15% through strong social media push
- grow social media following on Twitter and Instagram by 25%
- identify and work with three key brand ambassadors who can be
high-profilespokespersons for the Green Tree brand in the coffee world.
Phase II (next 12 months)
- communicate with and travel to five new coffee farms to investigate reselling their product to the Green Tree audience
coffee-tastingevents in these new locales with the interest of simultaneously drumming up new international interest in the Green Tree brand
- begin investigating spaces to rent or buy in the Asheville area for the purposes of putting together a physical storefront
- begin outlining an employee handbook for when the time is right to begin hiring more help.
Right now, Green Tree is a
As the company grows, McBride will begin hiring hardworking coffee enthusiasts to see Green Tree Coffee soar to new international heights.
Market Size and Development
Coffee is international, consumed in one form or another almost everywhere that humans live. With this fact
Developing the brand is not without its challenges. There are some de facto names in the coffee business that occupy more than their share of the spotlight, so the difficulty becomes one of raising Green Tree’s profile in such a way that the casual coffee drinker becomes aware of it. The company believes that the best way to do this is to begin leveraging attention in the coffee enthusiast world first, where attention will dribble downward and into the mainstream over time.
Rather than see people leave the house to go to a fancy coffee shop in order to enjoy an exquisite caffeine infusion, Green Tree Coffee knows that people would prefer to stay home and have the
Red Fern Coffee
Blue Bottle Coffee
Orange Lightning Coffee
Brand Differentiation and Value Proposition
As discussed above, coffee is a ubiquitous, worldwide phenomenon. None of the competition incorporates the entire world into their businesses, and as such, they limit themselves. Simultaneously, none of them are especially known for their fair trade business operations or commitment to sustainability. As Green Tree works with coffee growers on every continent where people live, making their
Our customers are generally social
Some interest in sustainability and the environment
As discussed, Green Tree Coffee operates entirely as an
Orders are packed into
Restock deliveries are inventoried at the end of each business day for the sake of selling them the very next day.
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$5070||$22857||$40000|
|Other Production Expenses||$7370||$33226||$50000|
|Total Cost of Sales||$12440||$56083||$90000|
|Gross Margin %||64.9%||64.9%||74%|
|Sales and Marketing and Other Expenses||$1000||$5000||$7500|
|Total Operating Expenses||$15500||$29500||$30500|
|Profit Before Interest and Taxes||$7579||$74416||$229500|
I hope, you’ll now have a thorough framework to create a business plan of your own. And remember: if the plan doesn’t work, change the plan — not your goal to start a business!