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7
Business Planning
Why Plan?
A business plan helps you formalize the thinking and
planning process. Developing and recording a plan
helps you systematically think through the steps
involved in your business development. By
completing a business plan you will better
understand the markets, costs and competitive
factors that will influence the future of your new
business. A well thought out plan gives you
increased confidence and prepares you to obtain
necessary financing and resources. Think of a
business plan as a working document, one that
changes, expands and shifts with the times.
The business plan that you develop as a working tool
does not need to be a formal document, but there are
times when a formal business plan is a requirement.
If you need a loan from a financial institution, then
you will likely be asked for a business plan. If you
want processing assistance from the Alberta
Agriculture and Rural Development, Food
Processing Development Centre in Leduc, a business
plan is required. Depending on who is going to read
the plan, you may need to emphasize different
aspects.
Gathering Information
Business plans can take many forms. What follows
is a series of questions. You will probably know the
answers to many of the questions from your ongoing
work. If you created files as suggested in the
Introduction to this Guide
, you will have the answers
to many of these questions. Once you have answered
the questions, you will be in a good position to write
your business plan.
1. Describe your product or service
• Describe the benefits of the product or describe
what your service will do for people.
• What makes your product or service different?
• How does it help a consumer?
• Why would someone buy your product?
• Is it easy to use?
• What is the shelf life of your product?
• How will you package your product?
2. Do a market analysis
• Who are your customers by age, income, sex,
preferences, etc.
• Where are they located geographically?
• Describe your industry trends (past, current,
future predictions).
• How do you know these people want your
product?
• What market share do you expect to get, and
why?
• What are potential problems in meeting this goal
and how will you deal with them?
• Who are your competitors now and in five years?
How does your product compare with theirs and
how can you best compete with their products?
3. Marketing strategy
• How will you set your price, and how does your
price relate to competitors prices?
• How will you get the word out about your
company and your product?
• How will you get your product to them (by mail,
distributor, broker, direct delivery)? What are the
costs of using this method?
• What service and warranty policies will you
have?
4. Describe yourself and your management team
• List your personal data: age, where you live and
have lived, special abilities and interests and your
reasons for starting the business.
• What is your business background and
experience? Do you have directly related
experience?