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The Business Plan
Business Plan Research
What is Business Plan Research?
It is the systematic gathering, recording and analyzing of information about problems and opportunities relating to the operations of your business.
Why do I need to conduct Business Plan Research? (Market Research)
Business plan research helps you make informed decisions when pursuing a business venture. It provides a foundation of important information to help you determine a vision, and set goals and strategies to guide your decisions in the planning, organizing and executing your business venture. If your research is conducted thoroughly, a sound business plan can also be used when seeking out external financing from banks, the government and private investors.
Where do I conduct my research?
Below are a number of sources to get you started.
A. Primary Research
þ Questionnaire/Surveys (telephone, mail, email, personal
þ Focus Groups
þ Interviews
þ Observation
þ Product or Service Sampling
B. Secondary Research
þ Associations (Associations Canada)
þ Networking (BNI, Home Based Business Association, OCRI)
þ Newspapers, Magazines, Periodicals (Micromedia Voyageur Database)
þ The Internet – Industry Canada – strategis.gc.ca
þ Statistics Canada – www.statcan.ca
þ Canada Year Book
þ Directories (Scott’s, Frasers, Ontario Business Directory)
þ Economic Development Departments (Blue pages, Ottawa Economic Development)
þ Other…
Business Plan Outline
There are many different Business Plan formats. The layout may vary depending on the type of business, the purpose of the plan and the readership. The following format can be amended to meet the needs of your business. This booklet will take you through the various sections outlined below and the type of information required to complete each section.
1. Table of Contents
1. Executive Summary
2. Company Profile
3. The Marketing Plan
þ Industry Overview and Trend Analysis
þ Product or Service
þ Target Market
þ Competitive Analysis
þ Marketing Mix
§ Product (done above)
§ Price
§ Promotion
§ Place/Distribution
4. The Operational Plan
þ Suppliers
þ Manufacturers
þ Operating Requirements
þ Human Resources
5. The Financial Plan
þ Start Up Costs
þ Cash Flow Statement
þ Income Statement
þ Balance Sheet
6. Appendix
Table of Contents
Your table of contents must be neat and clear. Your table of contents format will vary depending on the quantity and type of information you provide in your plan, but it should be set up in a format similar to the one outlined below. The table of contents should be centered on the page both horizontally and vertically.
Table of Contents
1. Executive Summary ………………………………………………………………………. 2
2. Company Profile ………………………………………………………………………….. 3
3. Marketing Plan
3.1 Industry Overview/Trends …………………………………………………………. 4
3.2 Product or Service ………………………………………………………………….. 8
3.3 Target Market ………………………………………………………………………. 11
3.4 Competitive Analysis ……………………………………………………………….. 13
3.5 Price ………………………………………………………………………………….. 15
3.6 Promotion ……………………………………………………………………………. 16
3.7 Place/Distribution …………………………………………………………………… 18
4. Operational Plan
4.1 Suppliers …………………………………………………………………………….. 20
4.2 Manufacturing Plan …………………………………………………………………. 23
4.3 Operating Requirements ………………………………………………………….. 25
4.4 Human Resources …………………………………………………………………. 27
5. Financial Plan
5.1 Start Up Costs ……………………………………………………………………… 29
5.2 Cash flow Statement ………………………………………………………………. 30
5.3 Income Statement ………………………………………………………………….. 33
5.4 Balance Sheet ……………………………………………………………………… 36
6. Appendix
A-1 Supplier List ………………………………………………………………………… 39
A-2 xxxxxx ……………………………………………………………………………… 40
Executive Summary
What is It?
§ The executive summary is a concise summary of the business opportunity; however it covers all the
important components of the plan.
§ As a future-oriented, two-page document, it demonstrates your knowledge of the business opportunity
and proves that any investment in the venture will yield a good return.
Why is this information important?
§ It is important to develop a concise description of your business to capture the interest and support of
the reader. The readers may include partners, potential investors, lenders or regulatory agencies.
§ An investor may read the executive summary to decide if s/he should read the remainder of the plan.
It must create excitement to entice the reader to continue reading.
Where do I conduct my research?
§ Your summary is supported by documentation from the main body of your business plan.
§ The executive summary should not introduce information that is not reinforced in other sections of the
plan.
Executive Summary
What do I include?
Provide and introduction to your business opportunity
MARKETING HIGHLIGHTS
Product/Service distinctive features
Target Market Summary
Competitive Analysis
Key Marketing Strategies
OPERATIONAL HIGHLIGHTS
Critical legal issues related to your business
Supplier Summary
Management Team Overview – Critical roles and Pertinent Skills
FINANCIAL HIGHLIGHTS
Summary of financial requirements and projections
Equity investment of owners
Company Profile
What is it?
§ It is a snapshot of your business and who is involved in it.
Company Profile – Sample
Form of Business : Sole Proprietorship registered in the Province of Ontario, May 2008
Owner(s) : Your name
Name of Business : Best Business Ever
Business Start Date : July 2009
Business Operation : Full time venture
Monday to Friday
7am to 6 pm
Business Description : Supplier of high quality childcare products
Location : 1234 Any Street
Anytown, Ontario
X1X 2X2
Tel: (613) 555-5555
Fax: (613) 555-5554
E-mail: name@......
Website: Bestbusinessever.com
Advisors : Mr. A Countant
Chartered Acountant
2345 Icancount Street
Anytown, Ontario
Mr. C Crime
Lawyer
1245 Guilt Street
Anytown, Ontario
Industry Overview and Trend Analysis
What is it?
§ This is an analysis of the industry and economy in which you are operating. The overview provides an
understanding of the current trends and industry characteristics.
§ A trend is a definite, predictable direction or sequence of events lasting more than 3 years.
Why is this information important?
§ Industry trends help to identify opportunities to create a product of service that will satisfy the needs of
a particular customer base. There should be a natural flow from the industry trends to your product or
service.
§ Opportunities arise as industries develop, expand or contract. For instance, changing government
rules and regulations can often create new opportunities.
§ Trends can provide you with strategic information that can help you be competitive and provide
direction fro growth in new products and company strategy.
§ Trends can assist you in determining your longevity in the market. Most products follow a product or
industry life cycle curve. Knowing where your product or industry fits on this curve will help you in
your marketing and promotional strategies.
§ Trends can alert you to possible threats to your business venture so as to prepare you to be proactive
or re-evaluate the feasibility/viability of your venture.
Where do I conduct my research?
Secondary research information source examples may include:
n Statistics Canada (www.statcan.ca)
n Trade magazines, Canadian Almanac and Directory
n Business magazines, print version and internet
n Micromedia Voyageur database
n Economic indicators – inflation, unemployment levels, interest rates, etc.
n Industry Canada – (strategis.gc.ca)
Industry Analysis
What do I include?
Overall business or consumer trends and business opportunities as a result of:
Economic Changes
Political/Legal Changes/Events
Social Changes
Demographic Changes
Technological Changes
Environmental Changes
Note: Competition Changes will be explored in the Marketing Plan.
Analysing the Environment and its effect on the Stakeholders of Your Business
Environmental Factors / What? / Who? Stakeholders? / How are they Impacted?Economic
Political/Legal
Social/Cultural
Demographic
Technological
Environmental
Industry Overview and Trend Analysis
Provide and investigation of past, present and future trends in your respective industry.
Identify Key Success Factors in Your Industry
Example #1: In the media entertainment industry, keeping up with and striving to improve high tech animation and multi-media special effects capabilities is an absolute must to remain competitive, as well as having innovative and creative writers..etc.
Example #2: In the cosmetic industry, non toxic and health consciousness is a must as increasingly people are looking for healthier and more organic choices even for skin care; a background knowledge in chemistry and health and nutrition may be also very important.
Barriers to Entry, Size of Industry
What are the major challenges for someone wanting to compete in your particular industry? For example, if you will be competing against large, successful and well known corporations, what will you need to compete that will present a challenge to a new company? How many companies are competing in this industry and compare that with the size of the market (customer base). What challenges does this information pose to your success?
Product or Service
In many cases, business are not just providing a product(s) or a service. Often a business is providing
both. Your product or service may be redefined or refined at different stages of the business planning process. The first definition of your product/service offering won’t be your last.
What is it?
n This section describes the features and benefits of the product or service that you are selling. How
will your product be used?
Why is this information important?
n Your business is built around the product or service that you are offering to the market. You should be
able to completely, yet concisely, describe what you are selling and what makes it distinct from the
competition.
n From your industry analysis you should have determined needs or gaps in the industry. The features
and benefits of your product or service should fill some of these identified needs or gaps.
n By focusing on the Unique Selling Proposition (USP) of your product or service, you should be able to
clearly differentiate yourself from your competition and use this differentiation to secure a competitive
advantage.
Where do I conduct my research?
n Environmental Analysis results
n Competition Analysis
n Suppliers (Ontario Business Directory, Scott’s Directory)
n Consumer Packaging and Labelling Act
Product or Service
What do I include?
What are your products’/service/s unique and value added features? (features that add more value to your product vs. the competition)
Outline the benefits of these features to the customer and the business.
How is your product/service positioned against the competition? (Better value for money? Better quality, though more expensive? Lesser quality, though cheaper? Better quality and cheaper? More features, more expensive….etc)
Comment on how this type of product/service has done in the market in the past? (i.e. general target market? size of market? problems with the product? praises of the product? other…)
Product or Service
How will you package your product? What material will be used? Consider weight, safety, ease of use, environmental issues, durability, etc.
What labeling will you provide on your packaging? Consider advertising, information required by law, etc.
What will the name of your company and or product be? Consider company and brand image. Product name should tell the buyer s/he is purchasing, be easy to remember, easy to pronounce, and easy to recognize.
What warranties and or additional services will you provide? (What promises will you make about the performance of your product/service? What type of service will you provide before, during and after the sale of your product/service).
Target Market
What is it?
n A group of people who have similar wants and needs and a willingness to pay for the business product and/or service.
n A target market could be other businesses or consumers.
n A target market needs to be large enough to warrant the time and effort required to provide a specific product and/or service
n You may have more than one target market. For example, it is very common to have a primary target market and various secondary markets.
Why is this information important?
n Understanding your target market profile helps in making critical and focused marketing mix decisions such as pricing, where to sell, and where and how to promote your product.
n Understanding the size of your target market will help you forecast your sales for your cash flow projections.
n You need to determine if there are enough people who want to buy your product to assess if you will be profitable.
Where do I conduct my research?
n Statistics Canada (www.statcan.ca)
n Industry Canada (strategis.gc.ca)
n Internet
n Survey, Focus Groups, Interviews, Competitor Analysis
Target Market
What do I include?
For consumer demographics, consider the following:
1. Demographic Information
þ Age
þ Family life cycle/Marital status
þ Number of children
þ Religion
þ Language
2. Socioeconomic (extension of demographics)
þ Education
þ Occupation
þ Income range
þ Culture
þ Social Class
3. Psychographics
þ Lifestyle characteristics
þ Recreational interests
þ Reading habits and interests
þ What radio stations do they listen to?
þ Personality attributes
þ What need does your product fill?
þ Who influences their purchasing decision?
4. Geographic
þ People who live in regions of the country that would be defined by specific climate, or political or population boundaries.
5. Behaviour Patterns
When, where, and how often do consumers purchase
For business demographics, consider the following:
1. Number of businesses
2. Location of businesses
3. Frequency of purchases
4. Size of businesses
5. Who makes the purchasing decision?
6. What influences the purchasing decision?
7. What need does your product fill?
Competitive Analsyis
What is it?
n This is a thorough analysis of both direct and indirect competitors.
n Your analysis must identify the strengths and weaknesses of the competitors.
n Your indirect competitors are not providing the same product or service but are competing for the same consumer’s dollars.
Why is it important?
§ Information such as how your competitors price, market and sell their product can help you differentiate your business.
§ A good understanding of the competitive environment may identify areas that are currently not being targeted.
§ Understanding why your strongest competitors have been successful will provide you with important information about the market’s likes and dislikes.
Where do I conduct my research?