Greener Business Bureau

Archive for the ‘Business Section’ Category

Products and /or Services

In this section of your business plan, you want to describe what products and services your company will offer, and include information on specific product lines and associated research.

The products/services section of your business plan is where you want to describe what it is you are selling, benefits to the customers, the demand for your products or services, and especially sell the distinctiveness of your product.

Be sure to relate any barriers your product may face during the production, transport, or sale of the product. These may be barriers such as government regulations, competing products, rare manufacturing materials, or high development costs.

New Products/Services

If the products are original, explain the need for them, and include all legal aspects such as patents or copyrights and include photos or other visual aids.

If you are still in the process of developing your product, provide your strategy for production, and a projected timeline.

Include any patents, copyrights, or trademarks currently owned or applied for. Also include any confidential and non-disclosure protection the business has secured.

Products/Services Already Available

If it is an established market, focus on the advantages your business has over competitors. This is the portion of your business plan where you want to highlight your competitive advantage. What makes your product or service unique? Be specific when illustrating your advantages.

Be sure to show that you will be able to price your products/services competitively, and still maintain profit.

The Market

In order to have a successful business, you need to have a thorough knowledge of the business’s target market. It is therefore a good idea to include a section in your business plan specifically focused on the market you will be serving. Included in this section should be all aspects of your market research data, including customer purchasing habits and buying cycles.

Be sure to include a detailed description of your target market, and why you chose it.

Provide a thorough explanation of the demand for your product or service in the market, and include supporting documentation to demonstrate those needs.

Illustrate your projected market share, as well as how you plan to attract, hold, and increase market share.

Remember that your markets may grow with time. Provide information on the growth potential of these markets, and how you will satisfy that growth. Are the markets large enough to allow for possible expansion in the future? How will you price your products/services to remain competitive in a growing market?

A competitive analysis strives to categorize your competitors and assess their relevant strengths and weaknesses. By understanding the events of your competitors, your company will have a improved perspective of what products and/or services you ought to provide to your customer, how to market successfully, and lastly how to strategically position your business.

4 CRITICAL STEPS TO A COMPETITIVE ANALYSIS

Step 1 | Categorize your competition
Step 2 | Investigate your strengths & weaknesses
Step 3 | Explore and examine your opportunities and threats
Step 4 | Assess your position amongst competitors

The outcome of your company’s comp. analysis institutes the competence required to do well in your business, while defining your viable advantage. To gain from your comp. analysis and market research, capture scores of weaknesses about your competitors and transform them into impending strengths for your company. Slim your inventory of competitors to just the matter that will offer your company the aggressive edge. Items to consider when populating your Competitor catalog:

* Fits a unambiguous market
* Intended to resolve a hitch in your company or take care of a explicit need
* More importantly, ROI-effective, rational and practical

Upon doing a comprehensive job in carrying out your competitive analysis, your company will produce a lot of data, which while vital to investors can become rather cumbersome for you. A competitive matrix presents hordes of information in an actionable and rich format.

AXIS 1 | list the significant assessment criterion characteristically used by potential clients to weigh against the rival offerings.

AXIS 2 | list main competitors. Rank the competitors aligned with the criterion.

*Be sure to make the matrix the essential section to your competitive analysis, while providing relevant content in paragraph form.

Lastly, subsequent to completion of the competitive analysis describe how your company speaks to a specific market.

Look for more articles from me regarding business plans, market research or funding your venture, current company or start-up. Also be sure to first talk to your small business development center in your community, if you are new to the business plan process – This is funded101 signing out.

If you want to start a business, but don’t know where to start, then the place to start is with Start Your Own Business: The Only Start-Up Book You’ll Ever Need by Rieva Lesonsky. The book is put out by Entrepreneur Press and is essentially a compilation of Entrepreneur Magazine’s large knowledge database regarding starting a business.

The book literally takes you through the entire business process – from determining if you really have what it takes to run a business to how to deal with failure if your business doesn’t work out, and everything in between. The best part about the book is that it covers nearly EVERYTHING in some capacity. If you need more information, it does a great job of suggesting further reading and pertinent web sites.

The book is broken down into seven sections, each with several chapters. The first section, ‘You Gotta Start Somewhere’ covers determining if you can be an entrepreneur, how to come up with an idea for your business, and whether you should launch your business part time or full time. Most people who buy the book will already have answers to these questions, but going through the exercises in the book can still be helpful.

The second section of the book is entitled ‘Building Blocks’. It covers how to name your business, choosing a business structure, creating a business plan, and how to hire a lawyer and accountant. I think that this is the most valuable section of the book. These are the things that most entrepreneurs either struggle with or ignore. The Naming Your Business chapter in particular helped me a great deal. Naming your business is not nearly as easy as you think – you need to consider all registered trademark names, registered domain names, and names that are being used but not trademarked. One of the worst things that you can do is to pick a name that is already being used by someone and face a legal battle down the road.

The third section covers financing including where and how to get money to run your business. The fourth section, ‘Setting the Stage’ is absolutely massive and covers numerous important things such as choosing a location for your business, creating a professional image, offering customers credit, hiring your first employee, and business insurance. Needless to say, all of these things are extremely important to every business owner.

The fifth section covers buying company computers, cell phones, and cars. These things probably won’t be very difficult for most business owners. The sixth section, however, covers one of the hardest thing every business owner faces – marketing. The section is nearly 100 pages about advertising, marketing, and public relations. It also briefly touches on web-marketing but those looking to seriously profit online will need to look elsewhere because the book is a little thin when it comes to e-commerce.

The final section, entitled ‘By the Books’ goes over every entrepreneurs favorite things – accounting and taxes. It gives solid advice regarding basic bookkeeping, financial statements, budgeting, and taxes. For most business owners this section and the web resources listed should be more than enough to get them started on keeping their business legal.

I can’t overemphasize how important I think it is for every business owner to have this book. It is a mini-encyclopedia (ok, so 800 pages isn’t THAT mini) for everything business related. Having this book on your shelf will save you countless hours. I read it from cover to cover when I got it and I constantly refer back to it. I have recommended it to every person I know that has talked with me about starting a business. Each and every one of them bought it, and each and every one of them came back to me raving about it.

For the amount of depth that is covered in the book, Start Your Own Business: The Only Start-Up Book You’ll Ever Need by Rieva Lesonsky is an amazingly easy read. Anyone over the age of 16 will be able to comprehend the simple nature of the book. Reading this book won’t guarantee your success as an entrepreneur, but it will help reduce the risk of starting a business by providing you with a sound foundation to build upon.

Online marketing and promotion can be a great success if proper
planning is done in advance to ensure the effectiveness of your
online marketing and promotion activities. Without planning,
online marketing and promotion can be an enormous waste of both
time and money. Business plans and marketing plans are crucial
for the effective operation and ultimate prosperity of any
business.

There are four main sections to a business plan. First is a
thorough description of the business. Next is the marketing
section which actually lines out your plan for online marketing
and promotion. The third section is the financial section where
you plan for financing your business and project your income,
expenses, assets and liabilities. The fourth section of a
business plan generally describes how the business will be
managed and may include policies and procedures in a very
detailed business plan.

The sections of a business plan may be arranged in a different
manner from what is described here, but for the most part, these
are the four main sections of a business plan. An executive
summary is often placed at the beginning of a business plan to
briefly highlight the plan’s main content. Appendices may also be
used to present supplemental information such as past financial
statements and resumes for the key personnel in the business.

Business plans serve many purposes. Often they are used (and
sometimes even required) to get bank financing for the business.
They can be used to attract partners and investors as well.
Perhaps the most important purpose of a business plan; however,
is to guide your operations and to keep your business activities
focused so you can achieve the goals set forth in your business
plan. The marketing section of the plan gives you a guide for you
online marketing and promotion activities. Defined milestones and
a budget for online marketing and promotion are crucial to
launching and operating a productive and beneficial marketing
campaign.

There is one fatal error that business owners repeatedly make
when it comes to their business and marketing plans. That is,
they put their heart and soul in to preparing a business and
marketing plan that carefully considers all aspects of the
business, clearly defines the intentions for the online marketing
and promotion of the business, and sets a practical budget for
the business. Then, unfortunately, many business owners sit their
incredibly meticulous business plan on a shelf and never refer to
it. They strike out on their own, without the benefit of the
actual plan for their business.

When this happens, it is highly likely that they will get off
track with their business and with their online marketing and
promotion. They will not be using their guide and they will spend
money frivolously, especially for online marketing and promotion,
and their goals will not be realized, their budgets won’t be
adhered to, and their income projections will not be met. This is
a tragic situation that should always be avoided.

A business and marketing plan that is actually used to guide your
day to day business activities, including your online marketing
and promotion, can actually set you apart from the competition as
well as making it easier to achieve your goals, to have a
profitable business, and to grow the business substantially.
Whether you prepare your own business and marketing plan, or hire
a professional business or marketing consultant to prepare your
plan for you, you definitely need to engage in business planning.
Without a doubt, a well planned online marketing and promotion
program will increase the odds of an online venture becoming a
flourishing and rewarding business.

Incoming search terms:

No part of the business plan is more important than the financial section. It is here that the plan can fail if the needs of funders are not taken into account. The financials should include the following key information:

Financial Summary

A simple, five year financial summary should show the expected growth in revenues and profit over the years, as well as expenses (yes, expenses do have to rise to allow for increased revenues). This type of summary can go further by showing some non-financial markers of success, such as the number of full-time employees, number of locations, number of products sold in a year, and number of clients. Readers will look to see that the growth described in this summary seems attainable from the market opportunity and size given as well as the strength of the marketing and operations plans and the management’s means to execute them.

Sources and Uses of Funds

Within the financial section there should be details on the funding requirement for the business and who the funders will be. If any funding is secured already, this is certainly information to mention. However, if all funding is still uncertain, this section should at least describe the type of funders that are being targeted. The uses of the funds should then be detailed, showing what the pre-launch startup expenses will be as well as the needs for additional working capital going forward.

Pro Forma Financial Statements

Finally, a full set of pro forma (projected) financial statements should be included in the appendices of the business plan. These financial statements must be completely consistent with the financial summary and sources and uses of funds described earlier. The statements include the income statement (sometimes called the profit and loss statement or P & L), balance sheet, and cash flow statement. Generally, more detail is given for the first three years by showing quarterly results. Additional statements should then show annual results for the first five years.

The income statement shows the revenues and expenses (grouped into appropriate categories), and the profit or loss for each period. The balance sheet shows the breakdown of assets, liabilities and owner’s equity in the business at given points of time. The cash flow statement shows the cash inflows and outflows from normal operations, investment in the business, and financing from lenders and investors. The advice of an accountant or business plan consultant familiar with drafting these statements is recommended to make sure that you get them right.

If you bought equipment for your business last year such as a computer or a printer, you can deduct those items on your business income tax return. Usually that means tackling Form 4562 and entering one of the most complicated areas of tax law, the dreaded world known as depreciation.

For do-it-yourself-ers who abhor the thought of paying someone else to do your income tax return, this article will help you prepare Form 4562 without breaking into a sweat.

Thanks to a tax rule known as Section 179, most small business owners can fully deduct the cost of equipment without going near those complex depreciation laws. But you still have to complete Form 4562, and then you have to transfer the amount of your Section 179 deduction from Form 4562 to your main business income tax form, whether that be Schedule C (sole proprietorship), Form 1065 (partnership), Form 1120 (regular corporation) or Form 1120S (S corporation). Here’s how to do that:

1. Compile a list of all equipment purchased for the business last year. This list should include the purchase date, the cost and a brief description of the item. Generally speaking, personal property such as office equipment, office furniture and tools can be deducted via Section 179 but real property cannot (buildings and building improvements).

2. Add up the cost of all the equipment that qualifies for the Section 179. If you are not sure whether a particular items qualifies, review the Form 4562 instructions or call the IRS for clarification. As long as the total cost of all Section 179 property bought in 2008 is less than $250,000, you can proceed without getting bogged down in the more complicated aspects of Section 179. If you bought more than $250,000, things get more complicated and you’ll need to get more help than this article provides.

3. Go to Form 4562 and report the total cost of all Section 179 property on Line 2. Again, assuming that the Line 2 amount is less than $250,000, you should be able to carry the Line 2 amount down to Line 8 and Line 9.

4. You must list each property item separately on Line 6. There is only space for two items here, so if you have more than two items, attach a separate schedule which reports all the items and simply write the words “see attached list” on Line 6. Column (a) contains the description; Column (b) and (c) are used for the cost and elected cost, which should be the same.

5. Line 11 is called “Business income limitation”, another example of a simple tax rule with subtle complications. Here’s the scoop: generally, you cannot use the Section 179 deduction to create a business loss or increase a business loss. So if the total cost of your Section 179 items is less than your business profit, you can deduct the full cost of all these items. But if you already have a loss before taking the Section 179 deduction, or if taking the Section 179 deduction creates a loss, then you have to be careful here, and you should probably get some help to sort this out.

Put your business profit on Line 11 and the Section 179 deduction on Line 12, and assuming that Line 11 is greater than Line 12, you are done with Form 4562. The only thing left to do is to transfer the Line 12 amount to your main business income tax form, such as Schedule C, Form 1065, Form 1120 or Form 1120, depending on your business entity.