Entrepreneurship 101: Business Plan Examples
There are generally two types of business owners — those who get struck by inspiration and dive right in, and those who like to brainstorm and play around with an idea. What both these types have in common, however, is that neither usually starts by writing any business plan examples.
And it’s not surprising. When you’re excited to get your new business going, the last thing you want to do is sit down and write an actual business plan. Besides, with start-ups becoming more fast-paced and less formal, is a business plan really necessary?
The answer is yes, if you ever want your own business to get outside funding. Banks, investors, creditors, and potential partners will all want a business plan — and a rather comprehensive one, too. These kinds of plans usually contain detailed financial information, long-term projections, market analysis, and charts and graphs.
If you run an independent outfit you should still put your plans on paper. Even if no one else but you reads it. The practice of writing a simple business plan forces you to solidify your idea and consider every aspect of the company, especially the ones you tend to neglect.
No matter how you write it or what type of business you’re in, any good business plan outlines your overall direction, focuses your efforts, and defines the best strategies for you to reach your business goals.
Below is an explanation of everything that goes into a standard business plan as well as business plan examples. Each section starts with a brief description, and ends with an example, using the fictional company Raw Bar, an e-commerce store that sells its own line of skincare products.
An executive summary is a short overview about your company, its objectives and mission, and its path to successfully achieving those goals. Essentially, it’s a condensed version of what can be found in the business plan.
The primary purpose of the executive summary is to get readers — typically financiers, investors, or potential partners — interested enough to read the rest of the plan and ultimately, support the business with its needed investment.
Executive Summary Example
Raw Bar is an e-commerce company carving its niche in all-natural, handcrafted skincare that blends the best of Eastern and Western ingredients. Our office is based in Los Angeles, California, where we are able to observe and address the growing market demand for natural yet effective products. Our current line includes soaps, oils, lotions, and scents, which are sold online and through consigning stores.
This business plan is written as an internal guide for the company, as it continues to drive its early growth with increased production and sales efforts. Every quarter, the team will meet to assess our performance in comparison to the plan, and make any adjustments based on new developments and findings.
While Raw Bar has enjoyed early market success and has earned a profit since its sixth month of operation, it has set new goals for the coming years — which is to expand into wholesale and private label production (manufactured by our company for other brands).
Within the next year, Raw Bar intends to secure larger consignment opportunities and offer skincare production services to other brands. It also plans to continue the growth of its e-commerce store by hiring a dedicated online marketing and support team.
Raw Bar’s objectives for the next year is:
– To increase brand awareness and presence of the Raw Bar brand
– To develop an effective sales outreach strategy that gets our products into at least 20 large retail stores
– To increase in-house operations and develop a robust product catalog to offer to other retailers for private label production
– To continue growth of online sales and increase follower numbers and engagement levels
Raw Bar’s mission is to provide the best all-natural, handcrafted skincare products that blend both Eastern and Western ingredients for as many people as possible.
Keys to Success
Raw Bar’s keys to success are:
– Low overhead costs
– Design and development expertise
– Good brand awareness and recall
– Strong support network
– Small and nimble team
Now, it’s time to focus on the company description itself. Share something about the founders and key team members, why the company was founded, and what problems it hopes to solve.
You can also use this section to highlight any notable accomplishments or assets that give the company a competitive advantage. (e.g., ideal location, modern technology, team expertise).
Company Summary Example
Raw Bar, LLC is a relatively new start-up, founded and based in Los Angeles, California, since last March 2018. The company’s main office is 1,000 square feet, where it handles all its production and operations.
Raw Bar was founded by dermatologist Reena Lee and editor Ana Roley, who both bring their expertise in providing all-natural, handcrafted skincare products at an affordable price.
The company currently has four product lines — soaps, oils, lotions, and fragrances — all of which are developed using the best blend of ingredients from around the globe.
Since launch, Raw Bar has been featured in several notable publications, including Allure, Bazaar, and Into The Gloss.
Raw Bar’s start-up costs amounted to $35,000, most of which went to product sourcing and development, legal fees (for business incorporation), web development, and office rent and equipment. These costs were financed by the two founders, as well as a $10,000 line of credit from Bank of America.[Note: This would be a good place to insert any financial documents, such as balance sheets and income statements that show your financial history, yearly growth, and overall performance.]
Products and Services
Most businesses make their money through products or services. This section is used to explain what you sell and how you plan to make money. Aside from describing the actual product or service, explain how it benefits your customers and stands out from your competitors. Include any “tricks of the trade,” such as your research and development strategy or any plans for intellectual properties, trademarks, or patents.
Products and Services Example
Raw Bar produces, markets, and sells its own brand of all-natural, handmade skincare products to individual consumers through its e-commerce store. Every single one of its products are specially made without any animal products, artificial coloring, parabens, petroleum, synthetic preservatives, or filler ingredients.
Instead, they include natural elements such as activated charcoal, natural clays (bentonite and dead sea), and an array of essential oils (amyris, clove, cedarwood, palmarosa, pine, etc.) and herbs (arnica flowers, calendula flowers, gotu kola, lotus root, etc.).
Its product variants are all special to Raw Bar and produced completely in-house, with some taking months to formulate. Product prices retail anywhere from $10–$30 each. Raw Bar is committed to producing affordable products, with all products priced below $75 (except those produced for private labels).
The company also accommodates bespoke orders upon request for a minimum batch of 20 pieces.
We believe that all-natural is really what’s best for humans and the earth, and we aim to produce products that do well for everybody.
Market and Industry Analysis
To succeed in the industry, it helps to have a good grasp of your target market, product category, and other companies that are competing within the same space. Who are your top competitors? What are your strengths and weaknesses, in comparison to them? How do they affect you now and in the long run?
This section should cover all the players and factors that play a significant role in how you do business. Knowing about the space around you will help you plan your products accordingly, and your strategy more effectively.
Market and Industry Analysis Example
The market for natural skincare has experienced rapid growth, with projections to become a $54 billion industry worldwide by 2027. This market is characterized by young individuals who are looking for good brands and businesses, prefer to read about a product before making a purchase, and are willing to try new brands (instead of sticking with ones their parents used).
There has also been a shift in the perception of all-natural products. No longer regarded as off the beaten path or too expensive, natural products are now the norm. They are not only an option, they are a preference.
For the next year, Raw Bar plans to focus its marketing efforts towards the U.S. market. Based on our research, our average customer is predominantly female, lives in an urban environment (in or near a major city), is well-educated, tech-savvy, and comes from many different income levels.[Note: This is where you would insert a marketing analysis chart or other diagrams based on your customer surveys or market research.]
Around the world, people are becoming more proactive with their purchases. Specifically in the skincare market, they are no longer just looking for aesthetic benefits — they are looking for products that are all-natural, good for the body, and safe for the environment. Furthermore, due to the younger market’s concern for self-care and self-love, there is a movement towards more authenticity in both brands and what brands offer.
In the past, the skincare industry has largely favored large houses with large advertising and marketing budgets. Today, however, quicker and smarter marketing efforts can be just as — or even more — effective in gaining market share. With a good business idea and proper execution, online and social media efforts can be all a company needs to grow its brand.
Currently, the natural skincare market leaders are:
- Drunk Elephant
- Juice Beauty
- True Botanicals
Another global market trend that has been an advantage for Raw Bar is the rise of e-commerce. Brands have started focusing on online retail as a way to lower overhead costs and provide better products, easy-to-access information, and customer service.
As seen by the recent success of companies both big (Amazon and Ikea) and small (Warby Parker and Glossier), people are now comfortable doing the majority of their shopping online and paying for convenience.
Strategy and Implementation
So far, the business plan has covered the past and present state of the company. This is where you begin to share your plans for the future, namely your company’s marketing, pricing, and sales strategies.
Introduce the section with a high-level look at your strategy and implementation efforts. This should be done using a clear list of objectives and action steps, and strong descriptions on how you and your team plan to see the strategy through. By the end, the reader should be confident that the company has what it takes to grow.
Strategy and Implementation Example
Raw Bar’s strategy is to grow its market share of the all-natural skincare industry through online sales and increase its revenue by offering wholesale and private label production.
The steps outlined below are intended to help build Raw Bar as a brand that represents high-quality, specialty skincare at a good value, and as a company that other brands and retailers trust.
– Hire a dedicated online and social media marketing team to generate awareness among our target market (using data, audience targeting, and direct outreach to those who are already online)
– Engage in partnerships and collaborations to help expand our community and network
– Build long-term relationships with clients (other brands and retailers), in addition to our relationships with individual customers
– Spread awareness of the different purposes of our product lines and why people should choose all-natural products in general
Raw Bar’s pricing strategy is to position itself as a high-quality, handcrafted product sold at a good price. It’s current product line retails anywhere from $10–30 a piece, with the company committed to producing affordable products below $75 (except those produced for private labels).
– Focus on online efforts, such as advertisements and e-newsletters, in order to keep overhead low while still sharing information about our brand and products to our target market
– Partner with like-minded brands as a way to grow our market and network
– Introduce our wholesale and private label lines, and target larger retail stores and outlets for consignment, which will help lower overall costs and generate more revenue streams
– Introduce a subscription model that can guarantee continued sales and a dedicated customer base
Raw Bar’s strategy is focused on acquiring its first wholesale and private label clients, while continuing to grow its base of customers online. This year, it also plans to target larger stores and outlets for consignment, which will help increase overall product sales and growth.
– Prioritize the growth of the brand, not just the products, by partnering with like-minded companies and expanding presence in bigger retail stores and locations
– Launch more informative marketing campaigns and e-newsletters to promote the benefits of the brand and its products
– Contract a dedicated online marketing and support team to focus on online efforts and help engage our target market more effectively[Note: This is where you can place sales forecasts and milestones, based on any past data and future projections.]
Finally, financial projections will help support any funding requests (if you’re business plan is intended for investment purposes). The goal is to prove that your business will be financially successful and something worth investing in.
Aside from any assumptions that you used to base your projections, the bulk of this section is comprised of charts and graphical data, such as break-even analysis, projected profit and loss, projected cash flows, projected balance sheets, and the like.
If you’re already in operations, include any past data you have (3–5 years should be enough) and any collateral you could possibly put up against the loan or investment.
Financial Projections Example
Raw Bar has been profitable since its sixth month of business, thanks to keeping a low overhead, maintaining in-house operations, and growing organically. The company was initially funded by its two founders, with a credit line from the bank supported by company assets.
Our financial plan rests on key underlying assumptions, which are as follows:
– We assume a continued growth in the demand for natural products, especially in the skincare industry
– We assume manageable costs for our e-commerce efforts, as online tools are quite affordable and readily available[Note: This is where you can place any data that supports your assumptions and any other financial statements, both from the company’s previous years of operation and its projected forecasts moving forward.]
Business Plan Examples: Get Down to Business
It’s true that business plans can take some time and effort at the start. But they can also end up saving business owners much more in the long run.
Whether you’re operating a big or small business, the process of writing a business plan allows you to take a moment to sit down and think thoroughly about what you want to do, consider all aspects of the business, and come up with specific action steps.
No matter what kind of business plan you end up creating — a one-page business plan or a dense 50-page document — having one is certainly an important tool to get your business started on the right foot.
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