{photo by nankano}
In today’s section of the Business Plan Challenge we are going to focus on the Business Concept. It is here you will write about both your business and the industry as a whole. You also get to do some fun stuff like the Mission and Vision Statements, as well as your Business Goals; these are areas where you get to really dream and be creative!
Before we get started, a few tips:
- Write as though the person reading it doesn’t understand a thing about your business. Put everything in simple terms and leave out the industry specific jargon.
- Leave out “I” and “we”. Instead, use your company’s name or some variation of “the company”.
- Avoid words like “might,” “maybe” and “however”.
- And last, be positive! This document is selling your business idea!
Now! On to the writing!
Business Description:
The description of your business venture should give the reader an idea of what your business is all about. This includes the name of your business, expected form it will take (i.e. sole proprietorship or incorporation), names of key personnel (you, any partners or investors), names and description of main products and/or services and purpose they serve, why your business is unique (explain why customers will do business with you), and a brief description of what you have done or are doing to start the business (do you have any existing or potential customers; if so, mention them).
Industry Overview:
The Industry Overview outlines the current state of your business industry and consists of four subsections: Industry Description, Industry Segment, Growth and Trends, and Barriers to Entry. A lot of this information for this section comes from the Market Research you did last week. In this section you will not be talking about the specifics of your business, instead you will be addressing the market from a wide view down to narrow view. Think of it as funnel. We’ll start broad at the top and work our way down to the specifics at the bottom.
We know a few of you were confused about the NAICS codes we discussed last week. The NAICS, or North American Industry Classification System, groups together businesses into categories. By finding your code, you can also find information about businesses similar to yours. Let's carry on and see where this data fits in.
We know a few of you were confused about the NAICS codes we discussed last week. The NAICS, or North American Industry Classification System, groups together businesses into categories. By finding your code, you can also find information about businesses similar to yours. Let's carry on and see where this data fits in.
Industry Description:
An Industry is really a large group of businesses that have similar characteristics. In your business plan, include the Industry Description as a few sentences about the Industry your business will be operating in. Assume your reader knows nothing about your business and include things like size of businesses, value of sales and any special features your Industry might have.
For our business, it’s Retail. In our plan we included total Retail sales and number of establishments. An example of other types of businesses may be Services, Wholesale and Agriculture. The first two numbers of your NAICS code refer to your Industry. There is a complete list here.
For our business, it’s Retail. In our plan we included total Retail sales and number of establishments. An example of other types of businesses may be Services, Wholesale and Agriculture. The first two numbers of your NAICS code refer to your Industry. There is a complete list here.
Industry Segment:
The Industry Segment is a narrowing of businesses with similar characteristics. What if you have no idea where you fit in? Using the NAICS website, you can search using key words for your business. For today, lets start a stationery store. If you search for “stationery” you’ll see a whole list of different codes that apply to the stationery business. I selected the last one on the list, my Industry Segment, Stationery Store, code 453210.
Using that code, search on this page (I’m not sure why the two are not linked together) for lots of census information about your business segment. The Stationery Store page is here. You’ll notice the funnel from Industry, Retail Trade, to Office Supplies and Stationery stores.
From researching your NAICS code you can see what percentage of sales your Segment has verses the Industry, number of establishments and size of business based on employees. You can also use this code and its name to search at the library or on the Internet.
A lot of businesses won’t fit perfectly into one code. For the sake of writing your business plan, I would suggest going with the 80/20 rule. 80% of your business is going to come from 20% of your customers. Is that 20% wholesale or through a store?
Using that code, search on this page (I’m not sure why the two are not linked together) for lots of census information about your business segment. The Stationery Store page is here. You’ll notice the funnel from Industry, Retail Trade, to Office Supplies and Stationery stores.
From researching your NAICS code you can see what percentage of sales your Segment has verses the Industry, number of establishments and size of business based on employees. You can also use this code and its name to search at the library or on the Internet.
A lot of businesses won’t fit perfectly into one code. For the sake of writing your business plan, I would suggest going with the 80/20 rule. 80% of your business is going to come from 20% of your customers. Is that 20% wholesale or through a store?
Did you make it this far? We swear the rest is a lot less confusing!
Growth and Trends:
After you know a bit more about your Industry you can discuss it’s past, the current situation and future in the Growth and Trends section. What challenges does your Industry face? What opportunities are there? Use statistics to support your ideas.
Barriers to Entry:
What are the barriers that will stop someone else from setting up a business like yours? This could be education, experience, start up costs, etc.
Wow, did you make it through all that? Now comes the fun stuff!
Vision Statement:
The Vision Statement describes what you want your business to become. It is where you see your business in the future. This can be a few words to a few sentences and is the inspiration to keep going when things are going so well.
Mission Statement:
The Mission Statement is what gets you out of bed in the morning. It’s your daily business goal. It could include your business activities, what you want your business to be known for or describe how your business is unique. The Mission Statement should also be 1 to 2 sentences long.
Business Goals:
Business Goals are how you benchmark your success. Setting these goals today will make it much easier to see how far you’ve come in the future. It will help you evaluate what is working in your business. They will also help you make business decisions, as they will determine the direction of your business.
It is important to set goals that are achievable and realistic. You don’t want to disappoint yourself and miss the achievements you have made!
It is important to set goals that are achievable and realistic. You don’t want to disappoint yourself and miss the achievements you have made!
Strategic Alliances:
Strategic Alliances are other business that you can work together with to reach a common goal. A Strategic Alliance might be another business that targets the same audience as you that possibly leads to shared advertising. It could be sharing a retail store front with another business to reduce overhead costs. List here any alliances you might have and the benefits for both parties.
Wow! That was a long one! We hope you made it this far! Next Thursday, we’ll be talking about your Marketing and Sales Plan. If you have any questions about today’s information please ask in the comments!
Lili Nedved and Henry Sinha are opening a brick and mortar retail store
in Vancouver, Canada. With lots experience staying up late and working
on Lili’s handbag business, iglubu,
Henry was recently promoted from an Electrical Engineer to Director of
Fabric Organization. Lili hopes her Finance degree will give her the
edge in the competition for Employee of the Month.
