In This Fourth Article on Business Plans, Bonnie Drew Begins Looking at the Actual Information You'll Need to Include.
By Bonnie Drew
Part Four
In writing your business plan, you must tell potential investors or partners about your idea. You'll be defining the business, describing your product or service, and listing your resources. In this issue, let's begin looking at exactly what your business does.
WHAT ARE YOUR PRODUCTS AND/OR SERVICES?
There are basically only two ways to earn money in the world: (1) Sell a product or (2) provide a service.
Your business may be based on selling a product like candy, T-shirts, soap, muffins, or Christmas bells. Or your business may be based on getting paid to provide a service: washing cars, shoveling snow, doing magic shows, or cleaning bird cages.
Analyze your business and make a list of the products and services you provide. Make a second list of products or services you would like to add to the business as it grows. Both of these lists are important to include in your business plan.
WHAT ARE THE ADVANTAGES OF YOUR PRODUCT?
The big question is: What makes your product or service better than other products available to the customer?
When you are confident your product serves your customer better, you will find it easy to sell. Spend some time writing down all the good features and advantages of your product. This list of competitive advantages will be part of your sales pitch when you start marketing. Include it in your business plan.
HOW DO YOU PRODUCE WHAT YOU SELL?
Every business needs a step-by-step plan for producing its product or service. One way to write this plan is to pretend you're trying to explain your procedures to someone who knows nothing about your business. Then write all the steps of operation in logical order and include them in your business plan.
HOW MUCH CASH ARE YOU INVESTING?
The cash you invest to start your business is known as your capital investment. It's important to track how much cash you put into the business, so you know if your investment is making a profit.
Service businesses are the easiest for young entrepreneurs to start because they require almost no cash outlay. Businesses that sell a product require more startup money because you have to buy supplies to make the product, or you have to buy the product in bulk from a supplier.
If you need cash to start your business, you may have to work a service business temporarily to earn the startup capital for the business you really want to start.
NEXT ISSUE: More on the Business Plan
Bonnie Drew is the author of FAST CASH FOR KIDS (2nd edition), published by Career Press (1-800-227-3371). She is also the creator of the KIDS BUSINESS software for young entrepreneurs, available from Homeland Publications (713-332-9764).
Drew is also Editor of YoungBiz online magazine, published by Kid's Way, Inc., a company that helps youth prepare for business and the workplace of the 21st century. For more information, write to Kid's Way at 5589 Peachtree Rd, Chamblee, GA 30341 or call toll free 1-888-KidsWay (1-888-543-7929). YoungBiz magazine can be found at http://www.youngbiz.com
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