For a business to be successful, the one thing it needs initially above anything else is a solid business plan. It is impossible to get any investor funding or a bank loan without a business plan. Even if you pay for the business yourself, a business plan will help you plan things out and know the direction you want to move in. Without a business plan, the success of your business and your consignment store is uncertain.

What Goes Into a Business Plan

There are several elements that make a business plan successful. Taking the time to put these elements in will not only give you a clear direction to move in with the business, but it will make your consignment shop more successful in the long run.

1. The first part of your business plan is what is called a Profile of Principles. This is where the work experience and background of you, the owner, is outlined. You want to show in your business plan why you are experienced and ready for running a consignment store and that is why you put this at the beginning.

2. Next, you will put in a Statement of Purpose. This is where you state what the consignment store will offer and what type of business you will be running. This only needs to be a few sentences long.

3. After the Statement of Purpose, you need to put in a Market Analysis. This is the point where you address the economy in your area and in the country, and assess the market viability of the consignment store. Some things to include is a location study, an analysis of traffic patterns, what market you are targeting and what your competition is like.

4. How are you going to promote the consignment store? This question is addressed in the Promotional Strategies section. You want to explain everything you will do to bring in business to the consignment store, including all advertising and marketing strategies.

5. The next section is your Operational Plan. In this section, you outline some facts about the store, how it is going to operate, what equipment you need and when it is open.

6. In the Timetables and Schedules section, you need to set a list of goals for your consignment store. These include how long it will take to remodel it before opening, when you will open and how soon after before you start turning a profit.

7. The next section, which is the Potential Pitfalls section, is vitally important. It is here that you address some of the problems that exist with your business. Many new business owners choose not to include this because they worry about driving an investor away. This is not the point of that section. The point of it is to show the pitfalls that exist and to show how you will address them. An investor or bank would rather have an owner who knows the pitfalls and combats them, than one who ignores them.

8. The next three sections deal with the finances. Since your business has not started yet, you will have to estimate how well the business is going to do. Talking to your accountant will help ensure you get accurate results for these financial statements. These statements are:

a. Monthly Estimated Fixed Expenses: How much you will be spending on payroll, utilities, advertising and rent every month.

b. Initial Capital Investment: This is how much money needs to be put up-front to pay start up costs including new signs, advertising and renovations.

c. First Year Projections: This is where you will address what you hope to make in the first year, and how you will make that profit.

A business plan does not have to be perfect, but it does have to show that you have done your research and that you know what you are getting into with a consignment store.

If only 10% of businesses succeed – you want to make sure you’re one of them. This business plan layout will help you do that.

Most businesses fail because they run out of cash. Even highly profitable businesses can run into cashflow problems if they try to expand too fast for their level funding.

Your business plan strategy has to match your level of ambition to the level of funding you can reasonably expect to invest. If you can’t acquire sufficient investment, you have to reduce your ambition.

So, one of the most important outcomes of the business planning process is to decide on your ambition and work out the level of investment required and how you intend to fund it.

If you’re requesting a loan, the lender will expect your business plan to clearly show how you intend to spend the loan capital and that the business can generate sufficient cash to service the debt in terms of both interest and capital repayments.

If you’re aiming to attract equity finance, the investor will expect your business plan to indicate the expected return-on-investment as well as the likely exit strategy and timescale. This will then be compared to other opportunities they may have under consideration.

For it be fit for purpose, you have to write a business plan according to who will read it. Lenders and investors are busy people, so you need to provide the answers they require within the first 1 or 2 pages of the plan. They can then decide whether they’re interested enough to read further. So, the business plan outline should begin as follows:

1. Executive Summary

Now, whatever your level of ambition, the market has to be large enough to satisfy it, especially when you take into account the extent of the competition you’ll encounter. So, the business plan has to show an analysis of the market opportunity and how you intend to exploit it with your products and services. It also needs to show how you plan to market your brand and attract customers. This leads us to define the next 3 sections of your business plan:

2. Market Analysis
3. Products and Services
4. Marketing Plan

OK, you’ve explained your market, what you intend to supply to that market and how you intend to market your products or services.
Now you need to explain the infrastructure you’ll need in order to deliver the products or services and how you arrived at your present position. If a potential lender or investor doesn’t think your business is equipped with the right capability and experience, they won’t be inclined to invest. This leads us to define the next 2 sections of your business plan:

5. Company Background
6. Company Structure

The section on Company Structure should include any resources, equipment or systems you have or will require in order to deliver your products or service. It is quite likely that you’ll be using some of the funding to create the Company Infrastructure.
There is one more essential section that any lender or investor will expect and that relates to risk. You need to show that you’ve considered areas of risk and how you might mitigate for them. I tend to refer to this section as:

7. Business Analysis

In this section you should include your S.W.O.T. Analysis (An assessment of Internal Strengths and Weaknesses and External Opportunities and Threats) and a Sensitivity Analysis (An assessment of how far certain parameters can move for the business to remain viable).
If they’re interested in evaluating the opportunity, they’ll need to take a closer look at the numbers.
So, they’ll expect to be able to view your projections for Profit and Loss, Cashflow, Balance Sheet and a Sources and Use of Funds Statement. This we’ll refer to as:

8. Business Financials

Finally, if you’ve referenced any material or wish to include any supporting information it’s better to avoid cluttering the main body of your document and add it all in a section at the end:

9. References and Appendices

And that’s it. For a lot more detail about why this 9-section structure works and exactly what to include in each section, you can read my book:

The Heart of Business Success – How to overcome the Catch-22s of growing your business

To obtain your copy, please visit: http://www.theheartofbusinesssuccess.com
Good luck!

When you set out to start your own business, you know that you are going to have to take care of a lot of different things from paperwork to securing the money you are going to need to get started. If you are planning to secure a loan or a grant to start your business you are going to have to prepare a solid business plan. The problem with this is that a well thought out business plan can make a novel look like a comic book. In the same way that most editors do not have the time to read every manuscript that comes across their desk, investors lack the time to read every business proposal that they receive. In order to get your plan noticed you are going to need to use an executive summary template.

The executive summary is a highly condensed version of your business plan. This is your chance to present the highlights of your plan to investors in a way that they will be able to read it within a few minutes instead of taking hours to pour over the hundreds of pages of your original plan. You will have space to present your ideas in their best light, show them how you plan to spend their money and how it will help you secure a return on their investment. This summary is designed for the busy investor who simply does not have the time to read the whole plan unless he is already interested in it.

When you are looking for a template you need to make sure that the one you choose follows the most commonly accepted format. When investors start looking at these summaries, the last thing they want is to have to search all over the page to find the relevant information. You are only going to get one chance to make the kind of first impression that is going to secure the funding you need for your business. Read any instructions that come with your template carefully as they can help you to understand what it is going to take to create an eye catching executive summary.

Your summary needs to be clear and concise as the people who will be reading it do not have the time to sift through a bunch of fluff to get to the meat of your proposal. You must get the reader’s attention within the first two paragraphs or you are going to lose their attention. Once their attention starts to wander you have lost them and your summary will probably end up in the trash. You can find an executive summary template online that can be downloaded for free, in fact you can find a wealth of them and you should try several before you decide which one you should use.

Many new business plan writers think the perfect business plans format is one that covers as many pages as possible and feels thick and heavy in the hands of the investor or banker they are handing it over to for review and possible funding. Nothing could be further from the truth. The reality is that bankers and investors are busy people and as exciting as your business it to you they don’t actually have a lot of time or interest in wading through your opus of a plan.

What this means is that the perfect format for a business plan is one that conveys the critical information they will need to make an investment decision in the shortest and most efficient form possible. If this results in a plan that is only ten pages long instead of twenty five then that is fine.

The key thing to remember is that if you generate interest you can always provide more information later but you are not going to get anywhere by trying to drown people in information right off that bat.

Therefore, the best business plan format is one that highlights only the critical information that you need to put in a plan: who the product or service is for, how it provides a better solution than whatever is currently available, how big that market is and how you will reach that market. The plan must also address the capabilities of the team planning to pull this ambitious plan off with the money they are hoping to raise. If the business plan format you are using can do all that then you have found a winner – if not, keep looking.

If you are a manufacturer wanting to use your business plan to attract investors, then your plan must do two things. It must:

Comfort prospective investors with putting their money into your hands, and Show why potential customers will award business to you rather than your competitors.
Earn the Trust of Skeptical Investors…

Prospective investors want to select the best investments. For an investor, this means earning the highest return on their money for the risk they take. Besides their own research, they seek more specific information from business owners and entrepreneurs about potential investment opportunities.

The major challenge to investors is deciding what is a good opportunity. Often asked to invest funds with little reliable information, investors have difficulty deciphering information about the various investment alternatives they are evaluating. This leaves them fearful of getting into an awful deal and skeptical of the deals being presented. In addition, time pressures often force investors to decide on investing in a business when their time frames don’t align with the business’ need for funding.

To your prospective investors, the most important factors you must show are results and evidence. They simply want the opportunity that they enter to match the expectations that they have developed. They want to be educated about the investment opportunity and the investment options available to them. But, they won’t accept this education at face value; they want to see the evidence to support it. Even for niche businesses.

When investors object to investing in a business, the objection is often of the “Educate me…” type. Tell me your story, show me your numbers, and then prove it. Prospective investors want information that they can validate, options and risks that they can see, and to be educated about your specific business. Moreover, they want to know why you and your team are the ones that can produce the projected results. If your business plan doesn’t address these “educate me” objections, it will fail to win the trust of your prospective investors. When that happens your plan will not get funded. Period.

If you successfully win the trust of potential investors, then you must be able to…

Show Why Customers Will Award Their Business To You Rather Than Your Competitors…

Investors invest money in businesses based on the business’ expected cash flow. To create cash flow, you must first win business. That’s why it is important for your business plan to show investors why customers will award you their business at a price that allows you to provide investors a return on their investment.

When potential investors begin evaluating your business plan, they are likely to be skeptical of your ability to consistently win business. In their minds, there is already a manufacturer who is providing the same or similar product as yours to your prospective customers. They are skeptical as to why prospective customers with little or no time to investigate the options available to them and who are reluctant to upset their own customer base would change manufacturers.

You can expect your potential investors to understand that your customers need to move product and generate higher margins. They expect quality and general customer support to be givens, the basic requirements to win business. Therefore, their focus will be on understanding how you help your prospective customers earn more money.

To your potential investors, the biggest problems your customers face are products that stay on the shelf, don’t work properly, or carry low margins… situations that cost your customers money and the opportunity to make money on other products. Does your business plan show investors how you plan to solve these problems? It should if you want to capture their attention.

Be sure to clearly explain why you can win over prospective customers who have extensive experience in dealing with manufacturers in your market space…customers who have “heard it all.” Your business plan has to reveal to investors how you’ll protect your products from damage during transit, guarantee their availability, offer a wide range of product selection, and modify the product as needed. In short, your business plan has to leave investors feeling confident that your product will be delivered as ordered, undamaged, on time, and working properly.

You’ll also have to convince investors that you can overcome the biggest objections your customers will have in switching manufacturers, which from the investors’ perspective will involve product quality and your ability to deliver on time. If the product stays on the shelf too long or doesn’t work properly because of poor quality then that is a problem. If the product can’t be used or sold because it hasn’t been delivered then that is a problem.

Prospective investors know that to win a customer’s trust you’ll have to show them quantifiable evidence that they can earn more using your products and that the risk of changing over to you is low. Since this is what it will take to win business, it is only logical that your prospective investors will want to see this same evidence before they invest in you.

Points For Manufacturers To Address In A Business Plan

In summary, if you’re a manufacturer trying to attract investors, these are the points you must address in your business plan:

How and why customers will earn more money doing business with you rather than your competitors. How and why they will have less hassles and it will be easier for them to do business with you rather than your competitors. How and why customers will face less risk doing business with you rather than your competition.

When you address these points with verifiable evidence to support your position, potential investors will have to conclude that they would be foolish to invest in any other manufacturer but you.