Eye on Entrepreneur > The Business Plan

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Writing a business plan is not an easy task and there are many sources available to help with the fundamentals and structure of your document. Every plan however must cover five essential areas. For starters, clearly define your product or service and how you plan to differentiate it from the competition.

Next gather demographic information about your specific target market. You must be able to quantify the potential market for selling your product or service. The internet can be a valuable source for gathering this information.

Your next step is to describe how you intend to market yourself. Will you rely on traditional media like radio, TV and print, or will you target online marketing relying on paid search and affiliate marketing. In 1999, Smooth Fitness consisted of five specialty fitness retail stores but saw the internet as the only way to grow the business in a cost effective way. Through pure online marketing, utilizing search engines, pay per click and affiliate marketing the company is now the largest retailer of fitness equipment on the internet, currently ranked 240th on the Internet Retailer’s top 500 list with worldwide distribution of quality treadmills and elliptical trainers for the home.

Once you have defined your product, market potential and marketing strategy, describe the people that will make it all happen. Provide biographies of the key staff and be sure to include all of the ingredients necessary to execute your plan.

The final section of the business plan is your 3 to 5 year financial projections. These must include income statements, balance sheets and a statement of cash flow accompanied by a detailed narrative describing the assumptions that were used for every number. This section must also include a summary of your specific capital needs to cover startup costs and working capital. This could be in the form of bank credit or investor equity.

Once you have completed these sections of your plan, it is essential to pull them together with a high level executive summary. This is the first thing lenders and investors will turn to and it must succinctly tie your vision to your ability to fund and execute on your plan. -- Marc “Stretch” Cerceo is the COO of Smooth Fitness