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Test Your Concept by Writing a Short Business Plan

April 16, 2012 | Comments: 0 | Views: 166

Are you an entrepreneur looking to test a new business concept? Sure, you could write a complete business plan, only to find that the concept doesn't work. Why not write a short business plan, get a handle on the key components to a business plan, and create an outline for a full business plan? This will provide you with an initial gauge on the concept, and tell you whether or not you should continue to develop it through the business planning process.

An executive summary should run approximately 3 to 5 pages. I prefer to format it in double columns for easy reading and reference. It should cover all the key components to a full plan, including company concept, market positioning, marketing and promotion, operating strategy, and financial viability. It requires a basic level of research into the market and industry to determine size and basic trends, and some basic research into the financials so you can put together a mini 3 to 5 year P&L.

Clearly, a short business or executive summary plan can't take the place of a full business plan, and there will be considerably more due diligence ahead if you decide to move forward. But this format will at least give you confidence that your hard work will be worthwhile.

The executive summary can also be used as a teaser document to distribute to potential investors. This will help you gauge interest and ability to secure funding. An interested investor might review an executive summary and then ask to see the full business plan.

If you're ready to get started writing a short business plan or executive summary, start by establishing your concept, mission, vision, values, and big picture goals and objectives. Next you can cover your industry and target market, and develop a mini marketing, promotion, and advertising plan. The operating strategy should cover management team, personnel plan, sales strategy, and location, production, distribution, if applicable. Finally, you will want to design a mini profit and loss that will show revenue potential, cost of goods sold, overhead costs (payroll, marketing, rent, insurance, phone and utilities, office supplies, etc), and profitability for the next three to five years. These are rough estimates, and should be as accurate as possible, but will provide an idea of the financial viability of your idea.

Once you complete this process, you will have a solid handle on your business concept, and the ammunition with which to make an informed decision about writing a full business plan.

Since founding L.D. Writing & Consulting in 2007, Laurie DeSalvo has provided resume services to hundreds of executives, managers, and senior professionals. Prior to founding the Company, Laurie served as a Vice President and Equity Research Analyst with Merrill Lynch and Deutsche Bank, where she spent close to 10 years developing C-level relationships, creating financial models, and writing research product. Ms. DeSalvo holds a Bachelor of Business Administration in Finance and Economics from the University of Richmond, along with the Chartered Financial Analyst (CFA) and Certified Professional Resume Writer (CPRW) credentials.

Source: EzineArticles
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