Bond & Pecaro provides business plans for clients in the media and technology industries. Like feasibility studies, business plans may be developed for start-up opportunities, to expand existing product or service lines, to introduce new products and services, to expand into new market segments or geographic areas, to acquire and integrate new businesses, or to raise capital or financing.
A business plan can have several different purposes. Business plans are developed to help owners clarify their goals and provide a roadmap to achieving those goals for a new product, service, or business. Similarly, the plans are used to provide management and employees with specific goals and tasks to help reach company goals and milestones. Business plans are also an important document that can be used to attract capital. Potential equity investors or joint venture partners will require a business plan to evaluate the potential of the proposed business. Likewise, a well thought out business plan will be an important component to obtain financing from banks or other sources. For this reason, the author of the business plan must understand the purpose of the plan and its target audience.
A business plan can be quite different depending upon the purpose and scope of the business, product, or service. Although each plan is unique, there are several common elements that should be included in an effective plan. These elements include an executive summary, business description, market analysis, operational analysis, and financial analysis.
The executive summary is a key component of the business plan given that it is the first section reviewed by the reader. The section needs to provide a clear overview of the business and quickly capture the interest of the target audience. The executive summary generally includes the company’s mission statement, a short company overview, its products and services, financial benchmarks, strengths and achievements, and strategic goals and critical needs.
The market section of the business plan discusses the industry segment, the size of the market, a competitive analysis, potential market share, and pricing, distribution, and marketing considerations. Industry characteristics are evaluated including regulatory, economic, or technological barriers to entry; competitor fragmentation; and industry pricing structures. The size of the market will be defined and the historical growth trends will be analyzed for future growth potential, taking into consideration any seasonal or cyclical trends. It is important to identify the strengths and weaknesses of industry competitors, particularly the direct competitors. A critical assumption in this section is the target market niche of the company and a realistic assessment of the company’s potential market share.
The market share potential will be influenced in part by an understanding of the target customers, as well as the pricing, distribution, and marketing strategy. The company should understand the potential customers’ needs and demographics. With the benefit of industry and competitor research, the client can develop its pricing strategy. This will vary depending upon the industry and the quality and nature of the company’s product or service and where the product’s targeted price falls relative to its competitors. The distribution strategy may encompass the company’s direct sales force, retail outlets, the Internet, direct mail, industry representatives, or various forms of retail or wholesale distributors. The marketing plan will promote the company’s offerings to its customers. The promotional strategy may include a mix of direct and indirect advertising (radio, television, online, cable, publishing,), event or sales promotions, sponsorships, and joint marketing partnerships.
The business operations section will address the organizational, production, technological, operating, sales and marketing requirements. The organizational component will identify key executives and managers, define their responsibilities, and quantify overall department staffing requirements.
The production, technology, and operations sections will take the reader through the steps required to produce and distribute the product or service. In the case of a product, the design, development, material requirements, testing, manufacturing, and packaging process will be discussed in detail. For a service business, the discussion will include the process of how the company will deliver the information or service in the most cost efficient manner and measure the quality of the service.
Capital needs will be identified here. These may include real property requirements such as land and buildings, as well as any specialized equipment, computer hardware and software, furniture and fixtures, vehicles, tools, or test equipment. The benefits of any intellectual property such as patents, copyrights, license, or technology should be highlighted here.
The business plan will outline the promotional and marketing strategy for the product or service. In certain cases, it will make sense to develop an in-house sales force while in others it may be more cost effective to outsource the sales function. The optimal balance of traditional advertising through the use of radio, television, publishing, and cable outlets can be balanced with online advertising, email campaigns, social media, and other forms of digital media marketing.
Finally, the financial section will set forth the start-up costs, capital needs, and funding requirements. The financial statements should include projections for balance sheets, and income and cash flow statements. The statements should be shown in detail by month for the first year of operations and then quarterly or annually thereafter. It is a good idea to include a series of sensitivity analyses to provide potential investors and lenders with an insight into the potential risks of the business or service.
Bond & Pecaro has extensive experience in developing business plans and analyzing potential markets. Recently, Bond & Pecaro was retained by a major broadcast network to analyze certain economic feasibility issues and develop a business plan related to the launch of a digital channel that would be offered as a basic service over cable television and direct broadcast satellite (“DBS”) systems throughout the United States. B&P analyzed the proposed channel under three scenarios - as a branded non-commercial channel, a branded commercial channel, and a non-branded commercial channel.
Bond & Pecaro has the experience and resources to construct an effective and detailed business plan for media and technology companies that can be used as a blueprint to raise capital, attract financing, or guide the company to achieving its strategic goals.