Home > Articles

  • Print
  • + Share This
This chapter is from the book

The Components of a Winning Business Plan

Now that you have the outline of your business plan in your head, let's look at how to translate your story into a written document.

In essence, you take your oral story and write it down, in a logical order. The typical business plan is divided into several distinct sections—each of which maps to a part of your business story. What you have to do is take the story you just told and sort it out into short sections that help the reader understand just what it is your business is about.

Of course, your particular business plan can contain more or fewer or different sections than presented here, but it should contain the same information—because this information will describe and drive your new business. If you were writing a business plan for a big corporation, each section might be several pages long. For the purposes of your eBay business, though, think along the lines of a few sentences or paragraphs, instead.

You see, the length of your business plan document depends entirely on your particular circumstances. If your business plan is solely for your own personal use, there's no need to make it any longer or fancier than it needs to be; it's even okay to write in bullets rather than complete sentences. If you expect to present your business plan to others, then by all means go a little fancier and use proper grammar and punctuation. The key thing is to include all the information necessary to get your points across.

Next, we'll look at the individual sections of your business plan separately.

NOTE

This chapter presents the type of bare-bones business plan you need for a small eBay business. If you want to create a really serious business plan—or a plan for a larger business opportunity—check out my companion book, Teach Yourself Business Plans in 24 Hours (2001, Alpha Books).

Mission

This part of the plan, typically just a sentence or so long, describes your dream for your business—why you're doing what you're doing. Although this is the shortest section of your plan, it is sometimes the most difficult section to write. That's because many people find it difficult to articulate the reasons why they do what they do.

NOTE

A mission is different from a goal in that a mission defines a general direction, while a goal defines a specific target. A business will have but a single mission but can have many individual goals.

Sometimes called a mission statement, this section describes the what—what your business does and what you're trying to achieve. Someone reading your Mission section should know immediately what your business does—and what you don't do.

Using our ongoing example, a relevant mission statement might be something like: "I intend to sell high-quality gift baskets to targeted buyers on the eBay online auction site." It should not be "I plan to make a lot of money on eBay;" that isn't a very specific mission, and it certainly isn't market-driven.

Opportunity

This section, sometimes called the market dynamics or market analysis section, describes the compelling reason for your business to exist—in other words, it presents the market opportunity you've identified. Typically, this section starts out by identifying the target market, sizing it, and then presenting growth opportunities.

The goal of this section is to describe the market opportunity you seek to pursue, and to convince potential investors that it's a significant enough opportunity to be worth pursuing. As such, this section will include narrative text (you have to tell a story about the market) and some amount of numerical data. Which data you choose to present, how you choose to present it, and how you weave it into your narrative will determine the effectiveness of this section.

When the Opportunity section is complete, the reader should understand the basic nature of the market you choose to pursue, the size of that market, the market's growth potential, and the types of customers who comprise the market. You can obtain most if not all of this data by searching eBay for similar types of merchandise, or by browsing through relevant categories.

Why do you need to present market data in your business plan, anyway? The answer is simple—to help you sell prospective lenders and investors on your specific business strategy. You also need to realistically size the opportunity for your own needs; you don't want to pursue merchandise categories that aren't big or robust enough to achieve your financial goals.

In the case of our ongoing example, you might want to include data on the number of similar auctions during a particular period, the average selling price for these items, and the close rate (number of auctions that result in a sale) for this category.

Strategy

This section of your plan describes how you'll exploit that immense market opportunity described in the previous section, and puts forward your potential eBay activities. This section typically includes information about the products you'll be selling, as well as how you plan to obtain and market these products. In essence, you want to describe the business you're in, what you plan to sell, and how you'll make money. You'll probably want to include some sort of timeline that details the major milestones you will likely face in successfully implementing your new business.

For our ongoing example, you'd explain that you're selling gift baskets (and maybe describe what a gift basket is), present where and how you're obtaining your merchandise, describe how you'll be selling the items on eBay, and then detail the selling price, cost, and profits associated with your sales.

Organization and Operations

This section describes your company structure as well as the back-end operations you use to bring your products and services to market. If your employee base consists of you and no one else, that's okay; if you have plans to hire an assistant or two, throw that in. The key thing in this section is to describe your "back office," how you plan to get things done. That means describing how you'll create your item listings, how you'll warehouse your inventory, and how you'll pack and ship your merchandise.

In short, this section of your business plan is where you detail how your business is structured and how it will work.

Strengths and Weaknesses

This is the last text section of your plan. A lot of businesses don't include this section, but I think it's well worth writing. In essence, this section lays bare your core competencies and the challenges you face—which are good to know before you actually go into business.

I like including strengths and weaknesses in a business plan, for several reasons. First, summarizing your unique competitive advantages serves to highlight those unique aspects of your business strategy. In addition, ending the text part of your plan with a list of your strengths is a great way to wrap things up; you leave your readers with a summary of the key points you want them to remember. Finally, by detailing potential challenges you might face, you get the chance to reassess the reality of what you're about to attempt—and to proactively address these issues before they become real problems.

Remember, when you answer potential challenges with distinct strategies, you turn your weaknesses into strengths—and present yourself as being both realistic and proactive.

Financials

The final section of your business plan document is the Financials section. This is where you present the financial status of and projections for your business. Put simply, these are the numbers—at minimum, an income statement and a balance sheet. You'll want to include your current statements (if your business is already up and running), and projections for the next three years.

Whether you're borrowing money or trying to attract investors, your potential business partners will want to know what size of a business you're talking about, how profitable that business is likely to be, and how you expect to grow revenues and profits over the years. Your financial statements provide that critical information. In addition, this section helps you come to grips with the financial realities of what you plan to do.

In a way, the Financials section defines the goals you have for your eBay business. The revenues and profits you project for future years are your company's financial goals—they're the yardstick with which you'll measure the success of your business strategy over the next several years.

NOTE

Although there are a few common financial statements that everyone will want to see, know that different lenders and investors will have different requirements in this regard. You may want to enlist the assistance of a qualified accountant or financial advisor to help you prepare these financial statements—and to prepare for any financial questions that may be asked of you.

When you're making your projections, you should make sure that the numbers you forecast actually make sense. Is there a logic to the revenue buildup over the period? Do the projected expenses make sense in relation to the projected revenues? Are these numbers realistic? Are they achievable? Are they comfortable—to both you and to your investors? Bottom line, do the numbers feel right?

Remember, the numbers you put together quantify your financial goals; once you accept them, you're committing yourself to running a successful eBay business.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020