By AllBusiness Editors In: What are the differences between these three elements? The objectives of your business plan are the most important part. Spell out your goals; specify results and activities that can be easily tracked.
Some formal requirements such as operating agreements and annual reporting. Board of directors, annual meetings, annual reporting required. Management Sole proprietor has full control of management and operations. Typically each partner has an equal voice, unless otherwise arranged.
LLCs have an operating agreement that outlines governance and management. Corporations have bylaws that outline governance. Typically managed by directors who are elected by shareholders. If one LLC member, typically pay taxes as individual.
If more than one member, typically pay taxes as partnership. Can elect with IRS to pay taxes as a corporation either c- or s. If standard corporation c-corptaxed as a business.
If dividends are distributed to shareholders, dividends are taxed at the individual level. Can elect with IRS to be taxed as an s-corp. Sole proprietor has unlimited liability. Taxes based on business income.
General partners have unlimited liability.
Members may have liability for taxes. Governing persons may have liability for taxes. This information is for reference only, for detailed considerations contact your trusted legal or tax advisors. Market analysis A market analysis will help you determine if there is a need in the marketplace for your product or service, who would be most likely to buy your offerings, and where your customers are located.
An analysis of your industry. Evidence of demand for your product or service. A description of your target market customer profile. Your market size looking at area demographics and the growth of your industry. Your competition and why people would choose your product or service over the competition.
Estimated sales volume and revenue. Your pricing strategy, including the price floor the price at which you would break eventhe price ceiling the maximum price people would consider paying for your product or serviceand your pricing relative to your competition same, lower, higher.
Your promotion and advertising strategy to reach your target market such as use of website, social media, yellow pages, news releases, personal network, cold calls, newspaper, radio, television advertising, direct mail, etc.
The costs and timing of your marketing activities. Operations plan This reflects all the basics of operating your business.
What are the lease terms? What will be required to get it ready with regard to zoning, permitting, construction and tenant improvements? Furnishing, fixtures, equipment and supply needs.
What will you inventory in what volumes? Who will your vendors be? · It also means that you don’t sit behind your desk building a business plan without getting out and actually talking to your customers.
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