Business plans are a necessity if you are trying to get finance for a new business. Most investors or loan companies will not look at you twice unless you show them a detailed business plan.

Many people don’t bother with a plan as they feel it is not necessary. But you mainly need a business plan for yourself. The actual process of creating a business plan will do you wonders for the long term success of you business. As you work through your plan you will come across a list of questions which will highlight areas of your business which you may have overlooked or which need more research. Even if your not asked for a business plan it is well worth doing one and referring back to in the weeks and months to come.

So what makes a good one?

A good business plan should be a long term strategy for you business. It should include everything that you will need to do to run your business, including what the actual activity will be, what resources you are going to need. You need to detail your employees, money, time, equipment or stock.

Your business plan should include

o your business idea – what you do, sell etc
o who your target audience is
o your projected revenue and expenses for a year
o list of your major competitors and how they are different to you
o marketing plans and what results do you expect from them
o how much you expect to sell and when
o resources (e.g. money, employees, premises, equipment)

With your business idea you need to explain clearly why you are different from your competitors, what you are offering that is different and why your target audience should use you. Include how much your products or services will be and explain any market research which was undertaken. If you haven’t done any market research you should stop writing your plan and so some.

In the marketing section you need to explain who needs your product, where the purchasers will be based, your competition and why you are better or different. Also if is worth mentioning any emerging or growing trends in the market including impending changes and what the effects will be to your business from these changes.

If you have a team of people as part of your resources you should explain what each persons job role will be, what their strengths and weaknesses are and if there are any gaps how you will fill them.

The financial projects are very important and you should try to ensure they are as accurate as physically possible. Ensure you explain what your likely profit and expenses will be including any assumptions.

The more research and planning you do the better chance your business has of succeeding. So get researching and get planning and you will soon be reaping the rewards.

I read a lot of business plans. I may be one of the few people who read them for business as well as pleasure. Having read a ton of business plans over the years I have seen my share of truly well crafted, edited and delivered business plans. I have also seen my share of business plans that I considered an embarrassing display of business thought.

Mistake #5 – If you’re bored writing it, guess how much more bored someone else will be reading it?

If you’re not enjoying writing your businesses plan then what makes you think someone else is going to enjoy reading it? When I look at a business plan, the person who is buying a business or starting the business usually writes it. This person more than anyone should be the most passionate about the business or the idea they are pitching.

“Make it your own and own it”

When I get a business plan and its boring or lacks any passion the first thing that comes to my mind is to wonder if this person isn’t passionate about their business why should I be passionate about it?

There are a lot of business plans on the Internet, books and software. Most of them use a very specific formula and approach. Many authors of business plans believe that the outline or the piece of software that spits out a business plan, or the way its written in a book is the way a business plan has to look, sound and feel. Nothing could be further from the truth!

TIP: Use and outline so you don’t miss any relevant parts of the business plan, but use your own voice and style. Make it your own and not another software rehash.

MISTAKE #4 – Bigger is better –

You know what? If you have a 200-page business plan for a coffee shop with 3 employees then your plan is too big. Most lenders or investors are looking for very specific information in your business plan. Usually, they are looking at your assumptions, your management team, your exit strategy, etc. Adding more words will not make your business plan more true. Most investors will not be fooled by a thick business plan, especially if they have to dig through a bunch of pages to get to one or two paragraphs.

TIP: If a word, sentence or paragraph doesn’t add value to what you’re trying to convey in your business plan take it out. A well-written 5-page business plan is worth a lot more than a 15-page mess.

“Let Every Word, Sentence and Paragraph add value to your plan”

Investors and lenders are usually very busy people. Show them that you appreciate their time and intelligence by writing in a clear, concise manner that is crisp and to the point.

MISTAKE #3 – Making a presentation that doesn’t match the plan

I have once had a guy come in to give a presentation for a start up business. In his presentation he said he needed $50,000 in seed capital. He then went on to give a great presentation about this new product and how profitable it would be to the investors and for the company. It was very impressive.

“Know your business and know your plan”

A few hours later I was reading through the plan and what he actually needed was $375,000 to get he plan off the ground. The number was so different that it couldn’t have been a mistake. I don’t know what he was thinking but it totally ruined his credibility with all of us.

TIP: Know what’s in your plan and make sure what you are saying matches what are in your plan.

MISTAKE #2 – Leaving out information that is damaging about yourself, your company or your market.

If you’re attempting to obtain capital from outside investors then you can expect them to do, at a minimum, a background check on you, your company and do some comparative analysis of your market. There are always going to be additional questions about your assumptions, your market or questions about you, but the worse thing you can do is purposely fail to disclose something that is potentially damaging.

“Be totally open and honest about everything”

Hiding bad credit, a bankruptcy, a criminal record or anything is just as bad as being caught in a lie because it destroys your credibility more than if you would be honest about it up front.

TIP: If you have something damaging to disclose make it a part of your presentation and get the facts out the way and how you have handled it. Make it a non-issue.

MISTAKE #1 – Editing

If three people haven’t seen your business plan and presentation before you give it to a lender or investor then you are asking for trouble. I am very careful about the plans I write for others and myself. Even after I have spent hours or days checking and rechecking a plan, I ask a couple of people who I trust to look at it and check it for spelling errors, tone and making sure everything matches.

“There are no second chances to make a first impression”

Once an investor gets your plan it’s too late to go back and say that “too” was suppose to be “to” or the $123.00 was suppose to be $1230.00. One mistake might not hurt you too much, but if you have enough of them the investor will probably think you lack an attention to detail.

TIP: Pay to have a professional proofreader or editor look at your plan. If you’re applying for any amount of money it will be money well spent.

There are of course many more mistakes that a business plan writer can and do make when creating a business plan. But at lease you can make sure your plans do not have these mistakes.

These days most experts will advise you to create a business plan before you decide to take the risks that are associated with starting a business. A laundromat is typically a little more complicated than other small business models so the need for research, planning and a clear direction are even more essential for entrepreneurs entering the coin operated laundry industry.

A laundromat business plan will help you to prove to yourself that your ideas are viable. With a plan in place you will be able to set clear goals and map out a path towards achieving them in an organized manner. A sound business plan may become essential if you have to show it to financiers or investors prior to getting the startup funds that you need. Lastly it will help you to be more realistic and to ask yourself some tough questions about your ideas.

In this article we have set out a sample laundromat business plan layout. We have set out some examples of titles and content that you might consider using. Feel free to use it as a template as you proceed to put your own plan together.

Cover Letter

Your plan should be set out neatly in a folder with a cover that outlines what the report is about and who contributed to it. It is likely that many different parties will read your plan so you may consider attaching a cover letter to each one that addresses the reader specifically, highlighting the concerns that they will have.

Contents Page

If the plan is any longer than a couple of pages you should include a table of contents. This includes a list of all headings and sub-headings together with a page reference so that the information can be located quickly by the reader.

Executive Summary

An executive summary is a simple introduction to the report. Give the reader a brief introduction to your business plan and summarize each of the sections in the plan.

Mission Statement

While not essential, some businesses like to set out a mission statement which outlines their purpose or business philosophy. It usually covers non-financial motives. For a laundromat you might say that you strive to provide the best service to your customers or that you want to provide a clean, safe and efficient way for them to do their laundry. Your mission should be to do your best for the customer and to be better than your competitors.

Background

Provide readers with some background information on yourself and any other individuals who are involved with the proposed laundromat. Readers may want to know what your qualifications are and if you have had any experience in business or in the coin laundry industry.

Provide a background on the local coin laundry industry so that readers get a better understanding of the opportunities that are available.

If your planning has been in progress for a while then you might want to update the reader on what stage you are at. If you are considering purchasing an existing laundromat then you will want to outline the history of the business in this section too.

Business Description

Offer readers a basic description of the proposed coin laundry business. When will your new unit open for business? Where will it be located? Will you have an attendant on-site at the laundromat all day or only part-time?

Goals and Targets

Set out a list of realistic targets that you want to achieve with the business in the first year or two. Such targets could be financial and relate to gross or net profits on a monthly basis. They could also be related to other metrics such as membership numbers or customer satisfaction rates. Thinking longer term you may also set goals to expand into new locations.

Startup Requirements

Before you can launch your new laundromat business you must know exactly what you are going to need and how much it will cost. Costs will include everything from equipment purchases, renovations and marketing along with professional fees and compliance costs.

Once you have listed everything out you can then work out the total startup cost. From here you can mention some of the options that you have for funding the laundromat. Mention how much you will be able to contribute yourself and how much external funding you will require.

Products and Services

Go through the services that you plan on offering to customers. As well as a basic machine laundry service with washers and dryers you may also offer more upmarket services like ironing or dry cleaning. Make a note of the products that will be vended onsite. Obviously you will sell washing related products like soap powder and fabric softener but you may also offer non-related products like coffee and soda.

Market Analysis

As a prerequisite to writing a plan you should have done at least a little market research around the area where you propose to open your coin laundry. You can present your findings in this section of the plan.

In your research you should attempt to discover if there is sufficient demand for a laundromat in the area in question and if so, exactly what kind of services the people within this target market want.

You also need to consider the competition that you have in the local area. Produce a map that shows your customer catchment area bearing in mind that customers will usually go to the laundromat that is more convenient for them to get to. Look at the strengths and weaknesses of your competitors. Is it going to be possible to pull customers from the catchment area of competing laundromats? Can you make your service that much more attractive than theirs?

Marketing Plan

Set out a plan to bring new customers into your laundromat and to convert them into regulars. The marketing component of your plan should cover everything from the development of your brand, pricing, advertising, other marketing methods and customer service.

Remember that in the laundromat business you will be relying on building long term relationships with regular customers. You not only need to focus on bringing in new customers but you also have to focus on satisfying and ‘over delivering’ to your existing customer base. If you retain your customers and please them then you will also benefit by referrals and ‘word of mouth’.

Business Operations

Set out a plan for the daily operation of your laundromat. Make a note of the equipment that you will have in place and how the demands for water and energy will be met. Mention how you plan on maintaining the machines.

Discuss your daily staff requirements. What role will you, as the owner take in the daily running of the laundromat? How many employees will you need and what will their responsibilities be?

What other systems will you have in place to ensure that the laundromat runs smoothly on a daily basis and that you can control and manage the business efficiently. Will you have a computer system to keep track of stock and cash flows? What about a security system?

Financial Analysis

Lastly, but most importantly, a sound business plan will include detailed financial forecasts over a period of two to three years. This data is best displayed in spreadsheets so that you can set up a column for each month. Some businesses include more than one spreadsheet to allow for different situations. You may consider including one as a best case scenario and others that show revenue growing at a slower rate than is expected.

Try to identify a break even point where the business would basically be running without making a profit, but without losing money at the same time. Then you will have an idea of the customer volume that you will have to aim for. To calculate break even point you need to assume an average customer spend per visit and then calculate the number of customer visits needed on a monthly basis.

If you are borrowing money to start the business you should also include a repayment schedule to show how fast the loan will be paid back.

Appendix

Many assumptions are made in business plans so it is important to be able to give reasons as to why you made such assumptions. Rather than guessing you should try to include data that backs up your theories. Include an appendix at the end of your plan that includes all supporting materials that don’t fit conveniently into the pages of the report. These could include maps, pictures, spreadsheets, tables and lists of references and sources to name just a few examples.