How to Write a Metals Business Plan

If you’re considering starting a metals business, the most crucial step toward formally organizing it is establishing a solid business plan. The difference between locating a desirable source of venture capital and an unending string of rejections can come down to how well you’ve prepared your metals business plan.

Your business plan will not only become the first formal map of your strategy to succeed, but also your primary sales tool for potential investors and partners. Let’s analyze the successful components of a metals business plan and get you on your way to hearing your first “Yes!” from investors.

Format

The U.S. Small Business Administration recommends the following sections be included in every successful business plan. Their business plan site has a thorough explanation of the expected contents of each of these sections.

• Executive Summary: The quick and dirty snapshot of your business’s background and your plan to succeed. First impressions are important, so make this section your primary selling tool. Write this after you write the rest of your plan to stay organized.


• Market Analysis: Evaluate the market environment you wish to enter. By demonstrating knowledge of your competition and market demands, you’ll appear prepared to handle the real world, not just an ideal scenario.


• Company Description: Explain the components of your business and how they work together to make money. Highlight what makes your model unique.


• Organization and Management: Lay out the top-to-bottom structure of your company and emphasize key competencies of the leadership. Use this chance to prove that you have the right people at the corporate helm to succeed.


• Marketing and Sales Management: Demonstrate how you will find customers and keep them. This should also include your plan to sustainably grow the business.


• Service or Product Line: Go into full detail about your product or service and how it fills unrealized market needs explained in your market analysis. The better you demonstrate the boundaries of your business, the more focused you’ll appear.


• Funding Request: It’s time to ask for the money. Carefully break down how much funding you need, and over what timeframe, in order to successfully realize all of the preceding plans. Make sure you explain where all of the money will go.


• Financials: Use this section to assure your future creditors of your ability to handle a business. This includes financial data on previous businesses you’ve owned, your current financial status and how you expect the company to perform in the future.


• Appendix: Upon request, submit this section of more sensitive details to interested parties. Some of this information is private and only important to certain readers.

Remember that potential investors may have seen hundreds of business plans, so they will know if you’re missing a critical piece of your strategy. If their concerns are not fully addressed in the business plan, they’ll assume you haven’t considered them all, potentially making you look like a risky investment.

Common Mistakes

Even if you’ve followed good formatting guidelines, there are some common mistakes made in business plans that can undermine your efforts. In addition to the ones explained at the previous link, potential holes in your plan can also include:

• Unclear explanation of revenue and profit sources.
• Not describing the necessary well-rounded partnership.
• Lack of focus on the consumer as the company’s driver.
• Not following a clear format.

Other Details to Consider

A successful metals business should include personnel with a materials science or metallurgy background. It may not be necessary for a scrap yard to have a staff of degreed metallurgists on tap, but a metals service center should plan to hire metallurgical expertise with contacts in the industry.

It’s always best to know the extent of services you intend on providing, but it can make a big difference when dealing with bulky, valuable metals. For example, if you are trying to open a recycling facility, will you offer scrap retrieval services? If so, you’ll have to consider whether those services includes demolition capabilities, how you will safely sort and choose valuable scrap, and the logistics of transportation.

In some metals businesses, nothing can be more important than facility security. A precious metals retail business, for example, will require security guards, professional anti-theft solutions and careful delivery arrangements to guard valuable gold and silver holdings.

"Lost source accidents" of radioactive material occasionally mix dangerous radiation sources into seemingly harmless piles of scrap metal. Scrap metals can be very dangerous and employee insurance isn’t getting any cheaper, so radiation safety must be clearly addressed if your business will deal with scrap.