Business plans have been critical documents for businesses in the yesteryears. It has not lost its sheen even today, and in this digital age, it is still a must for many scenarios and for some good reasons. Every startup company needs a business plan; whether it is to provide direction or attract business investors it plays a crucial role in the success of your organization. Before investigating the best way to craft a business plan and spending hours and money or delegate someone to prepare one for you it is important for you to understand why you need the business plan in the first place.
A business plan can be considered as a document that sets out a business’s future objectives and lays down the strategies for achieving them. Generally, a business plan includes:
- An executive summary which gives a snapshot of your business.
- Company description that describes what your company is into
- The market analysis provides information about the research on your industry, market, and competitors.
- Organization and management which gives the insight of your business and management structure.
- Service or products which explain the service or the products that you are offering.
How to Write a Perfect Business Plan
- Research and analyze your product – Before you commission a business plan, analyze your product, your market, and your expertise. Spend a lot of time researching, evaluating, your product, your competitors and the market intimately. Knowing everything about your business is your responsibility. Learn as much as you can about your industry and gather as much information as you can.
- Determine the purpose of your plan – As business plan describes the nature of the business, sales and marketing strategy and financial background and provides a road map that provides directions so a business can plan its future and helps it avoid bumps in the road you first should analyze the purpose of your plan. If you are making a business plan to attract your plan needs to be written in a way that it targets the investors, in such cases your plan should be concise and clear.
- Create your company profile – Your profile should include the history of the organization, what products or services you offer, your target market and audience, your resources, and how you are going to solve problems and what makes your business unique.
- Document all the aspect of your business – Investors will like to know if your business will make them money. For this reason an investor will like to know everything about your business. To help with this process, you should document everything from your expenses, cash flow, and industry projections. If you have any licensing agreements you should include them also.
- Have a strategic marketing plan – Your business plan should include a strategic marketing plan and include marketing objectives like introducing new products, extending or expanding the market, boosting sales and areas from where you can get new business, entering into long term contracts with your desirable clients, how to increase the ROI etc. Your marketing objectives should have several goals and tactics for achieving the goals.
- Customize it for your audience – Just like one size does not fit all, you need to adapt the business plan based on who’s reading it. For example, if you are submitting the business plan to small business investors, they might be interested in financial projections, whereas, large-cap investors might place more emphasis on your product, service and marketing plan.
Keeping these tips in mind you can now start putting your business plan together.
Steps to Writing a Standard Business Plan
A business plan can consist of 8 important sections. If you are writing a business plan for the first time then it will be convenient for you to move through each section, one at a time. here are the core sections that are generally included in a business plan:
1. Executive summary:
This is the first chapter or the prologue of your business plan. This is also the first step to create an impression in the mind of the investors. The executive summary does not need to be more than one or two pages in length. Although this section is shorter compared to the other section, it does not lose its importance, in fact, this might be the most important part of your business plan. In some cases investors might only ask for the executive summary while deciding whether to invest in your business, so you need to provide an executive summary which holds the value and stands out.
Your executive summary should be short and to the point. You may consider including information related to your mission statement, a concise company information, highlights of your business where you can include charts and graphs depicting the growth of your business since you started, products and services, financial information where you can include your funding goals or the names of the banks and lenders you have worked with previously and future plans which will give an idea where you wish to take your business in the future.
2. Company Overview:
This is the second section of your business plan. Although it finds sound similar to the executive summary, in this section you should write a top-level look into the structure of your business. You can start your company overview with a few sentences describing the objectives of your business, what your business does etc. This is the section where you can use your elevator pitch and this part should give investors a general idea of your business. Explain the nature of industry and market place that your business services. What are the areas and needs that your business caters to!
3. Market Analysis:
The next core section in your business plan is to perform a comprehensive analysis of your industry, market and competitors. You may include the sections like:
- Industry description: Here you can give your readers an idea as to how big the industry is and how it has grown in the past. The predictions and trends and the important players in your industry.
- Synopsis of the target market: If you are aware of the target market you may let your readers know about the group of people to whom you want to sell your products or services. Your target market can be defined using parameters that may include demographic, geographical, behavioral or psychographic factors.
- The size of the target market and areas of growth: You can include information about how big your target market might be and can also give an indication of the projected growth of your market.
- Your market share potential: Mention how many shares do you expect to gain in your targeted geographical area.
- Barriers: Include any barriers to market entry you might come across.
- Competitive research: Try to mention your top competitors. Look at their market share strengths and weaknesses.
4. Inform about your business organization:
Include your organization and management structure. Mention about the background of your team members. Write about the background of the board of directors, owners, and the ownership structure.
5. Marketing and Sales plan:
You should mention how you will sell your product or services. Include details about the promotion, positioning, selling strategy, sales force, etc.
6. Financial Plans and projection:
This section will give details about the financial plan and projection of your business. It will give a look into the current state of your finances, and where you would like to be in the future financially. Include the following like Income statements, Cash flow statements, Balance sheets, Statement of debt obligations, accounts receivables, payables, etc.
This will include all the supporting information which you might not have provided in the gist of your document. You can include footnotes, charts, or a table of contents that will break down the sections of your business plan.
Take some time and do some brainstorming before writing a business plan. You can take the help of templates that are available online. Dive right in and gather all the information that you might need to create a business plan that will help you to find investors.
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