Planning is the foundation of any success. Business plans layout a road map for the future. Thus they require to be meticulously planned and help evaluate the viability of a business idea. A business plan sets up a predictive model for three to five years into the future: the better your plan, the more odds of a successful business. Moreover, a well-designed plan also helps gain financing from angel investors and venture capitalists.
Suppose you have no financial forecast, which is part of the business plan. In that case, it’s very difficult to show the bank how you are going to repay the loan,” says Craig Allen, a financial advisor. He teaches business plan writing classes at Southern New Hampshire University. The following is a comprehensive guide to creating a great business plan. Let’s take a look at each section of a typical business plan:
1. Executive Summary
The Executive Summary elaborates the company’s main goals and purpose. It can make or break a business plan. Think of it as a snapshot of your business plan, brief yet elaborative. It should give a brief description of the products, services rendered, ownership structure, etc. The executive summary should be crystal clear to you and especially the investors since it declares the purpose of your business’s inception.
2. Financial Analysis
Business is a game of numbers, isn’t it? Without numbers, it would be pointless. They are the sole indicators of a business’s success, thus paving the way for future investors and increasing the odds of exponential growth. To comprehend the numbers, you need sound financial knowledge to forecast the financial projections for your business plan, and what a better way to learn other than online education.
The pros of an online education program are far greater than any other education method out there. There is a surge in the availability of online courses, but the really good ones are elusive. Check out this Online General MBA Program, which will help you better comprehend the financial world and gain expertise in managing the financial area of your business brilliantly. It is a stellar course and a quick guide to the business world. Business plans should include at least five basic reports or projections:
- Balance Sheet
- Income Statement
- Cash Flow Statement
- Operating Budget
- Break-Even Analysis
3. Overview And Objectives
it provides an outlook of the services and the products that a specific business offers. You will have to articulate what your business aims to achieve with your mission statement. It should provide an overview of how you plan to offer or sell a particular service or product. It outlines the criteria for operating a firm and the target market for the products and services. More importantly, this section should explain how the business is determined to solve its problem.
4. Products and Services
It describes the products and services that the business will offer. However, it must be obvious how this company differs from its competitors and intends to provide the best service possible to ensure maximum client happiness. Patents, copyrights, and trademarks owned or applied for should be mentioned in this section. If the business is product-focused, you will need more time to describe those products. Use simple words for layman’s comprehension. If a new product or service is offered, explain its use and value for the readers’ easy business evaluation. Remember that products and services are the lifelines of the business. Research suggests that certain colors attract consumers for in-depth analysis.
5. Market Opportunities
For a business to be successful, market demand is necessary. Before starting a business, research customer demographics, spending habits, loyalty to a brand, etc. You can also Look for merchants and wholesalers already selling the product or service you want to offer in your area. Research the pricing, availability, demand, and hype of that product. You will need to finetune your competitive pricing to increase your odds of having a successful startup. Market your product through introductory pricing, which will spread the word across your target demographic area.
6. Sales and Marketing
Having wonderful products and services is awesome, but without marketing, these products and services will almost be non-existent. With the advent of social media, access to marketing has been given to the average user. With just a single click, your product can be marketed across various target areas and to thousands of internet and social media users, making it so convenient. It also makes online and social media presence crucial for a business, especially a startup business.
Multinational businesses and conglomerates spend billions of dollars on marketing which pays back tenfold. In this digital age, sales and marketing could be the ultimate tool in your arsenal to skyrocket your business. Just embrace this superpower and watch your revenues and profits surge! Here is a short read about the role of marketing in the success of a business.
The operations section defines how you will run your business. This key part of your business will describe your day-to-day business and workflow activities. It represents the ‘how’ part of your business. It is how you will manage the operations that will drive the revenues and profits of the business. Efficiency is the key here. The more efficient and smooth your operations are, the fewer hurdles and disruptions you will encounter. Consequently, you will experience more success and peace of mind. You can also think of operations as your business plan’s ‘implementation’ section.
8. Management Team
Employees are the workforce that makes up an organization or a business. The quality of the management team will impact the performance and output of the business. Consider hiring competitive, well-experienced, and who exhibit a positive attitude when things go south. Employees are valuable assets of an organization. To find out how crucial the role of managers is in the success of an organization, check out this awesome article.
The Appendix entails additional information that couldn’t fit elsewhere. These may be the contents:
- Resume of key employees
- Equipment leases
- Permits and Patents
- Receipts and Bank Statements
- Legal Agreements
Appendices are only necessary when you seek to attract investors’ potential investments. Suppose the information in the other business plan sections does not suffice. One feels the need to delve in further. In that case, the appendices might be the perfect place for them.
A great business plan will never work if it lacks execution. So no matter if your plan isn’t perfect, don’t be afraid to take the first step. Sometimes just a leap of faith sets off a favorable chain of events. Everything eventually starts to make sense, so my advice to you is this: believe in yourself, pray, and expect the best to get the best. Most importantly, find work that you are passionate about and enjoy because remember happiness and peace of mind are the most valuable assets in life.