Whether you want to attract investors or start a new business, a business plan is a critical tool that each business must have. But how is a business plan written? Below is a handy guide to help you craft a winning business plan to help you achieve your objectives. According to the US Small Business Administration, a business plan should include the following.
Executive summary: Regardless of the business format you opt for, it’s prudent if you give a snapshot of your business. This section provides an in-depth overview of why your business will succeed, mission, product offering, location, and the employees’ profile. Include relevant financial information and describe how the financial assistance you are seeking will support the growth plan.
Company description: Provide detailed information about your business and how it provides solutions to real-life problems. Provide details of your target customers, strengths, and opportunities for your business, and what sets your company apart from rivals.
Market analysis: What’s the outlook for the industry you operate? What are the strengths and weaknesses of your competitors? What are the opportunities available for your business? What motivates your target customers? Conduct a comprehensive market scan to provide answers to these critical questions.
Organization structure: What’s the legal identity of your business? Is it a sole proprietorship, partnership, or a limited company? Furthermore, provide information about the management team of your business. Elaborate on how corporate governance is observed. With the help of an organization structure, illustrate the management team, their qualifications, and responsibilities.
Product offering: Describe what services or products your business offers. Explain the benefits that customers derive from consuming your products. Illustrate the R&D being conducted to improve your products. Additionally, describe the steps you take to safeguard intellectual property.
Marketing strategy: How do you intend to woe and retain the market? Is your marketing strategy flexible enough to adapt to the dynamic customer patterns? Elaborate on how your sales strategy will help you achieve your financial goals.
Funding request: If your business plan goal is to attract funding, indicate how much funds you need in the next three to five years. Explain how the funds will be used and specify the form you want the funding (debt or equity?).
Financial projections: How will your business financials look like in the next five years? With the help of current financial information, paint a financial picture of the future. The aim is to show that your business is destined for success.
While a business plan is an essential document, business owners shouldn’t be bogged into it by spending donkey years in preparing the document. Spending too much on your business plan may cost your business optimal moments to find suitable investors.