How to Create a Business Plan
A business plan is a documented description of your goals and plans for the future of your business. Creating a quality business plan will help guide you through your venture and meet the financial goals you desire. Although many companies and business owners understand the importance of having a clear demonstration of their business intentions, many fall flat at creating an effective plan to push their business forwards.
A business plan is undeniably one of the most important tools for the success of any business venture, helping you keep on track and approach potential investors. This post will explore the crucial elements that form a business plan and how this can help you achieve your entrepreneurial goals.
Market research
There’s absolutely no point in starting your business plan without carrying out the necessary research needed to decipher your potential markets. The internet is at your fingertips and will serve as a fantastic method to scope out competitors and prospective customers, as well as speaking to the public about your product or service face to face. Consider the value of reaching out to mentors as well, their experience can be invaluable research.
Basically, you need to discover whether people will actually part with their hard earned cash to purchase your product or service.
With your ear to the ground and market research being a consistent part of running your business, you could even be one of those SMEs that could break into an international market.
Executive summary
Initially, you should outline the crucial elements of the business plan and inform the reader of exactly what you want and how you hope to achieve it. An important section for any reader or potential investor to learn more about your business and discover where you currently stand and where you hope to be.
Business description
Providing a description of your company and the originality of your business idea will not only serve as a crucial reminder of your policies and ambitions, it will also demonstrate a clear picture for potential investors. If you’re in need of investment at any stage of your business journey, potential investors will want to know exactly what your business entails and ultimately how it will make them money if they lend to you.
Product description and USP
Providing a description of your company and the originality of your business idea will not only serve as a crucial reminder of your policies and ambitions, it will also demonstrate a clear picture for potential investors. If you’re in need of investment at any stage of your business journey, potential investors will want to know exactly what your business entails and ultimately how it will make them money if they lend to you.
Operations and management
To better inform the reader of how your business currently functions or will function, you need to discuss your management team and what they bring to the business. Highlighting the various responsibilities and the skills your employees possess will help the potential investor feel confident you have a competent team that will drive the business forwards.
Marketing Plans
Connecting the dots between a business plan and implementing it into actionable marketing campaigns can often pose a challenge for entrepreneurs.
Consider how you will advertise and promote your business, and what you will say to convince your customers that they should buy from you. Contemplate where you will advertise in order to engage your target market – the local newspaper, social media, SEO plans, affiliate marketing, or a content marketing plan, and consider your unique selling point when engaging through your ideal platforms.
It is not at all uncommon that a business plan fails to identify exactly how the product or service will be delivered to the customer and entice them to make a purchase.
Strengths and potential risks
Not only will you need to highlight the strengths of your company and sell your business idea, you will also need to show you are realistic about the possible challenges you might face along the way. Be sure to demonstrate your extensive knowledge and pinpoint the potential power your business can hold in the future. Possible investors need to be able to calculate if there are any benefits to them and if your strengths will successfully outweigh your weaknesses.
Financial plan
This last step is one of the most essential components of your business plan. This allows you to set financial goals and discover whether your targets have been met, while presenting clear and realistic figures to convince others to invest in your venture. It is imperative that your financial figures and forecasts are exceptionally honest and clear to secure any kind of funding. Investors will want to understand your start-up costs, overheads and working capital in detail before considering giving you the time of day.
Of course your initial business plan is not set in stone and can always be updated as the business develops and transforms. In fact, this is highly expected as markets and circumstances can change on a yearly basis. What is important to take away from this post, is the undeniable value of having an accomplished business plan to guide you through your business venture and successfully meet the goals you expect from yourself.
Now whether you are at the very start of your business or currently in its development growth stage, what exactly are the sections to include in your Business Plan? The Formations Company has put together a guide to a Business Plan’s ten distinct sections to put everything from research to finance on paper.