A well-crafted business plan can put you on the road to success.
Not only is a business plan a prerequisite for investors and lenders, it is a road map for entrepreneurs and business owners to articulate their mission, goals and values, as well as to identify risks and opportunities in their market so they are well prepared.
A business plan is a critical part of preparation for entrepreneurs, starting or expanding and growing their own businesses, especially since few startups survive their first years.
A business plan is a serious business document and cannot simply list the thoughts and musings of the entrepreneur.
We prepared some useful elements to include in your business plan, for maximum impact and success.
The executive summary is considered the “elevator pitch” and provides a snapshot of your business plan.
The summary should, in brief, describe the problem you are going to solve and why the problem needs to be solved right now.
This is the most important part of your business plan, so make sure it stands out, as many people will stop reading if it is unimpressive.
While it appears first in the plan, it is usually written last, to summarise the contents of the plan.
Organisation and management
In this section, you outline the details of ownership, investors and provide an organisational chart.
Furthermore, specify the type of business you operate - sole proprietorship, private company, non-profit company, etc.
The entrepreneur should clearly demonstrate what they are bringing to this venture – the idea, the technical ability or the passion, so investors understand how you plan to use your personal strengths.
Make sure you focus on your background and experience, as well as those of your partners.
Furthermore, if the leadership team has a previous track record of building and delivering businesses, this should be highlighted.
Business plans serve many purposes, but one of them is to build trust, and the team is as important as the product to potential investors and partners.
If your business is already established, explain what your company does and how it is superior to competitors.
Make sure you include your competitive advantages (specialist services, professional employees or central location, etc.) as well as other details, such as when the business was started, how many employees you have and where your company is situated.
List your major customers as well as markets you plan to explore in future.
It is very important conduct considerable research to understand the market in which you plan to operate.
For a business plan to be effective and attractive to investors and partners, you must be able to provide tangible data and information that supports the notion that your demographic is strong and growing, and that market trends support the continued need for your service or product offering.
Find out who your competitors are, analyse what they do and research how your offering can be a game-changer in the industry.
Also make sure you know your customers, how they spend and when they make use of your offering.
This will help you plan for full-year profitability. If your business is limited to trading at certain times (such as Easter or Christmas or during holiday seasons), you will have to plan to have resources and cash flow for inactive periods.
Products and services
Detail the products and/or services you offer, how it will help your customers and how often a person is expected to need your offering.
This is critical to determine the sustainability of your business.
Also include patents and copyrights you own.
Marketing and sales
The plan should cover both sales and advertising strategies and costs, as well as customer acquisition costs.
Marketing is critical to let potential customers know what you offer.
Make sure your methods of marketing (such as word of mouth, promotions, discounts or advertising) are tailored to your market.
Consider digital marketing as an affordable means of reaching potential customers.
If you are looking for funding or investment, you have to outline how much money you require (start up capital, as well monthly, yearly or even extended needs) and how you will use it.
Make sure you include what the return on investment is for investors, when they can expect to see a return, and how you’ll repay borrowed money.
Make sure you provide realistic forecasts to show how you plan to generate cash flow.
If possible, show recent financial statements and base projections on those. This will give lenders and investors a realistic idea of your business and its financials.
Finally, make sure your business plan is easy to read and follow to keep readers engaged. Use various ways of presenting data, such as product shots, bullet points, photographs, graphs, charts and tables. Before you go public with your plan, have it reviewed by a trusted mentor or expert in your industry.