Not all business ideas have the potential of becoming a success in the future. Of course, many people have business ideas but the big question is do they have what it takes to survive in this fiercely competitive global marketplace?
That’s the more reason why, if you have a unique business idea, it’s helpful to create a business plan to guide you.
What is A Business Plan?
Basically, a business plan is a roadmap that outlines the details of your business and how you intend to achieve your goals. It comprises products or services your business is bringing to the marketplace, competitive market analysis, organizational structure, what funding you’ll need and what your financial projections are.
Simply put, a business plan is a great way to determine whether or not your business idea will have headway on startup. It clearly outlines what sets your business apart from competitors.
Tips for Creating a Business Plan
There are several helpful tips for creating a business plan. These include
List out what sets you apart
Prior to drafting a business plan, you need to do a thorough research about your competitors to see where in lay their weakness. You can capitalize on their weakness, resulting in a more superior service. If you are planning to venture into the cosmetic business, for instance, then you need to state what makes your outfit different from other cosmetic stores already in the market
What makes your outfit unique? Do you have a specific loyalty program for your clients? Why should they patronize you? Do you have a plan for charitable services? If yes, what percentage of your proceeds goes to charity?
Keep in mind that you’re not just promoting your products or services but also your brand. Sit down, strategize, plan, re-strategize and do a thorough research work.
Unlike in the past, modern business plans are short, concise and straight to the point. While you might want to include results of your market research, narrow it down to the products and/or services you plan to offer, and outline your marketing strategy.
You don’t need to add every detail in your business plan. Flesh out the most important aspect of the business idea only. Every other detail can be kept in a separate file for future use. An ambiguous business plan may put off the reader or potential investors. So learn to be concise and precise.
Your business plan should be properly formatted for an easy read. Proper formatting will keep readers glued to your plan. Use perfect headers and bullet points where necessary. Also, highlight or write in bold letters key terms you want the reader to take away.
Update your business plan regularly
Remember that your business plan will be there with you every step of the way. It is a living document that needs to be updated regularly to meet your business objectives. For instance, you might probably add a few things if you’d like to request for a new round of funding for a specific project.
Why You Need a Business Plan
To keep your business hope alive, planning is indispensable. By now, you’re headstrong about a business idea and you’re willing to do whatever it takes to bring it to reality. But definitely, there will be challenges and difficulties. And at that point, your innermost strength will be put to test here. You’re faced with two decisions: quit or forge ahead.
Well, there are few things that can give you a breakthrough at this point – proper planning and undying commitment. Fact is the two works hand in hand. The later of the two will be based on your decisions and outlook. While planning, on the other hand, is an indispensable asset that provides the much-needed support to weather the storm ahead. One of the reasons for drafting a business plan is to seek financial support. Besides that, a well-written business plan will also act as a guide from concept to planning to actualization.
Here are some of the reasons why you must draft a business plan
- The thorough research work will bring new ideas on how to be more creative and unique in order to outdo your competitors
- A business plan will let you discover and fix the loopholes in your ideas
- It provides a unique approach to guarantee customer satisfaction
- Makes everyone on the teamwork in one accord – to achieve a specific goal
- Increases your chance of getting the much needed financial support from investors
Business Plan Format Guide
Any information you include in your business plan should be realistic, honest and factual. Back up any assumptions with proof of evidence, if there is a need for that. Depending on how standard and articulate your business plan is, potential investors including friends and financial institutions might find interest in funding your business. Furthermore, potential partners and grant providers will be interested in working with you once they see how much of a weight your business plan carries.
Research has proven that drafting a business plan, no matter how small, will go a long way in contributing to the success of your ventures. When it comes to a comprehensive business plan format, there are few basic elements that it should cover. These include
- Executive summary
- Company description
- Market analysis
- Market strategy
- Management team
- Marketing plan
- Operational plan
- Financial plan
Prior to writing your business plan, you must first do a thorough market research. This is important regardless of whether you have previous experience in the industry. There are several ways to do your research. The easiest and perhaps the most popular is the internet. Other ways include industry experts, existing competitors and so on. The market research will give you a perfect understanding of how the market operates.
Every section in the business plan format is interwoven, so none can be written in isolation. They all need each other. Furthermore, each section should be written by professionals who have a perfect understanding of the business.
In case you don’t have a budget for professional business plan writing service, you can write it yourself. This gives you an edge as you have much idea about the business. Another benefit of writing a business plan yourself is that you could identify specific challenges and find lasting solutions to them. And when meeting with potential investors or grant providers you’ll find it less difficult to explain the plan in detail.
Of all the sections, the financial plan proves to be most challenging particularly if you don’t have a financial background. At this stage, you need a professional but you need to make sure all the figures and stats are well spelt out.
Business Plan Format
1. Table of content
Though it’s among the first pages of the business plan, it should be the last thing you write. This will help guarantee that all page numbers are correctly written. Table of contents helps readers locate each section easily.
2. Executive summary
This is perhaps the most important part of the business plan format. The executive summary can make readers decide whether or not the business plan is worth the time. Just like the table of content, the executive summary should be written last. Basically, it’s a summary of the critical parts of the comprehensive business plan. Also, it should be no more than two pages.
Things to include
A brief summary of the business; its product and/or service and the market
- It should highlight financial features
- It should contain a general overview of the company as well as its management
- It should include details of how the business intends to achieve its business goals and objectives.
3. Company overview
This section provides a well-detailed overview of the business and what it will do. When writing this section, use only simple, concise and easy to understand language. Also, explain any industry terminologies in clear terms.
This section should include
- Name of the company
- The legal structure
- Business history, if any
- Business objectives
- Mission and vision statements
You don’t need to say much about the business in this section. Odds are you probably want to write as much information about your business as possible into this section, but you have more opportunities to delve into more details further on in the plan.
This section should focus on describing the market. Why is it a popular market? What kind of service are you offering? State in detail what opportunities exist in the industry and why it is so popular. To make your points more succinct use figures and statistics
This section also addresses the questions that pertain to target market, product distribution and marketing activities. Furthermore, it should explain how the business is going to make a profit.
5. Market analysis
This section should explain to the reader some of the insight from your previous research work. With the industry analysis, you should be more acquainted with every aspect of the market. By doing this, you can be able to define your target market.
Outline the forces that dictate the market operations. What are the factors that affect new entrants, how powerful are the customers and how competitive is the market?
Describe the market in which you will operate. This part should address issues such as total market size, market growth rate and market trends
6. Market Strategy
How will the business compete in your market of choice? Your positioning strategy will be determined by a wide range of variables including target market requirements as well as what your competitors are doing
Prior to positioning your business, you first need to understand the position of your competitors and what makes your product and/or service a standout. Does your product meet the most pressing needs of your customers? Of course, the research work you’ve done previously will provide answers to these questions. With that, you can develop a well crafted positioning that gives you an edge over your competitors. This part only indicates how you want your potential customers as well as your primary competitors to perceive your business.
7. Management and Staffing
At this point, you’ll give brief details about each individual involved in the business. A summary of the management team comes first in which you’ll list their area of expertise, previous experience, qualifications and their key role in the business.
This section also points out the specific skills and qualification requirements before any individual can appoint roles. An organizational chart will come in handy in this aspect. Also, you need to state different activities including training and recruitment that will have to take place to guarantee that you have only the best hand working with you.
8. Marketing and sales plan
This section talks more about promotional strategies. How do you intend promoting and marketing your brand? It is however impossible to achieve your business goals without a proper marketing strategy.
A detailed marketing and sales plan gives readers a clear idea that you know the right way to reach your target audience. At this point, you need to put on your thinking cap, outline the many different marketing strategies and choose the one that will deliver maximum result. Your primary objective is to sell your products. So how do you do that? The marketing and sales plan will provide readers with answers.
9. Operational plan
This section throws more light on the operational plan you have and those you anticipate. Some of the major considerations include:
Office space – Do you want to lease an office space or use a home-based office for a start? If you’re renting an office space, provide a breakdown of the liabilities and costs involved.
Equipment – List out all the equipment you’ll need for a start (both in the short and long run). How much does the equipment cost?
Licensing- Prior to running your business, you need to get a license. And for every business, there is a specific license. So explain the license peculiar to your business and how you intend obtaining it.
Insurance – Every business regardless of how big or small needs to be duly insured. This will give not only the business extra protection but also customers the peace of mind to do business with you. Explain the insurance policies that are best suited to your business and costs of policies.
Production – Describe what the business will do to fulfil orders or deliver it services.
10. Financial Plan
This section of the business plan comes last, but that doesn’t make it any less important than other sections. In fact, it is the backbone of the business plan. Basically, your financial projections should include an income statement, cash flow, profit and loss statement, break-even analysis and a balance sheet.
Potential investors usually take these projections seriously, so it’s important to put in more effort. If you don’t have an accounting background, contact a professional accountant to help with this section. The financial section indicates whether or not the business can be able to stand the test of time in the highly competitive global marketplace.
These are some of the important things to put in place when drafting a business plan. Do a thorough research and be realistic with all projections. Once done, review and proofread the business plan to check for any spelling or grammar error.