Thousands of entrepreneurs often ask this question, “why should I write a business plan when it’s just a small business?” Most of them rarely see any reason to create it until they are forced to put one together when the need arises. A business plan is an important ingredient of a successful business and it serves as a roadmap. It can also go a long way in discovering hidden flaws, obstacles and opportunities before launching or expanding a business. The stage or size of a business doesn’t matter when writing a plan. Although there isn’t a one size fit all business plan model, it can be tailored to fit the purpose for which it is being written.
Check out the important elements of a foolproof business plan.
The executive summary usually appears first in a business plan as it gives a short introduction about the company. This important aspect must be well written in order to keep the readers interested. It contains the mission statement, main objectives of establishing the business, products or services and a basic financial information. It should be written last and must not exceed two pages.
The purpose of this section is to present a brief description of the company. Information such as the vision statement, legal structure, ownership and management structure, and how the products or services will be introduced into the market shouldn’t be left out. In addition, details of the company’s past, present state and future possibilities are required.
The aim of market analysis is to carry out research on the various markets and their sizes, analyze them and determine the market where the products and services will be finally introduced. It is crucial to research thoroughly before writing the plan. This also involves identifying your target customers and how your products or services will satisfy their needs.
The marketing strategy section deals with different marketing tactics plans like social media, online advertising or print media with the estimated costs for each. Furthermore, details of how customers will be attracted to buy the products or services and future expansion plans are an integral part of a marketing strategy plan. It must be frequently reviewed because marketing trends are always evolving.
There are many risks and opportunities associated with each industry. A proper research prior writing the business plan can help in identifying both. Trends affecting the industry, growth pattern, how your brand will optimize its opportunities and overcome obstacles before the products or services enter the marketplace must be clearly shown.
Studying your competitors has so many benefits that include assisting you to position your brand better. Important details such as your competitors, their products, pricing details with their strengths and weaknesses usually make up this section. You should be able come up with how your company is poised to use your competitors’ strengths and take advantage of their weaknesses.
Truth be told, a business can’t exist without this plan. It provides information to direct people working in the organization on how the business will be run, strategies for each operation and steps for accomplishing the goals. Other additional information are the bios, titles, qualifications, duties and roles of your ownership and management team. Apart from this, there should also be a description on how team members will be promoted and compensated.
The financial plan is a crucial aspect that must be handled carefully. When looking for funds, investors often request for at least three years of projected financial statements with features like the balance sheets, monthly cash flow statements and credit history. Some will even ask for up to five years of financial statements or more. All financial history, the present condition and where the business is heading to in terms of finances are expected to be backed up by accurate data.
Adding graphics, bar charts, pie charts and tables to the business plan will make it easier to comprehend and appear more appealing. After writing the plan, it must be reviewed several times. A professional may be hired so that the final business plan is as perfect as possible.
There have been people who consider business plans as not working and do not consider it. True, businesses rarely ever go according to business pan. It is however an important tool to guide the running and growth of your business.
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