How to write a business plan to start your own new company?
If you are one of the many people thinking about starting a small business, having a business plan is one of the first things you should have on your list of things to do. It does not matter if the size of the business you are starting is small or big, having a plan for your business is considered a blueprint for a successful small business. Writing a business plan is possibly the hardest part of the business process. A business plan sprouts from a business idea. Once you have developed an idea of the business, it’s market trends and growth opportunities, the method of developing a business plan should follow easily.
In this article, let’s see some of the major points to ponder while creating a business plan.
Usually, a traditional business plan consists of the following elements:
- Executive Summary
- Company description
- Market research and analysis
- Description of products/services
- Operational Strategy
- Marketing and sales strategy
This is the most important and critical part of your plan and will be a short outline of the content of the entire business plan. If you are planning to raise your business plan to venture capitalists, banks or potential investors, make sure that your executive summary captures their attention urges them to read on beyond the first page. The executive summary is usually given to potential financial backers, board members and other interested parties for review. The executive summary should be developed in such a way that it makes the job of reading easier for the responsible person.
What points are to be covered in an executive summary?
- The vision and mission statements of your company
- Your product or service and the problems solved by your company
- A short description of your target market
- Your purpose in writing a business plan
- The size, scale, margins or sales forecasts of your company
If you are a beginner, you might have to rewrite the executive summary several times at the end of the business plan development.
The company description is simply an overview of your company. This section of your plan should include:
- The official name of your company
- Company location
- Business structure
- Ownership or management
- Company background
- Company description
- The mission statement of your company
- Product and market information
- Goals and objectives of your company
Market research and analysis:
Utilize graphs and charts to highlight the precise market analysis. Both present and future trends need to be discussed and the method of capitalization of your organization on those trends also needs to be mentioned. Also, do competitive analysis and try categorizing your competitors. Once this is done identify the products, strategies, advantages and disadvantages of your competitors and bring out methods and plans to improve the performance of your company.
SWOT Analysis which includes Strengths, Weaknesses, Opportunities and Threats can also be performed in this stage.
Description of products/services
Businesses can take many forms and may deliver either product, services or a combination of the two. Provide a detailed explanation of the products or services offered through your business.
This is the section of your business plan where you explain in detail the goals, objectives, procedures and timeline of your company. Some of the factors to be included in this section include Cash Flow forecasting, variance report, weekly position report, management settings, executive review, team operating plan, organization structure, a delegation of authorities, hiring procedure, employee compensation, profit-based incentive system, performance evaluation etc.
Marketing and sales strategy
Sales planning is critical to sales success. Return on Time Invested(ROTI) should be the key criteria that every salesperson should consider while evaluating their account base.
Four things to consider while preparing your marketing and sales strategy:
- Know your customers
- Know the market
- Know your sales performance
- Know your target objectives
The finance section is a very short section that deals only with your break-even point, financial strategies etc. It will be just a page long. A finance part that is vaguely developed honestly creates a poor impression on the reader. To avoid this it is necessary to create a well crafted financial plan considering the below-mentioned points.
Balance sheet, cash flow statement, tax impacts, income statement, startup costs, operational costs, cash inflow and periodic review of your budget versus actual expenses.
So, the final question is do you really need a business plan?
Well, the answer is Yes and the following are reasons that showcase its importance:
Visit Finline for a creating a perfect business plan for your business.