What’s a Business Plan?
A business plan is an elaborate document written to evaluate all the economic aspects of a venture including its description, viability, and analysis. Regardless of the company size, you need to prepare this document. Even though it does not guarantee business success, it helps maintain a clear assessment and provides a roadmap that can lead to business success.
It is time you roll up your sleeves and put the plan on paper. Creating the plan for your business is an essential step for every entrepreneur, both small and large. This is often skipped, but plays a significant role in business success. The following stages show what you need to include in the document.
1. Executive Summary
This section outlines the business strategy and comes immediately after the title page. This part tells the reader what your intentions are in a summary format. State in clear terms what you want at the beginning.
2. Business Description
This section begins with a short description of the industry you operate or intend to operate. Include the present industry outlook and the future possibilities. Ensure to provide all relevant information on the markets within this industry, and new product developments indicating how it will affect your business.
3. Marketing Strategies
After a thorough marketing analysis, you should include this section to show how well you as the entrepreneur is familiar with every aspect of the market you intend to operate in. It illustrates how you define the market and how you plan to position the company to capture a significant market share.
4. Competitive Analysis
Every business should be aware of the strengths and weaknesses of the competitors around them. This section outlines these strengths, weaknesses, and the strategies to position the company to build a competitive advantage. It also includes the barriers you intend to create to prevent the entry of competitors into your market. Remember to include all the weaknesses you can exploit in the product development cycle.
5. Design and Development Plan
In this section, you should provide the prospective investors with a description of the product design and the context of its production, and marketing. Create a budget for the development to enable the business reach its goals.
6. Management Plan
The purpose of this section is to describe how the company will operate and be managed at every functional level on an ongoing basis. Outline the logistics, the various responsibilities and task assignment within the enterprise. Include the capital and expense requirements for the operations.
7. Financial Plan
At the end of the business plan, you need to table the financials. This includes all the plans for the company ranging from capital investments to recurrent operational expenses you intend to incur in the first year or so of the enterprise.
Essential components of a business plan
- A sound business concept. You need to begin with the right business by working with someone who understands the business you intend to get into. Many people do realize when it is too late that the concepts in the plan have a huge difference with realities on the ground.
- Understand your market. The best way to understand the market you want to operate in is by carrying out test marketing of your product or service before you go too far.
- A growing and stable industry. The industry you plan to raise funds for should be one that has the potentials to make profits in the short term and not some great invention that may take years to make marketable.
- Capable management. The people you intend to work with in the business should be those with excellent skills, ethical values, and are smarter than you are.
- Detailed and comprehensive financial plan that covers all the aspects of the business.
What to do after writing the plan
- Regularly review the document as the business progresses and faces various challenges. The strategies will always evolve depending on business growth and changes in the business environment. This will help you focus on your business goals.
- Distribute the plan to the right people without letting your competitors see it. It is the business blueprint charting the direction to take, therefore when you and the stakeholders understand it; your plans will have a better chance of succeeding.
- Protect the plan by having third parties sign a non-disclosure agreement. This will keep those you share it with from disclosing the details of the plan.