The life of starting up a business is a thrilling one but you need more than passion and hard work to bring your idea into to reality. A solid Business Plan template is one of the most important steps you are to make. This document will not only ensure that you are well-organized and focused but also it will give potential investors or lenders a roadmap of your business financial objectives and growth strategy.
You are starting a business or you want to revise your plan, then this is a step-by-step guide to create a business plan that would shine and pre-position you to success.
What is a Business Plan?
The business plan is a roadmap to your business. It details your companies objectives and how you or it will achieve them and how you will spend the money along the way.
On the inside, the business plan assists you in making sense of your vision, upgrading your business structure and makes sure you are heading in the right direction. Outside it may be a very useful tool in attracting potential investors or getting funding by lenders.
It is important to remember that business plans are living documents. They change as your business changes hence there is no need to be concerned that you have to update it later on. You may be in the very early stages or more of an experienced entrepreneur, but it is always a great time to revise your business plan when seeking a business loan or investment.
Step 1: Compose an Executive Summary
The first part of your business plan is the executive summary but is sometimes harder to write last. Imagine it is your elevator pitch–a summary of your business that makes the most significant points in a couple of brief paragraphs.
In this section, include:
- A mission statement which clearly states what your business is all about.
- A short description of your products or services.
- Your general overview of financial objectives and development.
The idea behind this is to create a hook to your reader and provide them with a perception of what your business has the potential to be.
Step 2: Describe Your Company
So, now, put your nose into your company. It is the part under which you will establish the foundation of your business.
Include:
- Name and address of your business, which is registered.
- The most important individuals in your company and their competencies and experience.
- The nature of your business (e.g. sole proprietorship, partnership, corporation), the distribution of ownership and the roles of each owner.
- A short history of your company and its development.
This part will assist the reader in knowing who and how about your business.
Step 3: Say What You Hope to Achieve in Business
What are your business objectives within next three to five years? Here is where you put down your perspective of what you want to grow into and how you intend to do it.
In need of financing or investment, tell us why:
- The way the funds will assist you to meet your goals.
- The actions you are going to do to achieve your targets.
Or, say you are going to introduce a new line of products, demonstrate how the investment will contribute to that growth and how it will spur sales to grow.
Step 4: Defining Your Products and Services
Here, give exact details about the products or services that your business deals. The more details you give the better.
Cover:
- The way your product or service functions.
- Your pricing model.
- The customers you are targeting.
- Your supply chain and order fulfillment strategy.
- Any intellectual property (e.g. trademarks, patents) that your product or service has to do with.
It is now your opportunity to point out what is unique about what you offer as compared to your competitors.
Step 5: Do Your Market Research
Investors and lenders would also be interested in what is the position of your product in the bigger market. It is here that you will demonstrate that you have an idea of competitive environment.
Carry out a market research to respond to:
- Who are your competitors and what do they do well?
- What is the difference between your product, and why will they prefer it to them?
In case you are targeting an underserved market, make sure to point that out.
Step 6: Map Your Marketing and Sales Strategies
In this case, you will be telling me about how you intend to get and keep customers. This section should cover:
- Your marketing (advertising, social media, etc.).
- Your selling strategies, such as your revenue generating methods.
- Your selling strategy or distribution expenses of the selling and delivery of your products or services.
A good marketing and sales strategy can be used to convince investors that your enterprise will yield steady income.
Step 7: Business Financial Analysis
The business plan includes one of the most crucial elements, your financial analysis. In the case you are starting out, you might not have much financial data, but in the case of an existing business, this section should contain:
- Profit and loss statements.
- A balance sheet of your assets and liabilities.
- A statement of cash flow, which describes how money enters and leaves your business.
Use them to work out key financial ratios such as:
- Net profit margin: The proportion of your revenue remaining as profit.
- Current ratio: This is a measurement of your liquidity and repayment capacity of debts.
- Accounts receivable turnover: How fast do you collect a months?
Charts or graphs can be included as these can enable investors to get a quick glimpse of the financial position of your business.
Step 8: Project Financially
This is the most crucial part in case you are applying to get funds. You will give estimates on sales, costs and profits in the three years to come assuming that you get the financing you are seeking.
It is all about accuracy and therefore you take time to study your previous financials and base your projections on sound information. Although you may have high ambitions, you should also have realistic goals supported by research.
Step 9: Overview How Your Company Works
Give a background of your business and how it is organized. Explain how various tasks e.g. production, sales and customer service are managed in your business.
Here one also gets a chance to bring into focus important team members and their credentials. In case some employees possess special experience or competencies, make sure to attach their resume to prove their benefit to your company.
Step 10: Include any other information in an appendix
Finally, appendix some additional information or supporting documents that were not able to be included in the main sections. This could include:
- Licenses or permits.
- Agreements or contracts at partnership.
- Machinery leases or bank statements.
- Any personal and business credit history information (when you want to be financed).
With a long appendix, the addition of a table of contents is advisable (so that the reader can locate the required information).
Business Plan Help and Resources
Be realistic in your sales estimates: Do not be over-optimistic. Imperfect projections are harmful to your reputation in front of prospective investors.
Editing: Typing mistakes and spelling mistakes may sound warning bells with investors. Think about employing a professional editor to make sure that your plan is refined.
Also take advantage of free resources: Organizations such as SCORE and the U.S. Small Business Administration (SBA) provide free materials and professional advice to assist you in developing a business plan that is memorable.
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