Are you interested in starting a business? Do you have a product or service that you would like to sell? The first step towards starting a successful business is writing a business plan. A well-crafted business is a critical step towards securing the funds to start your business and keeping your company on the road to success once it gets rolling.
What is a business plan?
Writing a business plan involves a detailed blueprint that outlines the future of your business. This living document outlines the products or services your business will provide and how you plan to provide them. Business plans are thoughtful and strategic. You will outline your starting point, the resources and abilities you have at the very beginning of this endeavor, and then establish where you want to go with it.
Business plans are typically designed to plan the future of the business for three to five years out. After that point, the resources and abilities you have acquired from years of successfully running your business, will allow you to create a new plan.
What is the Key to Writing a Business Plan?
There are 9 parts to writing a business plan. Here is a detailed look at each of these components:
- Executive summary. An executive summary is a clear, concise document that explains everything about your business. In just one or two pages, an executive summary will outline the goals of your business, its operations, your marketing strategies and a revenue model. If you plan on borrowing the money to start your business from a bank or other financial institution, your executive summary may be the only document that they review. Make sure it stands out.
- Business description. Your business description will outline what your business plans to do. Be sure to detail how you intend to make your profits.
- Market research. Market research is another very important section of your business plan. This is where you research profitable trends in your industry and take a careful look at your competition. When analyzing the success, strengths and weaknesses of your competitors, be sure to maintain an objective position. Search for the keys to their success and identify for readers what makes your business different from theirs.
- Product or service. This is the section where you get to explore the details of the product or service you plan to provide. Be sure to cover key points that investors will want to know like what it is, how it provides value to customers, your target demographic, etc. Detail really counts here so remember to be very specific.
- Marketing, sales and Promotion. In this section, you explain how you plan to spread the news about your business and build your brand. Be sure to include details about your website and its development and how you plan to advertise. Contemporary marketing strategies generally utilize both traditional and modern public relations strategies. Traditional public relations strategies include things like press releases whereas modern public relations strategies include various forms of social media. This section may also include things like public sampling, trade shows, and sales promotions. Ultimately, the way that you approach marketing your business will be determined by type of product or service you present.
- Management. Here you will outline will be running your business. Be sure to list any qualifications these initial managers may have as well as their experience levels. In the future, should any of these officers retire or part with the company, these will be your minimum criteria for filling the position. It is also a good idea to include a brief, one or two paragraph biography of each of your business partners and any key employees. This gives investors an up close and personal look at who will be running your business and what they are investing in.
- Financial data. This is the portion of writing a business plan that private investors will likely be most interested in. Here you will outline a careful financial plan for your business including cash flow projection and a break even analysis. Many investors will also want to see sample profit/loss statements and balance sheets. A strong, meticulously planned financial data section lets investors know exactly where their money is going.
- Investment. Here is where you outline exactly how much money you personally plan on investing in your business. If you are not willing to invest in your own business, you will have a difficult time getting investors to put their money into it. This section should also include an estimate of revenues, sales and should detail what type of return investors can expect on their investment.
- Appendices. The appendices section should include supplemental documents that support your plan. Supporting documents may include research you have conducted, potential logos, graphs and charts, references, images, etc.
Carefully constructed business plans can make or break your business. Not only is it an essential part of securing startup capital, it also is a comprehensive guide of how you plan to run your company. Business plan templates are a great tool to help you structure your plan. Here are some business plan templates to give you some ideas:
Business plan template for a startup business: http://www.score.org/system/files/u209922/Business%20Plan%20for%20a%20Startup%20Business_0.doc
Business plan template – balance sheet: http://www.score.org/sites/default/files/Balance_Sheet_Projected_1.xls
Business plan template for an established business: http://www.score.org/system/files/u209922/business%20plan%20for%20established%20business%202011.pdf