Starting a business is an exciting venture. To make it an absolute success, getting all the details right from the very beginning is absolutely crucial. This is why one requires a business plan
A business plan is a formal statement that comprises the goals of a business and why and how they can be accomplished. Although a business plan does not guarantee success for a business, it can definitely help you identify viable ways to avoid failure. It helps you get a clear understanding of the strengths and weaknesses of your business and devise ways to capitalize on the strength and minimize the risks.
Structure of a business plan
Whether you are starting a new business or expanding an existing one, a business plan is a very important document. Today we take a look at what important items to include while crafting an exemplary business plan.
1. Executive Summary
This is where you briefly outline the goals and objectives of the business. This section summarizes the description of the business, the products and/or services provided, growth potential, source of funding and loan repayment plans, if any etc..
2. Description of the Business
This is where you describe the products and services that your business plans to provide and where and how you plan on providing these to your potential customers. This will require you to have an in-depth understanding about the industry you are venturing in and your target clients. You may also want to include an industry analysis, comprising an outlook for the future and how your business fits in.
3. Analysis of Market Opportunities and Competition
A thorough market research is crucial for your business. This research should cover various dynamics such as
- buying habits of your target clients;
- purchasing cycle of your target clients ;
- their willingness to accept new products and services ; and
- Your competitors and their business strategies
Such a study will help you to determine whether there is a viable market for the products and/or services your business plans to offer. It also helps you on differentiating your products and/or services from what is already in the market.
4. Marketing and Sales approach
This is where you outline your marketing plan. The primary goal of this section is to devises ways on how to spread awareness about the products and/or services you are planning to offer to your target customers. It will involve formulating advertising plans and public relations approaches your business is going to take. Your plan should include the techniques that you will implement to generate leads, increase conversion and retain customers. These should be actionable and based on facts.
5. Business Operations and Management
This is where you outline how you are going to run the business. Matters related to staffing, business development strategies, logistics, business infrastructure etc .are outlined in this section. Keeping in mind that operations will change as your business expands, it’s key to have provisions for these changes.
The success or failure of a business boils down to its profits and this section will help in planning how to keep it steady. The major aspects include:
- An income statement comprising the sources of the business’s cash generation
- The cash flow statement determining how you plan on meeting financial obligations
Additionally, the business plan should be inclusive of proper funding options for expansion and growth.
7. Contingency Plan/ Alternative course of action
Certainly even with an indisputable arrangement, there can at times be certain regions that can turn out terribly wrong. Your business plan need to incorporate methodologies that you will execute on the off chance that things don’t go as expected. This could include a shift in marketing strategies in case the desired results are not obtained within a specific time, change in product focus etc.
This is just but a basic structure of a business plan and therefore you can always include additional details depending on the type of business you are planning to venture into. A well-drafted plan is crucial in driving your business towards success.