How to make a business plan ? – This is a common question in the head of most of the new entrepreneurs and startup owners.
A goal without a plan is just a wish. It is essential for every business to have a business plan. It helps in providing direction and attracting potential investors.
A business plan is important for the success of your business. But, how do you make a business plan? Relax! This article will help you answer all your queries.
Firstly, What is a business plan?
A business plan is a document of your business’s future objectives and strategies for achieving them.
It is very important as it helps in understanding the vision of your business, it helps in analyzing your plans for finance, marketing, manufacturing, production, sales, etc. and this will increase your chances for success.
We have written these 9 steps to help you develop a business plan for your business –
Table of Content
|3||Detail about management|
|4||Overview of market size|
|5||Details of products or services|
|6||Sales and Marketing plans|
|8||Detailed Financial Projection|
1.) Executive Summary:
An executive summary is a short document that summarizes a long report or a proposal. It is an overview of your business and your business plans. When you’re trying to pitch your idea to a potential investor, you’ll need to craft a perfect executive summary.
Curious to know why you write one? Here’s why- Investors, lenders, CEO’s and managers are always busy. When you’re writing your business plan, your goal is to get into the door of the investor.
Assuming that your business plan is a good fit for the investor, a strong executive summary will get you a meeting with the investor. A poor executive summary will leave you standing in the cold.
2.) Company Summary:
A company summary is an important part of the business plan. It is an overview of the major points about your company- your history, management team, number of employees, location, mission, vision and legal structure.
- Company history: Includes date of founding and the people involved.
- Management team: Details about who runs the company and other key roles of the employees.
- Location of the business: Details about the place of your workspace.
- Legal structure: There are several business structures like Sole proprietor, Partnership, One person company, Private limited company and Public limited company. The summary must include what structure you’ve decided and who owns what percentage of it.
- Mission statement: Is a short statement of who you are, what you do and what you desire to become.
3.) Detail about management:
A management team consists of all the employees that work together and manage a company. These individuals manage the daily operations of a company to ensure efficiency and customer satisfaction.
If you’re a startup or looking to expand, there may be team members you’re lacking. In that case, mention the roles and what your plans are to fill those job opportunities.
If you plan to present your business plan to banks or potential investors, this is crucial data.
It includes who is the CEO in your company? What qualifies employees for their respective positions? Work experience, Past success and their degrees can be referenced for each person. You want to showcase everyone in a good light as investors invest in people first and business second.
4.) Overview of market size:
Market size is the number of people in a certain market segment who are the potential buyers.
Companies should determine the market size before launching a new product or service.
Now, it’s time to focus towards your target market. Who are you selling to? Once you have identified your target market, you should discuss the trends for this market. Talk about the market’s evolving needs, tastes or other forthcoming changes in the market.
5.) Details of products or services:
Your customers don’t care about you. They care about themselves. They care about their needs, their wants, their dreams and their goals. If you’re able to help them reach any one of it with the help of your products or services, your business has a great chance of making high profits.
It’s certainly useful for you to include a paragraph about your products and services to show the investors what you offer.
6.) Sales and Marketing plans:
Before you even think about writing your marketing and sales plan, you must have your target market well defined. Without truly understanding who you’re marketing to, it will not convert into a sale.
The marketing and sales plan section of your business plan helps you strategize how you can reach your target audience, how you plan on selling it to them, what your pricing plan is, and what types of campaigns and partnerships you need to make your business a success.
A goal describes where you want to be in the future. Business goals describes what a company expects or hopes to achieve over a specific period of time.
Not only whole companies have goals but also departments and employees usually set goals. If they achieve their goals, they get a promotion. The business goals and the employee’s goals usually go hand in hand.
8.) Detailed Financial Projection:
Financial management is at the heart of any business. It is one area that can help drive it forward. A financial projection is an essential part of your business plan.
It is one of the main things the investors pay attention to. It is basically the projection of future revenues and expenses. The financial section of your business plan should include sales forecast, expenses budget, cash flow statement, balance sheet, and a profit and loss statement.
9.) Funding requests:
If you’re planning to start your own business, you’ll need the funds to turn your vision into a reality. While some entrepreneurs have personal assets to fund their business, most require assistance from an outside source, in which case a funding request is required.
A funding request is basically a written request to obtain funding from a lender or an investor for your business. Whether you’re obtaining capital from a bank, private investor or an angel investor, you should create a funding request. It increases your chance of getting the funds approved.
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