Planning is essential before you start any business. It gives you a blueprint for where the company should be in the coming years and the strategy to reach that level. What’s incredible about planning is that it will also illuminate all the potential issues you are bound to encounter.
While several successful businesses are launched based on short notes written on paper, it is wise to have a comprehensive business plan. The perfect business plan will help you avoid as many mistakes as you can. Here are some of the critical elements to include in your business plan:
The company overview describes your business services and products, purpose, and who you target as your ideal customers. The summary shows how your company is different from other businesses and how it meets its objectives. That is what is known as market analysis. The overview shows the readers your plans for the amount of market share you plan to gain and how you will do it. It will also offer an estimate of the gross profit margins for your business.
This section of the business plan also shows an overview of the competitors’ weaknesses and strengths, which provides an idea of how viable your business will be.
In many ways, the executive summary is the most crucial part of your business plan. This key section shows potential investors your ideas and strategies. Investors, lenders, and shareholders will be keen on your executive summary since it’s a key indicator of whether your project is feasible or not.
Make sure your executive summary is compelling, clear, concise, and persuasive. The section showcases vital information about your business and how it will help solve a need in the market. It should include:
- Company information, including founders and their biographies
- A Mission statement, which summarizes the business and its goals
- Growth projections that quantify and outline the earning potential
- Services or products that you will offer, described in detail
- Financial information, such as prior performance, current capital, and future outlook
This analysis shows an overview of your current position in the market, competitors, your competitiveness, and the existing market gap that your business will fill. It would be best to describe the size of your target market, how prices compare within it, and your plans to remain competitive in the industry.
In this section, you should describe your growth strategy. What are your marketing plans for expanding the business? What advertising strategies will you use? What’s your budget for these activities? Give details on how you will track your progress towards the set goals.
This is another vital element of your business plan, especially if your strategy involves lenders or investors. Here, you will include financial goals, budgets, and cash flow projections. Every effective financial plan must include:
- Breakeven analysis
- Yearly profit & loss projection
- Capital requirements
- Statement of cash flow and forecast
- Assets and liabilities, among other critical reports
The ideal business plan should be comprehensive enough to enable readers to visualize your business. From the business plan, potential stakeholders should ascertain whether your business idea is lucrative to invest in or not. By presenting all the information about your business in a clear and compelling way, you can improve your chances with investors or lenders.