Business Plan Making
A business plan is essential to any company’s success. After all, every five companies out of seven fail within five years. We know you’re starting a new business or moving to expand and want to stay focused on the positive and the last thing you want to talk about is failure. But for 70% of business companies, failure is the reality, and the primary cause is a lack of planning. Whether it is insufficient market research, financial planning, management, lack of social media presence, website or something else, and these mistakes all boil down to a lack of planning that can be traced back to the roots of your company.
Business plan means:
A business plan in any company is a document with every crucial detail. It covers the following information:
- Why are we starting/ready to expand the business?
- What makes our company different? How can we differentiate ourselves?
- What solution are we providing? How do we offer it?
- Who are we? Be ready to introduce your management team, any key players, and advisors.
- Who are your customers? Target business?
- What needs to happen to break even?
- How can we make a profit? In one year? In five years? Etc.
Why is a business plan necessary?
The critical perception of a business plan of any company is to show you that your business is worth starting and the idea is worth pursuing. It provides you with the possibilities to get a detailed look at your goals. In case there is something to change and improve, it’s high time to do it before the business plan of your company becomes implemented. A business plan is integral in selling your company to potential investors and bankers. But as important, the process of writing involves you and your partners taking a real look at what you want the future of your company to look like and how you’re going to make it happen.
Details to be included:
Step-1: Executive summary
The summary is where vision is introduced.
- What sector are you in?
- What products/services do you provide?
- Who is your target audience?
- What does the future of your industry look like?
- How is your company scale able?
- What are the next steps?
- Who are the owners of your company? Backgrounds? Experience in sector/business?
- What motivated you to start your company? Why now?
Step-2: Mission statement
A mission statement should include goal and the objectives of the business; your industry, how you see it evolving in the short and long term, and who your business customers are. A mission statement also says who you are, and talks about the strengths of you and your team. This is where you, sell the features and benefits of your company.
Step-3: Products and/or services
This part includes information on what your business do and what you plan to sell it for. This is also where you sell the benefits of your business.
- How much does it cost to produce? Versus how much will you sell each piece for?
- Is there packaging?
- How will the client purchase the product?
- What system will you use to bill them?
- Are there extra costs in getting it to the customer? How will it be transported?
The products/services section should also differentiate your new business:
- What makes your business different?
- What gives your company’s product or service an edge in the marketplace?
- What distinguishes it from competitors?
Step-4: Marketing plan
- Customers: Are you B2B or B2C? Who are your customers? How do you plan to reach them? Where will you sell your product/service? How will you garner feedback from them? How will they know you care?
- Competition: Who are your direct/indirect competitors? What’s your advantage? Don’t be shy — tell them you are better and why.
- Niche: Again, what separates your business from your competitors — how will you make yourself known in the niche?
- Distribution: How are you selling it — directly to clients, to a vendor, online, at a store, an office, freelance, etc?
- Advertising: Are you advertising already? Where? When you have more funding, where do you advertise? How will you use advertising to retain customers? Get new ones? Make sure you outline your marketing budget either here or within the financial plan. How much will be spent on print, TV/radio, Internet, direct mail, external ads, etc?
- Sales strategy: Depending on the industry, this could be one of the most important parts — how are you going to sell your product/service? Online? A sales team? Telesales? How will you incentivize sales? Will you offer a free sample or trial? Host a free workshop?
Step-5: Operational plan
This part takes a reader through the day-to-day of your company, explaining the:
- Location/Logistics of your business
- Transportation (if you’re selling a product)
- Legal — do you need a permit? License? Do you need to join a union or other professional organization?
- Inventory — if you’re selling a product, where will you need to store it?
- Providers/Suppliers/Freelancers — Detailed contact info/pricing for anyone you’re outsourcing to.
Step-6: Management organization
This part includes a hierarchical chart of your company and how the operations we talked about above flow through it. List the positions and briefly describe the functions of each integral member of your business, including but not limited to: board of directors, advisors, technical specialists, accomplished salespeople, accountants, and lawyers.
Step-7: Fiscal planning
The fiscal piece of your business plan puzzle is the piece investors and loan managers are going to spend the most time looking at. Without proper capitalization and financial planning, even the most excellent business idea that fulfills an urgent need is at high risk for failing.
Cash-flow analysis: This reflects what you are going to sell versus your business expenses. This analysis projects your profit margin.
Profits & Losses analysis: Done in conjunction with the cash-flow, this looks ahead at least a year and includes revenue predictions, including graphical representations of those numbers.
Break-even analysis: This breaks down how much you have to, well, break even.
As you can probably guess, this is where you talk about the rest, the boring, and the things that you probably won’t need to include. But the addendum shows you did your research. Also, this is where you add any technical diagrams of your business plan. The addendum is also a great place to put references and press about your company, as well as resumes/CVs, adding proof of your awesomeness. The business plan project manager’s job is to organize things most pervasively. Anything that’s not essential and is interrupting the flow of information should be added to the addendum.