How to make a business plan?
A business plan is a written description of a company’s future. A well-written, clear, and compelling business plan provides a guide for setting up a business and running it smoothly. In other words, creating a business plan will help you accomplish your business goals.
Now that you have an initial understanding of what business plan is and why it is important, it’s time to divert your attention towards how to make a business plan. In this article, you will get all the essential elements which you are required to devise a persuading business plan.
A business plan should be persuasive
As mentioned above, the basic purpose of a business plan is to get a guideline for running the business. Beside this, a compelling business plan also helps in attracting potential investors, resources, and partnership which collectively helps your company grow. Here are some more details:
These investors could be private financing companies, venture capitalists, or wealthy people who are interested in funding your business. They generally require a business plan to assess and evaluate the potential of your business.
Sources of financing:
Another source of getting capital is bank. A business plan includes your goals and shows how you will get there. Business and risks are the two things which always come together, so make your business plan in a realistic way that also presents the underlying risks. It will increase your chances of getting approved for funds.
A business plan can play an imperative role if you are seeking partnerships. Being a newcomer in the market you will need to create partnerships with others to successfully make space in the industry.
How to make a business plan?
Without further ado, let us discuss all the steps that go into making a killer business plan:
Before making a business plan, extensive research should be the first part to complete. You should know everything about your business idea, model, and the industry you are entering. Only this way you will be able to write a plan which helps you in getting the required capital and other benefits of a great business plan.
The process of writing a business plan starts with an executive summary. Basically, it is a brief summary of the company’s objectives and goals. It includes these points in a concise way:
- Products or services
- Description of the market
- Growth potential of your company
- Overview of funding requirements
The summary should be one or two pages long and clearly describe that how your business can solve a specific problem/give value to customers, make profits, and so on.
In this section, provide detailed information about your company. It should explain which problems your business solves, the target market which you are going to serve and the competitive advantages.
Your company description should encompass the location of your company and the experts you are working with.
Services or products:
Next comes the information about the services or products that you are offering.
Describe how your products or services are better than your competitors. If currently, there is no market for your offerings, discuss why your products or services are needed and how they are important to solve the problem.
Copyrights, patents, and trademark that you own or applied for should also be a part of this section.
The target market includes the clients, customers, and companies to whom you will serve. Deep research is helpful in analyzing your target audience.
If you are offering services or products to businesses, it is imperative to discuss the scope of your services and how will they solve the specific problems. On the other hand, if your target audience is consumers then you should be focused on the solution you are providing for them and in which ways you are better than others.
This section of your business plan is devoted to the assessment of your competitors. It may include both the current competitors and potential competitors.
In fact, every business has competitors. It is critical to understand the strengths and weaknesses of your competition as it is required to make your business survive and grow in the market. Competitive advantages make you capable of devising the strategies which help you in making a dominant space in the industry.
New strategies can be developed to create barriers for new competition to enter your market and the weaknesses or gaps that can be identified and filled with your products or services.
Organization and management:
This part of the business plan is dedicated to the introduction of your management team. Many investors think that the experience and expertise of the management team is one of the most imperative factors in evaluating the growth potential of a new business.
Working on this section will not only help you in getting the attention of the readers but also assist you in analyzing the skills, experiences, and resources that your management team requires. Addressing these issues will increase your chances of success in the business.
This section should have a detailed description of your experts (their educational background, key skills, and experiences), which duties and responsibilities they perform, and what is the salary structure of your company by position.
Numbers matter a lot. Financial projections help the investors and entrepreneurs to assess the company’s potential for success. If any business is looking for outside funding, providing financial reports are crucial.
Most business plans encompass cash flow statements, income statements, balance sheets, operating budget, and break-even analysis. These are the five projections that must be present in the plan.
Moreover, financial projections facilitate you in analyzing whether your business will be viable, and if not you will get an idea of the more work you are needed to do.
While making your business plan, keep in mind that it should have all the important elements that effectively capture the attention of investors, partners, and suppliers.
Make sure to leverage your business plan also for identifying your weaknesses which are required to be addressed for running a successful business.