A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.
Business plans may target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture, a 3 to 5 year business plan is required,
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You’ve no doubt heard the expression, “Failing to plan is planning to fail.”
Many entrepreneurs write a business plan only when they need to secure start-up financing. However, your plan is far more than a document for banks and investors to read; it’s an invaluable road-map for launching and growing your business.
In order to put your business concept on paper, you need to think through and research the many factors that are needed to make sure your business is a success. With a plan, not only can you spot potential weaknesses, opportunities, and threats, your plan can help you make informed decisions about your venture before you commit yourself legally or financially.
Here, we’ve summarized the key sections that you’ll find in a business plan.
Your executive summary should be 1–2 pages long, and provide an overview of your business concept, key objectives of your business and your plan, ownership structure, management team, your product or service offering, target market(s), competitive advantages, marketing strategy, and a summary of your financial projections. Your executive summary should be written last, after you’ve written the rest of the plan; each paragraph should be a summary of the more detailed, related section of the plan.
In your overview, include details regarding your business’s history, vision and/or mission, objectives, and your ownership structure.
3.Products and Services
Expand upon your products and services, including features and benefits, competitive advantages, and, if marketing a product, how and where your products will be produced.
The industry overview is your opportunity to demonstrate the viability of your business by discussing the size and growth of your industry, the key markets within your industry, how your customers will buy your products or services, and which markets you’ll be targeting.
Here you describe your target market segments, your competition, how you’ll differentiate your products or services, and your products’ or services’ unique selling proposition (USP).
Discuss product or service pricing and promotion, including how your promotional programs will appeal to each of your target market segments.
Provide a plan of traditional and guerrilla marketing tactics, such as tradeshows, press-magnet events, social media marketing (e.g. Face book, Twitter, etc.), networking, and print, media, or online advertising. Include the cost associated with each tactic.
Describe how your products or services will be sold (e.g. storefront, online, wholesalers), and your target markets’ buying cycle.
Provide a profile of your management team, your human resources plan, your business location(s) and facilities, your production plan (if selling a product), and an overview of day-to-day operations.
Some believe this is the most important part of a plan – so much so, it’s worth dedicating up to 80% of your time to writing this section. You’ll need to show three years’ worth of projected financial statements, including income statements, pro-forma balance sheets, and monthly cash flow and annual cash flow statements. Summarize each statement into a few easy-to-understand sentences and put these in a cover page for the statements. Be sure to document all of the assumptions you used in forecasting your revenues and expenses.
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The short answer to this is, yes. Instead of seeing a business plan as a chore, it’s an opportunity to lay out the way your business will grow over the years and gives insight into how your organisation is performing in the present, and how it can develop in the future. It’s also essential to show potential investors and partners the plans you have for growing and puts forward a much stronger case than words alone
How long should a business plan be?
There is no right or wrong answer to this question – a business plan can be anywhere from 10 to 100 pages long (although we recommend keeping it shorter so your audience doesn’t lose interest). It mostly depends on the purpose of the plan, and who the audience is. If it is an internal business plan, you can exclude certain areas and only focus on the essentials such as implementation. If you are presenting to new investors, the plan is likely to be longer as you will be outlining the business as a whole together with your present situation and plans for the future.
What goes into a business plan?
The best way to start a business plan is to open with an executive summary about the most important points of your business plan followed by a description of your company. From here, you can identify your target market and customer profile together with how you are currently reaching them. Follow this with an outline of your operations and how your business works on a day to day basis and conclude with a look at the current financial situation. These are just the broad elements of a business plan; for more details about what goes into a business plan, read our ‘what is a business plan’ (link to article) article that goes into more depth.
Do I need to meet with an attorney before writing my business plan?
It’s really up to you, and different types of businesses will have different needs, but meeting with an attorney who is well-versed in legal issues affecting small businesses can be quite valuable. Even if you don’t have specific questions, an attorney can review your business plan to make sure it adequately reflects relevant legal realities, such as the costs associated with certain regulations.
How do I write a business plan?
There is no exact science to writing a business plan, though there are guidelines which most successful businesses.First, is to include a statement outlining the objectives and goals of the business. Second is to include financial information such as start-up costs, revenue projections, profit and loss projections, breakeven points, and cash flow analysis. You don’t have to be an accountant to use these figures but you should at least be familiar with the terms and have another person familiar with accounting double check your numbers. Catching financial issues early is critical.