Congratulations! After all the hard thinking, trepidation, and cold feet, you finally took the big decision to go out on a limb and start that business you’ve always dreamt about. It’s okay if you’re still not too sure about this, at least you’ve decided to do it anyway. What matters now is to keep going. And an important first step on this path would be the development of a business plan. Regardless of whether or not you think it’s needed in the immediate, a business plan is something you should have prepared and handy right from the outset.
It’s what you’ll present to investors in order to poach your ideas and get the much needed funding from them. Also, if you’re planning to start by taking out a loan, the bank or other lending organization or individual need to see the viability of what they’re staking their money on. And even if you’re self-funding the business, a clear and concise business plan will help you put your goals and the path to achieving in perspective. It’s something you can always have to direct you and help you stay on track when you really get into the thick of things.
To start with, we need to let you know that your business plan should be tailored strictly to fit the understanding and knowledge base of who you’re writing it for. It shouldn’t be so long as to bore the reader out of their minds. At the same time, it should contain all the important details about your proposed business that will give even a layman a good idea in just a few reads. Now that we’ve gotten that out of the way, let’s get cracking and talk about the basic components that your business plan should possess:
- An Executive Summary: Just like the name implies, this part basically summarizes what the whole business plan entails. You have to throw in your best here as some investors may possibly not look beyond it. And we all know what they say about first impressions anyway. So, your executive summary should present an overview of what you plan to do with your business and how you plan to do it. Be sure to include exact figures and not just vague observations and statements about potentials and possibilities. This will show you have done your homework and you’re ready to hit the ground running.
- A Description of the Business: This is where you talk about the model of your business, what it is meant to achieve, and a bit of how it is to operate. All of this should be done with reference to the prevalent environmental circumstances such as the growth or otherwise of the industry as a whole, and the condition of the general economy of the nation. These will help you provide a proper perspective about how your proposed business wants to come in.
- Market Analysis and Strategy: Here is where you get to do an indepth analysis of the existing market and your plan to penetrate it. You should outline what the current market realities are and the advantages they provide for your proposed business. Also, don’t forget to mention the challenges that might be faced and how you plan to handle them. This is an area where fastidious investors are wont to pay close attention. Don’t be unnecessary over optimistic in your outlook, any sensible investor can see through that right away. Be as balanced and objective and you can be and present the facts both about the market and about your plans for operating within it.
- Competition Evaluation: In this section, you do a review of the competing businesses already in the market, their strengths, weaknesses, and how you hope to do better than them. Investors need to be convinced that you have a plan to avoid being pushed off the market as newbie.
- Execution Strategy: Again, the name says it all. The question you want to answer in this section is: How do you plan to put all of these plans into action. It’s important that you’re not just building castles in the air and making unrealistic projection. You should be able to put in a workable action plan.
- Financial Plans and Forecast: And here’s the all-important part about money. You need to clearly set out how much you need in terms of costs to get running, and how much you revenue you hope to generate through the business. This part also requires a lot of attention to detail, proper research, and in-depth calculations. The moment investors catch any whiff of inflated figures or wrong calculations, they’re gone as fast as the wind.
After putting your business plan together, you should have it looked over by associates, partners, and one or two professionals before having it in its final form. There will definitely be some things you could add which they would point out to you. If done properly, your business plan is your first step to success in the business world.