That old maxim “if you fail to plan you plan to fail” has survived for so long for a good reason: it’s true! Unfortunately, it has become very typical for a lot of budding entrepreneurs to completely overlook the purpose and value of a solid business plan. If you don’t have any strategy for your business’s growth and development, then you’re sure to run into problems, which may cause your whole idea to crash and burn as soon as you’ve started pursuing it. If you’re having any doubts about the direction in which your business will be going, here are some of the key elements to any business plan…
In the typical structure of a business plan, the executive summary should follow soon after the title page. This should tell the reader, in the role of a prospective investor, what you want. Clearly stating what you’re asking for is absolutely essential. When drafting your executive summary, be sure to keep it short and sweet. It should never exceed a whole page, no matter how complex your use of funds may be. Think of it as a synopsis or a blurb of the entire business plan that follows. You can read more on drafting an executive summary at https://www.inc.com/guides/2010/09/how-to-write-an-executive-summary.html.
The market analysis section of the plan should outline your knowledge and experience of the industry you’re planning to enter. Taking the time to draft a market analysis will more or less force you to become intimately familiar with every little aspect of the market, ensuring that a target market can be clearly defined, and that the company you’re planning to launch can be positioned to reap its share of sales. A thorough market analysis will also help you to establish pricing, distribution and marketing tactics that will allow your business to become a profitable operation in an increasingly competitive arena. It will also give you a clearer idea of growth potential. Every good market analysis starts with defining a given market in terms of its size, growth prospects, structure and trends. Your financials should also be tied up in this section. After you’ve analyzed the market and established clear aims for your business, use three to five years of hard historical data to draft some financial forecasting.
This part of your plan is similar to your executive summary, but a little more hands-on and practical. In this section, you should give readers a bird’s-eye view of how the different elements of your business mesh together. It should include a summary of the nature of your business, and should also highlight points from your market analysis which you believe will make your operation a success in the current climate.
Marketing and Sales Strategies
Marketing is the lifeblood of any profitable business; creating customers and sales, and generating the capital needed for keeping the whole operation afloat. Needless to say, this isn’t a part of your business plan that you want to just wing or improvise! Take some time to look at your target audience, and devise a marketing strategy around them. Start off with the plans, tactics, and channels that have worked well for companies you’ve worked for in the past, ideally in the same niche as the business you’re planning to launch. Then, branch out to ones that you believe are working for your main competitors, and other businesses of a similar size. You may find it helpful to support your draft with information like this: https://davidcarralon.com/seo-strategy. Remember that marketing never sits still, and this part of your business plan should remain fairly fluid. You never know when you may have to reach out to further investors, and tweak little details to keep up with the motions of your industry and narrower niche.
Organization and Management
If you’re trying to get a fledgling start-up off the ground, and you’re currently managing a small team of people, then this may just be the easiest part of your business plan. This is where you’re going to talk about your organizational structure, any legal details about the ownership of your business, summaries of your upper management, and the qualifications held by your board of directors.
Service or Product Line
This is your chance to talk about your products or services. After all the more mundane details, the service or product line section lets bright-eyed entrepreneurs finally have some fun! Summarize what it is that you’re actually selling, and be sure to emphasize all the benefits (rather than the features) and establish your unique selling proposition. While it can chase away investors if you devote too much of your business plan to waffling on about your product, it’s certainly important that you go into detail, and let prospective investors know what exactly they’re buying into. Most importantly of all, ensure that you’re showing not only why your product is different to what’s currently on the market, but also what makes it better than the competition.
This section is where you state, quite simply, the amount of funding you’ll need to start your business, and expand it in the near future. Obviously, this is going to depend heavily on the kind of niche you’re planning to enter, and your vision for the long-term future of the business. However, all business owners should make a point of including the best and worst-case scenarios in terms of cash flow, and avoid shooting too low. Yes, asking for less will up the chances of an investor being attracted to your idea. However, working with less cash than you need can quickly drive your business towards disaster for obvious reasons.
No matter how revolutionary and disruptive your product or service is, if your business plan is lacking in any of these sections, it’s time for a redraft. Even the seemingly simple businesses are made up of a number of variable factors, and if you don’t have a clear view of these, you’re going to scare off investors and have a very hard time navigating your business forward.