Good business Planning is crucial to business success. You cannot start a business without a plan. Doing so would be kind of like setting off on a journey without any plan of how you will get to your destination.
Your plan will give you an insight into what you will need to run your business, and how you will need to run that business.
Therefore an excellent business plan will need to have the following attributes.
1. Business Information
This is where you write the business name, address, contact numbers, emails, etc.
2. Executive Summary
Basically, an executive summary is a brief outline of your entire business plan. Call it an overview of your business if you like.
This is where you briefly explain what your business plan is all about. The rule of thumb is that your executive summary should be no more than 10% of your entire business plan.
Remember this is where an investor can lose interest in your plan. You really have to sell your idea and the entire business, in as few words as is sufficiently possible.
3. Unique Selling Point
What makes your business special to customers? In this section of your business plan, you outline what distinguishes your business from your competition.
State that special quality about your business that will make customers prefer dealing with you instead of your competition.
4. The Business Owner
This section is all about you. This is where you sell yourself to the lenders. What qualifies you to run the business successfully?
They want to know all about your background, experience and knowledge, and how it relates to your business. The lender is not only going to lend to your business, but also to you as a person.
5. The Business, Service and the Products
Now, this is self-explanatory. This section requires you to explain your business in more detail.
State what your business is all about, what your products/services are, who your customers are, how you will make money, etc. This is where you explain your executive summary in more detail.
6. Target Markets Analysis
Who is going to buy your products? Who are you targeting to sell to? What age group, gender, income, race, and location, are you targeting?
Why do you think they present a market and an opportunity? You may mention here, any qualified researched you have conducted which confirms that there is, in fact, an opportunity on that market.
7. Market Research
You need to give an outline of the primary research you conducted and its findings in this section. The methods of research, who conducted the research, their qualifications, the sample size and the criteria used to choose that particular sample, etc.
8. Competition analysis
This section is where you tell your investor about who is going to compete with you for customers. How established they are, and how much risk they pose to your business.
You also need to outline your competition strategy in this section. Convince the lender that you have a survival plan, and that you have safeguards in place to protect your business against risks posed by your competition.
9. SWOT Analysis
SWOT simply is an abbreviation for; Strengths, Weaknesses, Opportunities, and Threats. Analyze in this section, your business strengths, and advantages, and also any vulnerabilities that may exist.
Reveal any business opportunities that may be available for exploiting and also any threats that your business may be exposed to. Honesty is KEY in this section.
10. Marketing Strategy
This is also self-explanatory. What strategy are you going to implement to bring awareness of your products/services to potential customers? What activities are you going to undertake?
11. The Marketing Plan
A marketing plan is simply your marketing strategy combined with monetary issues. What marketing activities will you implement and how and when will you need to implement them?
Also, the plan will highlight how much your marketing activities will cost The plan should show all the financial commitments of the company towards such activities.
12. The Business Management & Organisational Structure
Who will manage the business? What skills do they possess? What management structure will your business adopt? Will you use consultants?
Who are you going to employ? Basically, you are simply stating how your management and employee relationships will work.
13. Logistics and Operations Plan
In this section, you discuss how you will operate your business to ensure success. How you plan to operate efficiently.
Some of the issues here are location, facilities of the business, suppliers, accounting and management, insurance, and general overview of your employment policy.
This section deals with your financial projections. Your financials will include projected sales forecasts, break-even analysis, cash-flows, Incomes statements, Statement of Financial position (formerly known as the balance sheet), your annual budgets, your personal livelihood budgets, etc.
You are likely to make a lot of assumption in coming up with some of the figures in your financial projections. You need to reveal what those assumptions are and the basis of those assumptions.
This involves a lot of number crunching and you may have to consult someone to do the financials for you if this is not your area of comfort.
15. Risk Analysis
This section requires you to talk about the risk involved with your business. Desist from trying to give the impression that your business is risk-proof. Every startup has risk including yours. The question is, how do you minimize that risk.
This is where you attach all your research documents, news reports, primary research findings, secondary research, and so forth that confirm some of your claims.
Basically, it is where you present the evidence of the declarations you have made about the availability of opportunities, demand, etc. You also need to attach your CV and a copy of your credit report.
Attach copies of all financial quotations that you have gathered for, assets, insurance, and any cost you have indicated. Also in this section, you can attach evidence of the money you have invested yourself in your business thus far.
One last point that I would like to make here is that the business plan is more for you than for lenders. Do not just do a business plan to present to banks.
Even if you do not intend to seek funding, you still need to compute a business plan. You should have a copy at your desk at all times. It’s the blueprint of your business. It shows you where you want to go and how you will get there.
Call it your business satnav. You punch in your business goals and it shows you the way to get there. You will need it more to help you direct the business. It will give you an insight into how your business will work.