A clear business plan will allow you to focus on your goals and take opportunities as they present themselves. Here, we cover the basics of what your business plan should encompass.
Why a Business Plan is Crucial to Success
Even the greatest thinkers need to write their ideas down to get the most out of them. It’s no different when planning to start a business – by committing your plans to writing, you’ll help identify your priorities and measure your progress towards achieving your goals.
Purpose of Your Plan
Your business plan should have three main purposes:
- To determine the feasibility of your idea.
- To document a strategy and direction for your business.
- To share with external parties who have an interest in your business, such as investors.
What Your Business Plan Should Contain
You can tailor your business plan to your vision and include creativity if you wish, however there are some key elements that every plan should possess.
A Description of Your Business
The first section of your business plan needs to let the reader know what your business is, what it stands for, and what you want it to achieve. Include:
- An overview – general information about your business, such as its name, physical address, website, and its structure.
- Your vision – brief statement that lets readers know what your business believes in and where it’s heading.
- Goals and objectives – the aspirations you have for your business, and the objectives that will allow you to measure success along the journey. For example, you may have a sales target for the end of your first year in business.
- The products or services you intend to sell.
Write down the information you’ve researched about the marketplace you want to sell your products or services in. Specifically mention:
- The industry – discuss the industry your business is entering, the estimated size of the market you’re targeting, and any trends that could affect your venture.
- The competition – identify those direct and indirect competitors already trading in the market. Translate their strengths and weaknesses into opportunities for your business.
- Customers – detail the type of customers you’ll be targeting and why they’ll choose your products or services over that of the competition.
Think about what will set your business apart from your potential rivals. It could help to conduct a SWOT analysis of each of your main prospective competitors – a competitor SWOT analysis clearly identifies a future competitor’s Strengths, Weaknesses, Opportunities, and Threats.
Following your analysis, look for some gaps in the competition that you can use to your advantage when you enter the market. What can you offer customers that your future competitors’ currently don’t?
Marketing and Sales Strategies
By this point you’re likely to have researched your target market to establish that there’s a viable opportunity to sell your goods or services. Use your business plan to record in detail how you plan to market your offerings and which channels you plan to sell through.
Your marketing plan should talk about your strategies on pricing, promotions and product or service positioning. Also make a note of the types of marketing tools you intend to use, like social media, television, and print advertising.
Your business’s sales strategy needs to detail where you plan to sell your products or services, the sales process you intend to implement, and any after-sales service you’ll offer your customers.
By providing your planned marketing and sales strategies, you’ll reassure your financial backers while also having a guide in writing for your marketing and sales people.
Write down how your business will actually operate – for example, the type of staff you’ll need and the way management will be set up. Consider:
- Your team – to reach your goals you’ll need a strong team of motivated people around you. Write up a brief biography of yourself and what you bring to the table, any business partners you intend working with, and the profiles of your key staff members.
- External relationships – list the relationships that are vital to your business’s success, such as alliances, suppliers and distributors.
- Planned changes – note any changes that may come about after you start up. For example, rapid growth may mean you’ll have to lease or purchase larger premises.
- Contingency plans – detail the challenges your business might face and the plans you have in place to deal with them.
Document the financial resources you have available to begin your business. These should include:
- Personal resources – what you personally own and owe, what resources you plan to invest in your business, and how you’ll support your business projections.
- Business finances – while in the planning stages of your business, forecast your predicted cash flows and list the assets and liabilities you expect to have during start up.