Many aspiring entrepreneurs view a business plan as a tool filled with strategy, projections, and hyperbole to convince lenders and investors that the deal makes sense. It is one thing to have a great business idea, but quite another to back it up with concrete figures, forecasts, and analyses.
A solid business plan is an elaborated strategic plan that develops a marketing and sales plan, forms the foundation for a smooth operation, and convinces lenders or investors to get on board.
While not every successful business begins with a formal business plan, many founders find it valuable to take the time to explore their idea, the markets they want to enter, and to understand the scope, strategy, and tactics.
A good business plan can help clarify your strategy, identify potential obstacles, decide what resources you need and evaluate the feasibility of your idea and your growth plan, especially if you start a small business. There are many reasons to write a business plan, but it is not just the domain of entrepreneurs who want to secure funding and expand their business.
Business planning is a continuous process that helps you validate your idea, establish objectives and manage the pitch for your business. Download our free business plan template and access the content covered in this article to begin writing your plan. If you need a reference for specific industry examples, I encourage you to look at our sample business plan library.
Now that you have prepared your business plan for writing, let us understand the common elements of your business plan and learn why you should incorporate every section of your plan. The business plan cover page is the first and most important part of the plan, as it provides the first impact and creates a platform for investors and readers to engage with the plan.
By looking at the front page, investors or readers can quickly get an idea of the purpose of your business idea and your business plan.
A well-developed, detailed plan offers a clear path for the future, forces you to think about the validity of the business idea, and gives you a better understanding of the financial competitiveness of your company.
You can expand a complete business plan as you write your lean plan, including more details on market research and advanced financial forecasts. Starting your business plan with a structured sketch of the essential details that you contain in each section is an excellent first step to take.
This section is essential to ensure funding because it provides a comprehensive overview of your history, business and legal structure, products and services, key partners, and a summary of your financial and business objectives. You will find a description of your financing needs, detailed financial statements, and a balance sheet analysis in the financial section.
It contains essential information, including its registered name, address, physical location, the names of important persons, business history, its nature as a company, and other details about the products and services it provides or will offer.
Also included is a mission statement explaining the focus of your company, a brief description of products or services offered, basic information such as ownership structure, and a summary of your plan. As part of the business plan, you will be presented with three primary financial documents for each company – a balance sheet, an income statement, and a cash flow statement (or, in the case of new companies, cash flow forecasts ).
The summary gives you an overview of your company, including your mission statement and details of what you offer. The operational and management plan is intended to describe how the business will function in the long term.
The purpose of the design and development plan is to describe the product design, a diagram of its development in the context of production and marketing, and how the company itself creates a development budget to achieve its goals.
There are two main categories of business plans: external and internal or standardized business plans, including details of services and products, target market, strategy, objectives, and budgets of the company.
You can point out potential investors, banks, and sellers who may not be interested in reading a complete standard plan for external use. Show the absolute highlights of your company, such as an overview of the company, its products and services, and market and financial data.
Don’t be afraid of an extensive list of attachments, including CVS team members, built-in customer personas, product demonstrations, and examples of internal and external messages.
Information about the market, your competitors, and your customers should be considered relevant and relevant data points. This summary must still be pending when you are looking for funding.
The objective statement defines your company’s goals and contains a business strategy that describes in detail how you intend to achieve these goals. Once you have accepted the idea that you can satisfy the market and investors, the challenge is to organize your data into a compelling document that you can sell to your venture investors and clients. A well-thought-out package is a plan to attract the necessary investment to support your idea.
If you take the time to write a plan that suits your own business, it will be a better and more helpful tool for the growth of your business. It will make it easier to share your vision and strategy with your team and get everyone on the same page. When things are going well, your plan helps you think about how you can reinvest in your business later on.
Once you complete the section of opportunities on your business plan, you move onto the chapter on “Execution,” which includes how you will get your business running. If you are like me, you have a great business idea and want to write the perfect business plan to turn it into reality.