Your business plan is vital in establishing the structure of your business, your goals and objectives, strategies, products and people. It is used to plan and manage your business, request financing or show it to potential investors. It has ten main parts and these are:
1. Cover and index
It sounds a bit silly, but a great cover for your business plan will show the professionalism and care that has gone into its production. It is also the ideal place to include your company logo and contact details. If applicable, include photos of your products.
It is essential that you also include your company name and number, as well as your contact details, such as address, website, social media accounts, and email and phone number of your respective manager. You will be surprised how many people forget this feature.
To help potential investors navigate, the index should include all the business plan items with the corresponding page number. Make it as complete as possible so that the reader has a clear idea of what the document contains.
However, producing the table of contents also gives you, the writer, an excellent planning tool to make sure you include all the points and information that you need to include.
2. Executive summary with the needs and objectives of your business
In the first part of the document, you must make a descriptive summary of the idea that includes the following points:
• The opportunity in the market
• The product or service and its advantages
• The management team
• Financial summary of financing needs and expected profitability
As you write your executive summary first, write down all the information you have in mind. You can always return to it at the end of your main body wiring.
Remember, you need to capture the attention of investors in about two pages where you will summarize the most important points of the text. You also have to keep several things in mind:
• Vitally you must define the need or problem that your business intends to solve.
• You need to define the fundamental objectives of the company.
• You must inform the investor at what stage your company is currently. Whether it’s in pre-production, starting to expand, or in profit, for example.
3. Plan your business
This is the point where you take out the scratch paper.
• You must describe the mission of your business, that is what you hope to achieve. So you need a list of actions that your company needs to get to this point.
• Next, you need to find out how you will solve the business problems you have identified.
• Now describe what your product or service is, what customers will get with their purchase and what are its weaknesses or drawbacks.
• Find out what price your potential customers will be comfortable with.
• Finally, you need to find out how you can find these customers.
Often times all of this can be defined by using a business model canvas and this is the subject of another of my articles. You can purchase consulting to produce this model.
In general, there are already companies that work for the same objectives. Identify them and ask yourself: How am I going to differentiate myself from my competitors?
4. Explain the structure of your company.
Making a business plan involves examining the strengths and weaknesses of your competition, once identified you can justify why your business is unique. You must stand out from the crowd to increase your investment opportunity. That is, see the following information:
• Describe what you will sell to whom and at what price.
• Present your branding concepts: are you going to be a luxury company, for example, or stack it up and sell it as a cheap company?
• Describe how you will fulfill a request; in other words, the whole process from purchasing the products yourself to the actual delivery to your customer and after-sales service.
• Clarify how you will cover the major areas of production, sales, marketing, finance, and administration.
• Include management, sales, stock control and quality control accounts.
• Define how you will sell your products and analyze, if necessary, the location of the company and the advantages and disadvantages of this situation.
Be sure to answer the following investor questions: What are your competitors’ products and how do they create them?
5. List the characteristics of the market in which you will develop your business.
You will have to analyze the market conditions: how big it is, how fast it is growing and what is its profit potential. Explain how you are going to research your audience and with what tools.
Know the target of the market in which the business will be developed and the direct marketing strategies towards that target. If you don’t have a marketing strategy that works, you will waste time, effort, and money.
Answer the following question: Where are you going to find your customers?
6. Currency promotion strategies
This is where your business marketing plan should come in. Perhaps it is one of the most relevant steps when developing a business plan. Promotion and marketing strategies could determine the success or failure of your business. Try to answer several questions:
• How will you position your product or service? This is where you want the 4 Ps of marketing: price, product, promotion, and place.
• Compare features like price, quality, and customer service with your competitors.
• How will you sell to your customers? Phone, website, face-to-face, agents?
• How will you identify potential customers?
• How are you going to promote your business? Advertising, public relations, email marketing, content strategy, social media, etc.?
• What benefit will each part of your business get?
• Why would someone abandon their current competitors to buy into your business?
• How will you attract them to your company and its products?
• What is a fair estimate of the number of clients you will get each year for the first three years?
• What will be your estimate of the cost of getting each new customer?
• What is the estimate of the cost of retaining each customer?
7. Define your source of income
This is where you write down all the information about what your business will sell and where the source of income will come from.
• The products and services you will provide.
• Any advertising fees, commissions, membership fees, etc. you will receive.
The analysis should include: price structure, costs, margins and expenses.
Include details of your anticipated cash flow for the first three years. Cash flow is an important consideration. In web-based businesses, it is known as the burnout rate.
8. Your team
This is where it gets lyrical about the strength of its directors and core staff. Include their experience in similar posts and what they can do for your startup. Include basic resumes for each of them and state their responsibilities. If you have a particularly well-known supporter, mentor, or director, this is where you bring it up.
9. Your finances
When you get to this point in making your business plan, you need to start translating everything you’ve said into numbers. That is, analyze the financial forecasts of your business. Also include your financial strategy – how you will manage your cash flow, vital for any new business. If you don’t have a plan, your business could suddenly go under or fail. If, on the other hand, you are unexpectedly successful, your goals may suddenly change and you will need a new business plan. Therefore, you need to assess your business risks, identify areas where something could go wrong, and explain what you would do in that case. It should include any other investment you have or will receive. Details of your share allocations, particularly high percentages, should be included.
9. What are you going to do with the investment?
Very important, include what you are seeking financing for and how and when you plan to spend the investment. It is vital that the potential investor sees that the business will improve tremendously with the investment.
Indicate how soon and how often the potential investor will see a return on their investment. Also include the shares offered, as well as their possible stake in the company after they have invested.
It is vital that they are offered an exit strategy so that they can have a healthy return on their investment and then move on to the next new company.
It is very possible that after making the business plan you need to provide additional information to complement it. For instance:
• Market research data that you have used.
• Resumes of the team that will form your company. This is very important if you are looking for high levels of financing.
• Technical specifications of the product or service (may include photographs).
• The names of some potential clients.
Creating a business plan involves writing many pages with attractive, dynamic and precise texts that attract the attention of very demanding people. It should attract the attention of investors, who despite having read hundreds of them must find something unique in their business plan.