7 Aspects You Must Cover in Your Business Plan
There are a lot of articles and blogs out there which talk about the importance of having a solid business plan when launching a new business, but what does a business plan need to include? It can seem a daunting task when you’ve never been faced with writing a business plan before, but it’s a crucial task which will enable your venture to start and continue on a solid foundation. A business plan is also necessary when you’re looking to secure funding or investment. Essentially, a business plan is your vision for how the business will run, what you expect to achieve, and how you will achieve those things. To help you get started, here are seven aspects you must cover in your business plan.
1. The Executive Summary
A business plan should begin with a simple summary of the business plan, which catches the attention and imagination of the person reading it. They should want to know more about your company, so keep it short and engaging. Although it will sit at the start of your business plan, it’s often best to write it last when the rest of your plan is in place. This will help you to focus on what’s important. Generally speaking, the executive summary should include the name and location of your business, the services and/or products you offer, your vision and mission statements and the purpose of the plan, e.g., to secure funding or investment or to set out your strategy. If you are applying for a business loan, it’s best to compare as many options as possible to ensure you’re getting the right option. Websites like www.biz2credit.com/ are a great place to start.
2. Your Company Description
The company description explains what the business is, what the goals are, and how it operates. This will usually include its legal structure, its history, the demand it will meet, an overview of services/products, who your customers and/or suppliers are, any growth already achieved, your business objectives (long and short term) and where profits will come from.
3. Description of Services and/or Products
When describing the product or service you’re selling you should focus on the benefits offered to customers, why your product or service has a place in the market and how it improves on what is offered by competitors. You should also specify information about suppliers and costs and what net profit our expect from sales and any relevant patents or copyright information. Learn how patents can help increase your profits and prevent your competition from copying your products or services here.
4. Your Market Research & Analysis
You should have already completed detailed market research, and it’s important to show your analysis and key findings in your business plan. This may include your target audience by demographics and customer segmentation, an overview of the sector with statistics, an evaluation of your competitors and their strengths and weaknesses as well as historical and projected marketing information for your service or product. You can include detailed statistics in an appendix.
5. Sales and Marketing Strategy
You need to tell the reader how you will promote your business and sell your products, what it will cost, the processes and logistics involved, labor and employees required, operating hours and where the business will operate from. This should cover the whole lifecycle of the product from sourcing supplies to delivering to the customer.
6. Your Financial Projections and Plan
When you’ve completed your market research and analysis, you should work in collaboration with a professional accountant to include several aspects of financial information. This should include any historical financial information such as balance sheets or income and cash flow statements, forecasted income, and expenditure as well as projected turnover and profits.
7. Your Company’s Organizational Structure
Your business plan should also illustrate your company’s organization structure, including owners, directors, managers, departments, and employees. You should include the names of owners, and what percentage of the business they own, how involved they are in the company’s operation and their relevant skills and experience. If you have any advisors such as attorneys, accountants or board members you should include these too.