There are certain steps that a potential entrepreneur must take before they start a business. A business plan is one of the unwritten requirements for starting a business. After assessing and concluding that the business idea is solid, here’s why drawing up a business plan is next. A business plan:
Now let’s look at the key components of a business plan to help you get started.
The executive summary is the first section of the business plan and requires the most time to craft. It is also the last section that you’ll write. This is because you recap all the sections of the business plan here.
Whether your business plan is 2 or 20 pages long, it is vital that you give this section all the attention as it is what determines whether potential investors will read the whole plan or not.
Introduce the idea for your business, give background, discuss methods and metrics, and how you plan to succeed as a business. Get people excited about your business.
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Reaching new clients can be a challenge when you're new in the market so your marketing plan should provide an analysis of the market as it stands, an analysis of your competition and how you plan to be ahead of the competition. The SWOT approach is widely used for a reason, it works. Basically, it documents your competitors’ strengths, weaknesses, opportunities, and threats. From here you gain the ammunition to disrupt the market.
Write down how you plan to reach new clients while also touching briefly on the sales and marketing plan budget, which the financial plan section can cover in depth.
New businesses rely on the reputation of the owner(s) before they can build their own track record. This section of the business plan assures potential investors that they're making the right decision by choosing you.
Write a bio of each of the key players in your team, highlighting industry experience and leadership qualities. Should your key players lack experience in some areas, mention any training or upskilling plans or additions to the team with said expertise.
Once every detail of the business plan has been written out, then the financial plan should conclude it. This is because it all boils down to money making everything in the business plan feasible.
From how much you'll need to start the business to balance sheets, you need to include all financial information, you don't want to undersell anything as this could backfire in the long run.
Financial plan outline:
We’ve looked at the primary purpose of a business plan, which is to establish your business plans for the future including goals, milestones and detailed steps of how the business will reach each step.
This article only covers some of the key components of a simple business plan. You may want to include an operations plan, legal structure, vision, mission and values. These will vary from business to business.
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