A business plan should always be the starting point for getting your company off the ground. Look at it as a roadmap for what you want your company to achieve, and how you plan to get there. It will not only provide you with insights into how you should go about running your business. It’ll also provide potential investors or lenders with information on how likely the business is to succeed. Not all business plans will look the same—some will be longer than others, and some will need more details in certain areas. It will all depend on the type of business you want to build, and the industry you’ll be operating in. Your need for external funding will also determine how in-depth and specialized your plan needs to be. Regardless of the purpose, size, and scope of your venture, there are some key elements that you should always include in your plan. These include:
The Executive Summary
You must be able to describe your entire concept in one clear, concise sentence, and this is where you’ll start your business plan. Think about what you would say if you only had five minutes to pitch your idea to the most important investor of the entire project—this should be the start of your executive summary. After that, you can include the highlights of what’s to come in the rest of the plan. Give a brief overview of the market, your competitors, and how you plan to differentiate your business. The bottom-line figures for your financials are also important here. It’s usually easiest to write the rest of your business plan first, then come back to this summary.
A Description Of The Business Structure
The next part of your business plan should give the person reading it a solid idea of what the company actually does, and how you do it. Go into detail about the products you sell, or the services you provide, including any details you already have about manufacturing or procurement of products or supplies. Make sure you include the value proposition for your customers. This is essentially the pain point that you solve with your product or service—why people will want to pay you for what you’re offering. This will help investors or lenders see the value in your company. You should also include the structure of your company, including who will work with you as partners, or for you as employees. If you don’t know who these people are yet, you can just say that you will need a certain number of staff to operate properly.
Your Market Research
To be successful in your industry, you need to understand your market. You must know who you’re selling to, what kind of competition there is, how the market has been behaving in terms of customer numbers and sales figures, as well as where you forecast that market to be heading. It’s important to show how your company will fit into this particular market, as well as how you plan to break in your marketing strategy (but more on that later). When it comes to your customers, you need to look at exactly who they are. Detail your ideal customer in terms of age, socio-economic bracket, profession, location and gender. All of this will show you how your offering relates to them, and how to sell it to them.
A Competitor Analysis
Unless your idea is 100% original (which very few ideas are), you’re going to have some form of competition. This is not a bad thing, but it’s something you need to analyze to give your company the best possible chance of breaking into the market. Start with your direct competition—who is offering the same thing as you and operating in roughly the same area as you plan to. Next, draw up a list of indirect competitors. These are the businesses that are directly in your area, but not offering exactly the same product or service as you (e.g., restaurants that serve different cuisines to what you’re planning on offering). When analyzing these businesses, look at who they target as customers, how they advertise their business, what you think they do well, and what you think they could do better. These elements will help you set your business apart when you open.
Any business plan template that’s for investors or lenders will include a section for biographies of those who will drive the company forward and fill key roles. This includes you, any partners you have, and any management-level employees. Make sure you include their expertise and work history, as this will inspire investor confidence in the team that will run the company.
A Marketing Plan
As part of your market research and competitor analysis, you should look at the advertising that others are doing, and the advertising your target market responds to. With this information, you can build a strategy for how you will market your business when you’re ready to launch. Don’t forget to include the budget you’ll need for marketing. This should include any PR events or launch campaigns you need to run, as well as advertisements that will be made for television, radio and online.
Finally, you need to look at the figures. Cover as much as you can, but keep it based on facts and cautious projections. Investors or lenders will want to see the potential value of the company and that you have a steady plan for getting there. Make sure you cover all your expenses—manufacturing, purchasing, rent, payroll, and marketing. Also look at reasonable prices for what you offer based on your market research, and your competitor analysis. You can then make projections about how long it will take you to become profitable, as well as the numbers you’ll need to sell to reach that magic mark. Every good business starts with a plan. A business plan is the key to turning your idea into a working venture, and that venture into a profitable, successful company with room for growth.