Business plans are written documents that are essential for a successful business. To put it simply, the purpose of the plan is to outline what you want to achieve with the business and how you will do so. Putting the goals and ideas for working towards them on paper provides a document to refer to throughout the year to identify how much you have progressed. However, with it sounding so formal, it can seem like a daunting task, so follow this guide to make progress with your first draft.
The Aims of a Business Plan
- Develop ideas
- Highlight plans for growth
- Identify strategies
- Consider long-term changes
- Calculate the budget and financial targets
- Discover business priorities
- Problem-solve potential issues
What to Include in a Business Plan
There are seven key sections that are required in a business plan, and these address major areas of business management and detail the above aims of a business plan. The sections should include:
- An Executive Summary
Briefly explain the business and what will be set out within the document, highlighting key points to be addressed. Identify the problem being solved, the audience being targeted, and key financial information before delving into the following areas.
- A Business Description
This section should be much simpler than the others. Consider the purpose and values of the business and get writing about it. The business description should elaborate on the industry the business is in, the target market, and the manufacturing and distribution that takes place in relation to the business.
- Details of Market Strategies
To expand on market strategies, doing research on the demographic of the target audience is required. In view of relevant statistics, decide how is best to reach out to potential customers. A market strategy should cover the 4 Ps (product, promotion, price, and place) to sufficiently cover all areas. Keep in mind budget limitations.
- Competitor Analysis
A significant factor in the success of a business is the relationship between competitors. Identifying direct and indirect competitors can allow further research to be done for the purpose of highlighting strengths and weaknesses. In doing so, this can encourage problem-solving to avoid issues further down the line.
- A Design and Development Plan
The purpose of this section is to describe the design of the product/service offered by the business as well as how the company and its production and marketing can be developed further in line with budgetary constraints. Scheduling, costs, personnel, and risks can be detailed in this section. For instance, planning to implement recruiting software to find employees that can assist in the development of the business.
- Business Management Plan
A successful business does not exist without strong management. Utilize this section to formalize the business management structure and operations, noting how this will impact the development goals. This can include staff and resources that will support the running of the business.
- Financial Considerations
Finally, it is necessary to establish whether the business plan is sustainable. Creativity is great in recording business aspirations, but being realistic about affordability helps to keep finances on track. This section should be broken down into a cash flow statement, income statement, and balance sheet. Costs should be calculated, profits should be forecasted, and other monetary predictions must be made to determine the feasibility of the business plan.
While working on a business plan for the first time might appear to be intimidating, you will find that it flows naturally once writing has commenced. If it consists of an executive summary, a business plan, details of market strategies, a design and development plan, a business management plan, and financial considerations, the business plan will be effective.