If you are thinking about starting up a business, you will need to be able to demonstrate how effective and successful it could be, especially if you would like to obtain finance for it. As a result, you should write a detailed business plan before setting up.
Most important aspects of a business plan
A business plan features all of the important information about a business, its potential market and its projections. It offers you the chance to do your research which will feed into the business you create. It also offers something for you to look back on to make sure your business stays on the right track, however long you have been trading.
Because a business plan is such an important document, it is essential that you include the relevant information within it. But what exactly do you need to include in your business plan?
- Executive summary: This should be the first page(s) of your business plan document. It should contain a basic summary of all the key information anyone reading your business plan will need to know.
- Business overview: A detailed description of your business concept and how you will work. You should include: your business’ legal structure, formation history, type of business, the location in which you will be based, your means of doing business (shop, internet), etc.
- Operations plan: How your business functions on a daily, weekly, monthly and yearly basis. You should include: its physical setup, strategies and actions you will take to achieve your objectives.
- Market analysis: An overview of the market(s) you are about to enter and a plan to capture and maintain them is advisable. You should include: type of market (toys, clothing etc.), people you will be targeting (gender, age, social class) and locations you will be targeting.
- Products and services: Detailed description of the products you will be manufacturing and selling or the services you will be offering. For each product and service type, you should provide an in-depth description for the benefit of readers and potential investors.
- Sales and marketing: On the sales and marketing side, you should include proposed pricing, where you will be selling and quantity sold, estimates based on research; also include why the market will buy your product/services. You should also include a marketing plan outlining advertising ideas and marketing strategies.
- Competitive analysis: Look at how your competitor’s strengths will affect your business and how you could gain a competitive edge from their weaknesses.
- Management team: Provide as much information as possible about the people involved in your business. You should include: their role, skills, experience and what they will bring to the business.
- Financial plan: This is one of the most important parts of your business plan where you can outline all financial information relating to your business. You should include: start-up costs, projected balance sheets, amount of money necessary to get the business off the ground, amount needed over year 2, 3 and 5 of the business, the plans for your funds and any additional funding required and all ongoing business expenses (salaries, insurance costs, promotional expenses etc.)
- Projections: Income statements and balance sheets for at least 2 years and all estimates will be based on numbers and analysis put together by yourself. They should be as thorough as possible to obtain the best chance of gaining investment for your business.
- Supporting documents: All other important information about your business that does not fit into any of the other sections. You can include: patent information, customer lists, CVs of staff you already have on board and any further information to support your business idea.
So there you have it, everything you should and can include in your business plan to give as much information as possible to your staff and any future investors. If you are as thorough as possible when putting together your business plan, you will be able to create a solid foundation on which to build your business.