A business plan is a powerful blueprint for your business. It can help you manage and navigate your company better and help your partners and investors understand your business strategy.
In order to write an effective business plan, you will need to start by covering the basics. State clearly on a cover sheet the name of your business, the address of the business and the principles that govern the business. These elements, however, are only part of what you need to include in your business plan. There are a few more essential elements to include in your business plan.
Executive Summary
The executive summary is the abstract of your business plan. It is summarises all the information you give in the body of the plan and serves to introduce potential investors to your company. Mention your company background, mission statement, goals, management overview, capital requirements, market opportunity and competitors in no more than three or four pages. Make sure your executive summary is persuasive enough to convince investors about the viability and potential of the business.
Business Overview
The business overview provides more details about your business and why the business was formed. It expounds on your business mission, strategy, model and existing strategic relationships. Clearly explain how your business was formed, the costs associated with running the business, legal structures of the business and any intellectual property you may own. You may also cover issues relating to administration, management, accounting and security in this section of your plan.
Business Offering
The business offering section details why you are in business and what you are selling. State whether you are selling products or services. If you are selling products, shed more light on whether you are the manufacturer, retailer or distributor. Talk about your manufacturing process, inventory processes and availability of materials, if you are the product manufacture. If your business offers services, describe those services in detail. Also, provide information on product or service lines you expect to venture into in future.
Implementation and Strategy
This section provides details of your business strategies. It highlights your sales forecast, products or services launch dates and expected customer or web visitors statistics. Investors will be keen to read through this section to learn about your dates and deadlines. Lay out these details in a table called “Milestones” for easier information consumption.
Marketing Plan and Analysis
Detail your marketing plans in this section. Provide information about your market analysis, customer service, sales and public relations. Showcase your business vision and highlight the key points that will make your business successful. Validate your points with market research and customer and or industry trends. If you are a smaller entrepreneurial company and lack capacity to conduct in depth market research, validate your points with testimonials from existing customers.
Management Team
Explain the backgrounds of the managers and executives in your business in this section. This is important because investors will be interested in evaluating the risks associated with your business before they invest. Generally, the experience of management teams significantly affects business risks. The more experienced the management team, the lower the risk involved.
Financial Projections
Finally, provide a clear quantitative interpretation and projection of all the information you included in the different sections of your plan. This information should ideally come after all the other sections. Include your cash flow statement for the coming two to three years, balance sheet and projected profit and loss statements in your financial projections.
Remember, a good business plan is never completely finished. Revise and build upon your plan from time to time to keep it accurate and up to date.
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