Wondering if you need a business plan and why? Well, this is an outline of the importance of a business plan and the key aspects to consider in writing a business plan for a startup business. A business plan is a compass to your business because it gives you structure and helps you evaluate all aspects of the economic viability of your new business venture. Preparing and maintaining a business plan is relevant to any business regardless of size and nature. Do you need a successful business? I believe your answer is yes, so follow the following quick steps to come up with a working business plan.
Executive summary comes immediately after the title page. This is mostly what potential investors read. It tells the reader what you want in your business. The executive summary describes a brief outline of the purpose and goals of the business and should clearly elaborate what you are asking for but in a summary. An executive summary should include the following;
– A brief description of services and products
– A summary of the market analysis
– Experience and background information
– Explain to the reader the decisions that led you to start the business and the gap in your target market and how your business can fill it.
– Summary of the objectives
– An overview of any funding requirements
The Executive Summary should typically be one to two pages.
The company description is the basic introduction to your business. A Company description should include the company’s name, it location, business structure, ownership and management, company’s objectives, competitive advantages. Other key aspects to include in the Company Description include; a description of the nature of the business, explanation of how your products and services meet the needs of consumers, a list of particular customers that your company will serve.
This section should illustrate your knowledge of the market trends and growth rate of your company’s location. An excellent market analysis allows you to gather valuable data that will help you understand your customers, determine appropriate goods pricing and understand your competition and how to be better than them. Some of the key features to include in your market analysis are;
– Industry description and outlook- Discuss the current state of your industry and the future of the industry. Include relevant metrics such as size, trends, life cycle stage and any projected growth. This shows that you understand what you are doing and have done a research.
– Target market- In this section, you should consider factors such as; growth rate, primary competitors, market size, and general outlook and trends for the market.
– Competitive analysis- Identify your competitors in line with your business. It is good to have and understanding of what you are up against and also to know their weaknesses. The competitive analysis should include the following; competitor strengths and weaknesses, market (how big is the market for goods and services), window of opportunity, barriers to entry, market share and possibility of any secondary competitors.
– Pricing and gross margins. You should define your proposed prices and any discount you plan to give.
Service/ product line
In this section, you describe your products or the services you are providing. It includes the following;
– Description of your product or service. Include a list of all your products/ services that your business will offer. Include the price and description of each product/service. Also, talk about your product/service and their ability to meet the needs and your advantage over the competitors.
– Products/ services life cycle.
– Intellectual property. List any existing, pending, or any anticipated copyright or patent filings.
Operations and Management Plan
Operations and management plan highlights the logistics of the company such as various responsibilities endowed to the management team and all the tasks assigned to each division if any.
Include any funding needed to run the business. It should include the following; your current funding requirement, any funding requirement in the future, you intend use of the funds, financial plans for the future and the amount you need now and in the future.
Financial projections section includes a prospective financial data where you explain what you expect to have achieved within the next five years. Include an analysis of your financial information. The financial projections may be provided in series of projections and estimates that the business anticipates to reach after each financial year.
An appendix should be included with the main body of the business plan with the following aspects: product pictures, letter of reference, licenses, legal documents and any contracts.