If you’ve decided to start a business, chances are you’ve heard of or have been asked to present a business plan. If you haven’t, let me help you understand what a business plan is and why and how it can help your business.
Broken down into sections, a business plan contains as much information as possible about your company, its structure, and how the business is planning to produce revenue. You can use a business plan as a guide to reaching the goals set forth by you for your company. A business plan is also a requirement should you seek out funds via a loan or investors, providing detailed information of the company’s past and current operations and providing future projections.
Where Do I Begin?
A good business plan will guide you through the managing and operations of your business, who you need to put in place, and how much that will cost. Start by answering the following seven questions about your company:
- Who are you? (Company Name and Location)
- What does your company do, or what products do you sell?
- Where do you plan on doing business?
- When are you planning to launch or how long have you been in business, and what are your past, present, and future projections?
- Why is there a need for your business, and who are you marketing to?
- How do you plan to bring in revenue?
- How much funding will it take, and where do you plan on allocating those funds until you see a steady stream of revenue?
Answering these seven questions in detail will give you a great business plan on paper and help create an efficient approach for growth by helping you stay focused on key activities, determine your future financial needs, and attract investors and lenders. A description of your business (an executive summary) gives a brief explanation of your business. There is no need to go into why you decided to do business. This description should be short and simple. The goal is to be practical, so explaining what the business is, the products or services you provide, and who your target audience is will suffice.
Define Your Competition
Research your demographic. If you are a storefront, what shops will be located beside you to promote the flow of customers to your business? If you are an eCommerce, who is your competition, and how will your business rise above the rest. Doing your due diligence research will allow you to see who/what companies are successful in your market and give you some ideas as to how you can and will do it better. In this section, you also need to map out a plan for when business is slow, and product cost rises because, let’s be real, this will happen. Having a plan will give you peace of mind, and the change in the economy will not catch you off guard. However, that may affect you and your business. Short-term goals are great, but long-term goals are smart.
Explain How You Plan To Market Your Business.
A marketing strategy should focus on the channels that fit your targeted market. For instance, if you are consumer-based, you may focus on social media platforms like Facebook, Instagram, and Twitter. If you are in the business-to-business market, you will benefit from having your social media activity predominantly on platforms such as LinkedIn. For E-Commerce business’s pay-per-click advertising may be the way to go. Whatever marketing strategy you come up with, know where your market is, how to access consumers or clients, and have a way that will invite them to act in your business.
How Will Your Business Operate?
If you are starting your business or your business already operates with a team, including the key players and their job roles and responsibilities. Your business plan is to be written as a well-thought-out strategic method of the operation of your business. Including those you put in place or plan to put in place is essential. This will allow investors to know that you have a team in place with the appropriate experience to help your business to succeed and also help you, as the business owner, to have a guide (typically known as an organizational chart) helping you and your employees understand the chain of command and their role.
Provide Your Financial Information
Lastly, you want to include your financial information. This is where having an accountant or bookkeeper comes in handy. You will want to include a balance sheet and a current profit and loss statement. This will include your income sources and operational costs such as wages, rent, and other costs. If you are a startup, your business plan should include your startup costs, the first year’s financial statement, and a cash flow budget (a future article will explain these terms). Creating a realistic projection of your cash flow will signify that you know where you are going and what it is going to take to get there. Strategy is key.
Knowing the full structure, marketing, income, costs, and plan will help you to have a successful business and will help you secure funding confidently.
