Business Plans: How to Write a Business Plan
Here are a few pointers for writing an effective business plan.
In today’s highly competitive business environment, a business plan is an essential document for any individual or company that is involved in business and requires, for some reason or the other, to find investors, to raise money, to give reasons for their actions, or just to chalk out their plan of action in a methodical and businesslike way. By writing a proper business plan, you will be able to project a good image, and thereby get what you are seeking.
Before starting to write a business plan, you will first need to gather all the information you can about your business, such as:
- What the objective is of your business
- The details of your management
- All about the market your business is in
- Your plans about production and selling
- A detailed financial analysis
- What your time schedule is
- Your backup plans in the event of things going wrong
Once you have collected all this information, you will next have to determine whom the business plan is going to be addressed to. For instance, will it be addressed to an investor, a bank, a potential buyer, a funding source, your own company, re-organizers, or just for yourself? Once your target audience is decided, you can begin writing your business plan.
Given below is a standard structure of a business plan, with all the sections that you will require:
Executive Summary
This needs to be a separate document, apart from the main plan. It should be kept short, containing just 2-4 pages. However, it needs to be comprehensive, highlighting all the information given in the main document. Make sure that it contains your statement of mission, summarizing briefly all the points of the main plan, along with ending with a brief, convincing summary about the success of your plan.
Description of the Business
Here you should provide a profile of your company. You should describe about the sector of business you are in, and can also include new products, services, or any other important information that will corroborate the rest of the plan. Also, include reliable forecasts of the industry, and if you give any numbers or data, see that you also provide references about the sources of your information.
Products and Services
In this part of the business plan, you will need to provide specific information about your business, like what you produce and sell, or what services you provide. You need to make a comparative analysis of your competitors, showing your advantages and the benefits of your products or services. If you are into something new, mention it here.
Management Details
Here, information about the organization of the company and the key personnel should be provided. Explain what the functions are of each person in the organization, stressing on your experience and strengths. If expansion is on the cards, give a description of it here. Explain clearly the goals of the management.
Market Analysis
This section should be about: the customers who buy your products or services; where they are based; what your market share is; what are the opportunities that exist; what the competition is like, and if you are different or better; and if you can fill a niche. Also include the characteristics of the market, such as whether it is emerging, or growing, or is stagnant, and whether there are impending or recent changes, along with what the likely effects of that will be.
Marketing Plans
Explain what marketing plans you are planning to carry out. Although there is no set format for this, you need to support any claims you make.
Production Plans
If you produce something, you need to explain how you are doing it, providing all the financial details. Likewise, if it is services you provide, you will have to give all the relevant details.
Financial Plans
In this section you will need to give all the details of cash flow, profit and loss statements, expense and income statements, the future financial projections of your business, and also include whether you are looking for money. Provide graphs as a summarization of the detailed figures given in the appendices. Also provide explanations of any assumptions or calculations you may have given. It is best to take the help of an accountant if you do not have enough financial expertise.
Time Schedule
Here you will need to provide the time schedule wherein you plan to implement your plan, along with mile posts.
Contingency Plan
In this section you will need to describe what your backup plans are if things should not go according to plan. Keep in mind who the target of your business plan is. If it is lenders or a bank you are addressing, they will want to know how they will recover their money if your business plan does not work.
Summarization Statement
Similar to the executive summary, the summarization statement should spell out all the conclusions comprehensively. You need to be convincing, keeping in mind your audience. In order to be convincing, you will have to be convinced yourself. If you are not convinced, then it is unlikely anybody else will be.
Well, these are the basics you need to include to make a good business plan. If you follow this format, you will create a document that will be both effective and useful, which you can use to make a success of your business.
| By Rita Putatunda |
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