Have you finally come up with a great business idea? That’s great! Do you know that there is one thing you really need to do before launching your business? Some may say yes and some may wonder what it is. It is writing a good business plan. This will be a great help for you to run and grow your business. It is also your roadmap that leads you to your success. But how to write an effective business plan? In this article, you will find out why writing a business a plan is necessary, then you will learn how to write it perfectly.
A Business Plan is a document covering a detailed information about a business. It includes a description of products or services, the structure of the business, its funding, its financial projections and many other details.
Why is a Business Plan useful?
First, a business plan shows what makes a business reasonable and have every chance to succeed. Writing it is very necessary for many reasons. It will be a great help for you to:
- Get your ideas clear and focus on them: it allows you to establish all of your future plans, which are your goals and the steps you will take to achieve these goals.
- Communicate your vision to potential investors and banking: if you are able to sell your company to them and show in your business plan how you operate your business, you will surely get them persuaded to collaborate with you and get funding as well.
- Attract prospective employees: With the growth of your business, you will probably need executive talent. Your business plan is a great tool to attract them.
What to Include in it?
In fact, there are 7 common sections that should be included in a business plan. So, before writing it, you need a well-structured and detailed outline about what you are going to put in each section.
- Executive Summary
- Description of the Company
- Analysis of the Market
- Products and Services
- Marketing Plan
- Financial Plan
- Management Team
This is the first and the most important section of a business plan. As it is a summary, it should evoke the key points you have got while writing your plan. In addition, it has to provide readers a persuading overview of your business. Therefore, you need to highlight the following things:
- What is your business and what are the goals and vision?
- What product do you sell and what sets it apart from others?
- Who is your target market and how are you going to reach them?
- What is your Financial State currently?
- Who are your team?
Description of the Company
This next section focuses on who you are and what you plan to accomplish. Hence, the core of your business and your vision. So, it should include clear and concise details about:
- the history of your business
- the structure of your business and your industry
- your financial goals
- the business objectives (short-term and long-term ones that are S.M.A.R.T: Specific, Measurable, Attainable, Realistic, Time-bound)
Analysis of the market
This section is the key of your business plan. Therefore, it should contain an explanation of the market need along with how your offers satisfy this need. In other words, you need to ensure you have made the right choice about the market for your products. This means the market where you get a lot of customers needing your products. To do so, you are required to do some research on:
- your customer profile: who you are targeting
- industry statistics
- competitive analysis: you need to examine the strengths and weaknesses of your competitors.
Products and Services
In this section, you have to describe in details what products and services you offer. It can be, for example, the cost of each piece and how your customer will buy it. Moreover, you should explain what benefits your customers get from using your product. You need to show what differs your product from others and what sets you apart from competitors. You can also talk about the product lifecycle.
Here, you have to provide a full description of your marketing and sales strategies. Thus, you aim at describing how you will get the attention of your customers and keep them. In fact, most of the time, it is where the 4 Ps come:
- Price: the cost of your products and the reason of your decision
- Product: what you are selling and what differs it from others
- Promotion: how you will provide your products to your ideal customers
- Place: where you are going to sell your products
Even though your business idea is a great one and you have put much time, money and effort in it, it will be in vain without financial feasibility. So, you should write important financial statements such as:
- past historical financial data
- budget forecasts ( future)
- analysis of financial data
In this part, you have to give information about the people running your business. It includes the owners, the employees, the advisors, board members, etc. Therefore, you need to build an organizational chart describing this information and the departments as well. Actually, this will help anyone to decide if they will invest in your company or not.
Here we come at the end of this post. I hope you understand now how useful writing a good business plan is and how it gives you a solid fundation of your business. A last one thing, remember to keep it short, clear and concise.
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