A business plan is a roadmap of your business’s future that prescribes how you want your business to operate in the foreseeable future. More importantly, this plan will clearly tell you what steps to take and how to take them in order to take your company where you want to go.
Stever Robbins, a venture coach and Entrepreneur columnist says that you can use a business plan to “monitor progress, hold yourself accountable and control the business's fate. And of course, it's a sales and recruiting tool for courting key employees or future investors”.
A business plan is essentially your business strategy. All people who are going into business will need one, from startup entrepreneurs to owners of established firms seeking help.
Here are a few handy tips on how to successfully write a concrete business plan:
Before Writing your plan…
Before you put pen on paper and start drafting your plan you need to assess your business’s goals and objectives. Envision where you want to be in one, two or even more years. Will you be running a business that hasn’t grown substantially in size? Will you own a rapidly growing colossal empire? Will your company expand globally? Determine your goals first and then outline your financial needs.
Writing Your Business Plan
Now that you have done your homework and collected all the necessary information you need to create a solid business plan, it is time to start constructing it. Here is a proposed structure:
Company Analysis: Define what products or services you offer now and what you plan to offer or exclude in the future. Each of the choices you make in your business description will affect the amount of money you'll need to start or expand, and how much sales revenue you can expect.
Industry Analysis: Figure out the situation regarding your market and how these change over time. Identify the key trends that affect them and determine whether these trends bode well for your future success.
Competitive Analysis: Define who your major competitors are and what are their key strengths and weaknesses. In what areas will you have or gain competitive advantage? How?
Customer Analysis: Identify the demographic and psychographic characteristics of your target customers. Make sure you spot their major needs and describe how you will respond to their needs.
Marketing Plan: Make a list of points outlining how you will reach your target customers. Identify the best promotional tactics and marketing channels to target them. In addition to this, decide on your pricing strategy for your products or services as well as what brand positioning you desire for each.
Management Team: Define who makes up your current management team and what key hires you must resort to so as to execute on the opportunity in front of you. Will you build a Board of Advisors or Directors, and if so, who will you seek? Besides, what responsibilities will the management team have?
Operations Plan: The operations plan aims to describe how the business will function in the long run. Design your action plan. Determine the milestone you want to achieve in order to go from where you are now to where you want to be at certain points in time.
Financial Plan: Financial data are as important as the business concept and decisions regarding the management team. Determine whether you will need external funding to build your company, and if so, how much. In what areas will these funds be invested? It is also important to decide on what are your expected revenues and profits over the next one to five years as well as specify what assets you must acquire.
These are the eight key business plan sections that if addressed well, will prompt others to invest or otherwise help you build a successful business. You need to clearly demonstrate in every section your strategy and the reasons why you will succeed. A business plan is an indispensable ingredient to significantly increase your odds of succeeding as an entrepreneur.