How to Build Your Business Plan
Whether you’re starting a new business, repositioning your existing business, or targeting outside investors, getting a clearly detailed business plan can make the journey to your business goal easier, faster, and less costly.
Creating a business plan is one of the most important steps you will take because your detailed business plan serves as your road map for your business. Your business plan tells you what you need to do and how to do it in the right way. It is a written description of your business’s future, goals, vision, objectives, market opportunities sales and costs, milestone and how to achieve your yearly milestones and targets among other things.
Is very important you have a business plan because your business plan will not only serve as a road map that guides you to achieving your goals, it can also be used to get loans or grants.
Writing an investor-grade business plan can be challenging and time consuming, even for those who have done it before. If you are a typical entrepreneur, you’re already too busy focusing on other priorities, such as building your customer base, perfecting your product, or recruiting key management.
Engaging a professional to write an investor-grade business plan can be too expensive especially start-up or aspiring entrepreneurs that do not have enough fund to do this. If you are a typical entrepreneur that believe you have what it takes to write a standard business plan or you can carry out some researches to ensure your business plan is professionally written and you need some guideline to come up with a professional business plan, this article will really help you and guide you on how to write a professional business plan. If you have the fund, I will advise you engage a professional to help you do this.
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What your business plan should include
Below is business plan outline or business plan format for you to follow to prepare quality business plan:
- Company name, address and other contact details.
- Non-disclosure statement
- Table of Contents
- Executive Summary: This is easier to do after rest has been completed. You do this last. Your executive summary should include:
- Summary of business, when formed etc, and what it does
- The objectives of the business plan
- The personnel involved in the business
- The market the business is aimed at and how much this market is worth / what % the
- business expects to cover
- Any development plans
- Financial summary – showing sales in 1st year, gross profit margin, fixed costs, and
- expected month of break even
- Funding – how much required / received so far.
- Company Overview/Business Description: this includes
- The business idea (what the business will be and why the legal trading format was chosen)
- Mission Statement
- History and Current Status
- Markets and Products: few information on the market and the products
- Objectives: You need to state the objective of the business
- Keys to success: What are the key success factors?
- Start-up cost Summary: here you mention the startup cost summary/cost of starting or expanding
- Product or Service description:
Description (range of products / services) include price list in appendices x Distinctions – why are you different?
Products / services development strategy.
- Industry and Market Analysis
- Industry analysis: write about the industry
- Market analysis: write about the market segments
- Customer analysis: write about the customers, the size, group etc
- Competitor analysis: who are your competitors, write about them and your competitive advantage
- SWOT Analysis: carry out SWOT analysis to define your strengths, weaknesses, opportunities and threats.
- Marketing and Sales Strategy:
- Target Market Strategy: how you will find customers
- Product/Service Strategy
- Pricing Strategy: What will be the pricing strategy to sell and still make profit? Will there be promo, discount etc
- Distribution Strategy: Channel of distribution and how to reach them
- Advertising and Promotion Strategy
- Sales Strategy: Sales methods (face-to-face / internet / telesales etc)
- Marketing and sales Forecasts: Include your marketing forecasts
- Operations: operation strategy can include the following
- Operations Strategy
- Scope of Operations
- Operating Expenses
- Premises (now and in the future)
- Production facilities
- Business systems
- Training requirements
- Development Strategy
- Development Timeline
- Development Expenses
- Company Organization
Management Team: Brief description of yourself (CV in appendices may be useful) and role of key personnel,
- details of roles
- Administrative Expenses
- Reporting structures
- Advisers to the business
- Company Organization
- Summary of Financials
- Financial Assumptions: Explanation of assumptions used to produce P&L account
- Financial Forecasts
- Projected Cash Flow: Detailed forecasts for twelve months and Summarised forecasts for years 2 and 3, 5 or 10
- Income statement
- Balance sheet
- Profit and loss
- Profit Margin, chart etc
- Financial Risks: Explanation of what could go wrong and how you would overcome it
Support for Product/Service Description (e.g., diagrams, pictures, etc.)
Support for Marketing and Sales Plan
Support for Development Plan
Support for Operations Plan
Resumes of Management Team
- Income Statement [up to 5 years]
- Balance Sheets [up to 5 years]
- Cash Flow Statements [up to 5 years]
- Ratio Analysis [up to 5 years]
- Other supporting financial statements.
Looking at the outlines above, creating a business plan is one of the most important steps you will take because the plan serves as your road map for the early years of your business. The business plan generally projects 3-5 years ahead and outlines the route a company intends to take to reach its yearly milestones, including revenue projections. A well thought out plan also helps you to step-back and think objectively about the key elements of your business venture and informs your decision-making on a regular basis.