Starting a business is a real challenge. Even if you have a great idea or a unique product, it will be hard to get backers or money if you don't have a well-written business plan. A strong business plan is like a roadmap that shows your venture's goals, plans, and expectations. Read on to understand what an effective business plan should include and how to make one that will please investors and help your business succeed.
Executive Summary
The executive summary is central to your business plan. It's a short outline of your whole business plan, so it needs to be interesting and straight to the point. Investors will look at the executive summary to decide if they want to read the rest of the business plan. It should include the following key points:
- A brief explanation of what the business does and what needs it meets
- Market analysis: The possibilities and problems in the potential market
- Explanation of the ideal customer and how you will reach them in your marketing plan.
- Competitor analysis
- Income and expenses for the next three to five years and your financial predictions.
Business Description
The business description goes into more detail about the company's name, legal structure, vision, and goals. This should include:
- Name and address of your business
- A short history of the business
- The legal framework of your business (LLC, corporation, or partnership).
- What kind of business you run
- The things you sell or provide
- The plans and aims of the company
- The goal statement of the company
Market Analysis
Your market analysis should be based on a lot of research and give thorough information about the people you want to reach. Investors will want to know how big the market is, how fast it can grow, and how your goods or services will help people solve a particular problem. In this part, you should include:
- A summary of your business
- How many people you want to reach
- Who your best customer is
- How things are going in your field right now
- What problems and opportunities there are in your target market
- What your competitors do well and what they could do better
Marketing Plan
The marketing plan shows how you plan to find customers and keep them. It should include the following things:
- Your unique selling strategy
- How you set prices
- Your distribution routes
- Your ways of getting the word out, like adverts, public relations, and social media
- Sales plan and how to reach customers
- How you will keep track of and measure how well your marketing works
Competitor analysis
In the competitive analysis section, you will list your key competitors, their strengths and weaknesses, and what makes your business different. In this part, you should include:
- A list of who you're up against
- What your rivals sell and how they do it
- What your competitors do well and what they could do better
- How hard it is to get into your business
Managing and running things
Here, you will talk about the people who run your business and how it works. In this part, you should include:
- The names of the people in charge
- Roles and responsibilities
- Charts of the organisation
- Job descriptions for the most important people
- Manufacturing or production processes
- Inventory, sales, and billing and details on the management systems.
Cash flow projections
The part on financial projections shows how much money you expect to make and how much it will cost you over the next three to five years. In this part, you should include:
- Your estimates of how much money you will make based on market study and assumptions
- Cost of sales
- Your business costs
- Your marketing budget
- Plans for cash flow
- Estimates of profits and losses for the next three to five years
The bottom line
Writing a business plan can be challenging, but it's an important step in starting a business. Your plan should be well-researched and thorough, giving investors a clear picture of your business idea, strategy, and financial estimates. If done well it will really help you grow and succeed, so spend the time and money required to make a strong business plan. Once your business is up and running, after about 12 months of trading, Merchant Capital can help you take your business to the next level with fast and effective funding. Get in touch with us to learn more.
