As essential for a small business as it is for a hefty multinational, the business plan is one of your most valuable business tools, and acts as your recipe for financial success.
A well-crafted business plan serves many objectives. These include:
- Setting goals and outlining the plan of action for the business
- Determining whether the business is likely to succeed
- Providing the business owner with insight with regards to performance benchmarks
- Projecting the value of the business to advisers, customers, investors and staff
When putting together a business plan, consider who will be reading the plan and what information they will deem relevant. Outline then review your plan thoroughly before writing it, and remember that your business is a constantly evolving entity, which means that your business plan needs to be updated on a regular basis.
Business plan templates can be downloaded from various websites including Business Owl, but the basics are universal. Whether you choose to follow a prescribed template or decide to go it alone, make sure that you include the following 10 essential points in your business plan:
1.Executive Summary and Table of Contents
The executive summary serves as a succinct overview of the business plan, and is generally between one and three pages long. In this précis, key points are highlighted so as to give the reader a feel for the direction your business is taking. Even though this section is presented at the beginning of the plan, you should write it only once you have completed the rest of the plan so that emphasis is placed on the most relevant points. The table of contents is merely a list of what is to follow in the business plan and does not need to include any detail.
2. Personal Information
This section of the business plan outlines detailed personal information regarding each of the business owners. Include basic details such as name, address, contact details, marital status, spouse’s details, personal references, relevant employment history, and details regarding finances, property, assets, liabilities, life cover, banking details and income.
3. Description of The Business Venture
All relevant details pertaining to the business are covered in this segment of the plan. In most cases, these points include (but aren’t restricted to) the name, address, logo and type of business, registration details, aspects of ownership, history of the business and information regarding relationships with creditors
4. Mission & Vision Statements
If there’s a place for passion in your business plan, this would be it. Your mission and vision statements incorporate your short-term goals as well as the crux of how you see your business developing and faring in the future. This strategic planning facilitates making decisions on allocation of resources and gives interested parties a better understanding of your commitment to the project.
5. Market Analysis & Activity
Of critical importance, the market analysis portion of the business plan must demonstrate that you understand the market and know your place within it. In this category, you must discuss customer needs and behaviour, the trends in the current market that relate to the relevant field of business, as well as who your competitors are and how they will react to the emergence of your business in the marketplace.
6. Product and Service Information
Here’s where you get into a bit more detail. Expand on your fundamental products and services, how they will be developed, their unique selling points (usps) and the potential for future growth. Make sure you don’t leave out any specific details that investors will find relevant to their decision-making process.
7. Business Operations
The nitty-gritty of the business plan, the operations section will outline the logistical aspects of the business, including all issues pertaining to premises, machinery, equipment, vehicles, staff, stock, sales and finance. Ensure that you do your homework before completing this section and that all projections are accurate.
With a focus on the bottom line, investors and other relevant parties will analyse the funding segment of your business plan very carefully before making any commitments. Disclose all matters relating to the source and application of funding, including own contributions, overdraft facilities, outside finance and banking details.
9. Financial Data
If analysts are going to go through any part of your business proposal with a fine-toothed comb, it’s this one. A vital ingredient of a healthy business is good cashflow, so sharpen your pencil and make sure that your projections are correct. Include all historical financial data for the past 3-5 years as well as prospective data and forecasts for a big-picture view of your company’s future prospects.
10. Confidential Information
This information is not for everyone’s perusal so is best kept separate from the business plan itself. Items that can make up this documentation include detailed information about products, contracts, marketing studies, cvs, offers to purchase and published information.