A business plan is not just a document you need to apply for business funding. If properly understood and implemented, it is the road map to your success. A good business plan should be reviewed and updated at regular intervals and will help you navigate the business through various challanges and pressure points.
The basics
First you need to decide the time period your business plan should cover. You could write a plan for 1 to 5 years.
A 12 month plan might be chosen if you want a simple overview of your business but a one year plan has its limitations. If you are writing a business plan as part of an application for business funding you will need to show financial projections and for that you would need to show a longer time frame. A 2 to 5 year plan would also allow you to include objectives that require longer to implement.
The Executive Summary
This section goes at the top of your business plan and should summarise the plan. It starts with a brief sentence describing your vision for the company followed by the method of achieving the vision. This would involve describing the nature of the business and marketplace. A sentence to describe how the business will be profitable in the short term might also be included here. It may be easier to write this section once you’ve written the rest of the plan.
Your business idea (product or service)
In this section, which typically goes under the executive summary, you would describe your business idea. You should consider this your business pitch, your opportunity to sell your idea and how it will add value by addressing a need. Try to limit this section to a few sentences.
The market
This is the section in which you describe your target market. You will want to include the size of the market and demographic information about your customers, including age range, gender and geographic location. You would also cover your competition in this section and how you will be different. What will make you preferrable to the competiton. What unique selling point (USP) do you have that would draw potential customers to you rather than the competition.
Operations
Who will run your business? You would write a short bio of the key personnel in this section starting with you.
(Your job title)
This is where you pitch yourself as a business person. The business plan may be used to draw funding from investors or financial institutions such as banks and they will want to know the business is in good hands. You would cover your skills, qualifications and experience here.
If there are any other people involved with the running of the business you would also include a short bio of each one in the same way.
If you are outsourcing for production of a product or supply of a service you would need to include details of those you are outsourcing to, what aspects of the product or service the outsourced business would supply and if you are yet to source the supplier, how you go about doing this.
Sales and marketing
Under this section you would describe how you would market your business idea to your customers. Include reference to your sales and marketing plan which I will cover in a later blog.
Procedures
Describe here how you would deliver your product or service, from initial order, taking account of time frame and budget. Think about the processes you will need in place for your customers to access your product or service.
Support and expertise
If you have access to expertise, such as a friend who runs a business or a mentor, you would mention them here.
Financials
You would normally do this section in a table format. For a brand new business this would describe the current financial position and future financial projections. You could look at this over 2-5 years but normally 3 years would be sufficient. You need to take account of expected revenue less overheads such as stock, equipment, marketing, admin, travel and expenses. If you plan to pay yourself a salary this would also appear under overheads. Your projected profit would be whatever is left once overheads have been deducted.
Reference to and review of the financial section of the business plan will help you understand how well you are meeting your financial commitments. It will raise the alarm if you need to seek more funding and support you to grow the business when you have met your financial milestones.