The business plan is often the most important part of any startup venture because it’s the document that you’ll use to tell investors and banks what your company will do, how it will make money, and why they should fund you. With that in mind, here are 10 things you absolutely need to include in your business plan if you want it to be taken seriously.
1) The Introduction
It’s always a good idea to include a brief introduction that sets out why you’re starting your business, who you are, and what your company does. You should also explain how you plan on making money and (if applicable) how big you think your market is. If someone doesn’t know anything about what you do or how it works, they need to be able to glean that from your intro; it should make sense even if it reads like a fortune cookie.
2) Market Research and Competitor Analysis
Every good business plan needs a solid foundation of market research and competitor analysis. What’s your business idea? Do you have a good understanding of who will be willing to buy from you, what they want, and how much they’ll pay for it? Are you familiar with all of your potential competitors, their advantages, and disadvantages? Are there any potential changes that might disrupt or hinder your company’s success (economic trends, competitive moves)? How are people currently solving their problems or attaining their goals? These are just some of the many questions you’ll want answers to before developing your business plan.
3) Target Audience
New Business Owners, Startups, Entrepreneurs, and C-Suite Executives interested in reviewing or creating their own business plans. It’s important that you understand your audience so you can speak with them on their level. If your writing is too technical, they may not grasp what you’re saying and if it’s too simple they may find it lacking. When speaking to an audience, it’s always best to use words that they understand while delivering a message that they want. Speak their language by explaining unfamiliar terms while communicating effectively with them by using words and phrases that appeal to them or are unique only to your brand.
4) Information About the Business Owner
A business plan is a comprehensive, formalized description of how your business will function. Every entrepreneur should have one, but it’s equally important for each member of your team to understand why and how you’re trying to build a new venture. In short, everyone should be familiar with your business plan; if someone on your team lacks knowledge about what your company plans to do or how it intends to accomplish its goals, it may be time for a meeting. Since your organization is only as strong as its weakest link, getting all employees up-to-speed on company strategy is critical.
Investors want to know your business is profitable before they invest any money. Be ready with detailed projections, financial statements, and a cash flow forecast. Investors will also want to know if you have a plan for future growth and increased profitability so be sure to provide thorough documentation of your strategy (SWOT analysis anyone?). Finally, include an estimate of how much it will cost you to bring your product or service to market including marketing, development, and overhead costs. One thing investors are not looking for are high-flying valuations or lofty earnings that seem far out of reach—it’s important they understand what it will take you to get there as realistically as possible. Make sure you factor in time and marketability too!
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6) Marketing Strategy
No matter what type of business you’re starting, you need a marketing strategy. It doesn’t matter if you have money coming out of your ears and your family connections are so good that you can open up a store on Rodeo Drive—without a viable marketing plan, no one will know who you are or what it is is that you do. If they don’t know who you are or what it is that you do, how will they patronize your business? Put simply: Without a concrete marketing plan in place, no business can hope to succeed. Creating a useful marketing strategy means having both long-term goals and short-term goals for how to achieve them.
7) Product or Service Information
Describe what your business is going to sell and why it will be successful. The goal of your business plan is to convince investors that your idea has legs—that it isn’t just a novelty or flash-in-the-pan idea, but that there is a growing market for what you have. Use facts, statistics, and testimonials from real customers to show how many people want your product and how much they are willing to pay for it. If you haven’t started yet, describe how consumers can reach out via social media or traditional marketing channels (i.e., TV ads) for more information about when and where your product will be available.
8) Operations Management Details
Details like staffing, goals, and financials—they’re all part of a well-rounded business plan. While you don’t need to hit every bullet point on our list, make sure that any major issues are addressed. If you don’t have all of your details down now, you’ll surely figure them out as your business moves forward. A good rule of thumb is not to wait until things get tight—that’s when mistakes happen. For example, if you wait too long to hire more staff or purchase new equipment; customers will go elsewhere while profits will suffer. Keep up with industry trends: That way, you can stay ahead of any changes and capitalize on emerging opportunities—or mitigate problems before they start by preparing early on.
9) The Legal Stuff (Ownership, etc.)
No matter how much you plan, your business will change. If you want your company to grow and be successful over time, anticipate that your plans may need to shift along with those changes. Keep an open mind about adjusting your strategy as you move forward. In today’s uncertain economic environment, it’s never been more important for business owners—both large and small—to remain flexible and proactive about their options going forward. In any case, if you follow our advice in these 10 tips for business plan success and remain diligent throughout each stage of planning and development, you’ll be much more likely to avoid any issues with financing or feasibility that might have prevented success from ever happening in the first place. Good luck!
Writing a business plan can be overwhelming. With everything you need to take into account, it’s easy to feel like you’re stuck on step one for days, weeks, or even months on end. The good news is that most plans aren’t set in stone. They’re guides—ways of helping you think through your idea and get as many of your questions answered as possible before taking action. The time and energy you spend thinking through your idea now will pay off when it comes time for actual execution later on. Save money: Businesses operating within startup costs are much more likely to succeed than those that don’t set aside funds ahead of time.