How to Write a Business Plan
A business plan is critical for any business to succeed. A business plan is a road map for any business to transverse the highly competitive market. Even small businesses need business plans to maneuver the competition. Consequently, you must know how to write a business plan for your business to thrive. In this article, we will teach you how to write a business plan and its contents .
The following are the contents of a good business plan.
An executive summary provides details about your business. This section should state the mission and vision statements of your business. It should give an overview of your business's experience and expertise in the industry. It provides a summary of what your company intends to achieve.
This section describes what is all about your business and what you do. It provides details about your business goals, products, services of a company, and the market the business will be serving. This includes how your business will stand out amongst other companies.
Any information related to how the business, its products, and services will benefit customers should be included. Information about patents can also be included in this section.
A good business plan should describe the market the business is planning to enter. Talk about the market needs, target market, customers, and the overall market. For this, you need to use statistics. Show how your business is going to fit in the market and how it is going to bridge the market gap.
It provides details about the competitiveness of your business. It shows the strengths and weaknesses of your business by analyzing the nature of its competition, leading competitors, primary competitive products, and services. Also, it states any threats and risks associated with the company in this section.
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Products and Services
This section provides details about the services and products your business is offering. Remember, the executive summary only gives an overview of the company's products and services. Products and services section describes your suppliers and how much the raw materials will cost you.
Sales and Marketing Plan
The sales and marketing section provides a framework on how you are going to advertise your business, its products, and services. It will show how you are going to market the products and services of your business. Also, mention the budget you will need for marketing. Have an elaborate plan that will help you get ahead of existing and established companies you will be competing with.
You should list different platforms your business is going to use for marketing and shipping methods to be used in product distribution within the market.
The management team section provides details about the legal structure of the business. This includes the top leadership, like the executive team and the advisory board. It also indicates the number of employees and the amount to be paid to each employee. Other external professionals, like lawyers and consultants, should appear in this section.
You need to provide your business' financial projections like its financial position, income statement, cash flows, accounts payable, accounts receivable, and break-even analysis. It also states the sources of funding the business requires. This could include financial institutions, crowdfunding, investors, and venture capitalists.
The ownership section states the business structure of your business. Indicate whether the business will be a sole proprietorship, a partnership, or a limited liability company. For a partnership, state the amount of investment and percentage of ownership of each partner. It also includes an exit strategy for any investor and how he will get back his money.
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The appendices appear as the last section of a business plan. It provides additional details that might be of importance to other parties like banks and investors. It can include the following information:
- Market surveys
- Press releases
- Financial statements
- Projected income statement
- Break-even statement
- Cash flow projections