Imagine you’re planning to build a house. Would you start building it before laying down all the necessary tools and materials on paper and calculating the total cost of it? The process is similar with a business startup. Before you start producing or providing services, you must create a business plan. The business plan is really your company’s framework. It contains the company’s goals and predicted ways for achieving them. They are crucial for keeping you on track.
Business Plan Length And Complexity
When creating a business plan that will project 3-5 ahead and outlining the route on which you plan to take your company on, you must pay attention and work through every aspect of the business. If the service or product is not overly complex, the business plan does not have to be that complex and lengthy. Its complexity, thus, depends on your specific goals.
What happens when you do not have all the funds needed for launching the business? You find ways to attract investors. Investors will invest their money in your business idea only when they see that it will start bringing profit at some point in the future. Therefore, when designing a business plan that you are to show to potential investors, you must be prudent and not rush into anything, but think everything trough rather thoroughly. The difference between a cosmetics shop business plan and a plan for a waste oil recycling and biofuel production facility.
Essential Aspects Of A Business Plan
- Executive summary. It is an overall outline of your business plan and should tell the reader what you want to achieve. It should be no more than half a page long, and businesslike. Key elements of an executive summary are:
– Business concept
– Financial features and requirements
– Current business position
– Major achievements.
- Company description. Contains information on the nature of your business, what sets it apart from others, and the markets that it will serve. Concentrate on your company’s structure, legal form, potential customers, product distribution, and how you plan to stand against competing companies.
- Market analysis and strategies. Research the target industry, market and competitors, and present the research results.
- Management and organization. Every business is organized and managed differently. Provide information about the organizational structure of your business, ownership details, profiles of the members of your management team, board of directors and their qualifications.
- Service and product line. It should include the product/service description, details about its life cycle, intellectual property (copyrights and patents), R&D (research and development) activities.
- Sales and marketing. There is no single way to approach a sales or marketing strategy. Each one of these strategies is unique to every company. However, there are certain steps that are in common for every business, and you can follow them in order to sustain customer loyalty and drive sales. Two main elements should be included in your overall sales strategy: a sales force strategy and your sales activities. An overall marketing strategy should be consisted of strategies regarding market penetration, growth, channels of distribution and communication.
- Funding requests. If you look for someone to fund your business, information about current funding requirement, future funding requirements over the next 5 years, and strategic financial situation plans should be provided.
- Financial projections. This section is critical for backing up your funding request.
- Laws and regulations. The business you intend to initiate should be consent with the laws and regulations in your country. Seek for expert’s business legal advice.
- Appendix. This section is optional. You can include leases, permits, and resumes in your appendix.
Writing a business plan takes time. Consult with your colleagues, partners and mentors. Ask them to read it and provide you with a feedback information, so you can cover all the holes and improve it.