Tuesday, 18 March 2014 00:00

How to write a great business plan

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Often entrepreneurs don’t get round to writing their business plan until the last minute or when they are trying to secure startup funding. But the fact is that your business plan is even more than a document just for the bank manager to look at, or for potential investors to read, it’s your invaluable roadmap to launch and run your business and formalise goals and strategies to grow it.


To get your business plan down on paper you are going to be conducting research and think through many factors to ensure has a chance of success. Some of the things that are going to be included will be detail’s of your marketing strategy, and layout of your sales and operational forecasts, having the right plan will not only help you identify any weaknesses opportunities and threats but allow you to make informed decisions about you business venture before you have fully committed yourself financially and legally.


With the right plan in place you will be able to show your potential investors how they are going to make money. Most investors will intend to sell their shares for a good return, this is the Exit strategy. The most common route for a successful company is either through publicly listing your company, called going public or initial public offering (IPO) or through a merger or acquisition (M&A) by another company.


If you’re creating a business plan involving a loan, then lenders will want something configured slightly different. They will be looking for detailing collateral or assets to back or pledge against the loan Collateral includes funds to support loan payments, interest expenses, and debt repayments. Banks are not allowed to make speculative loans, therefore you will have to include information in the plan that will give your banker security.

Furthermore, your business plan can also be useful if you plan to do business overseas. If your business or service coverage is international, then your business plan will provide a standard means to evaluate your service or products in an international marketplace.


7 point business plan to success


01 Executive summary


Your executive summary should be 1–2 pages long, and provide an overview of your business concept, key objectives of your business and your plan, ownership structure, management team, your product or service offering, target market(s), competitive advantages, marketing strategy, and a summary of your financial projections. Your executive summary should be written last, after you've written the rest of the plan; each paragraph should be a summary of the more detailed, related section of the plan.



02 Business Overview


In your overview, include details regarding your business’s history, vision and/or mission, objectives, and your ownership structure. Key things to cover here are why and when it was formed, its mission, business model, strategy, and any existing strategic relationships. You can also cover administrative issues, such as intellectual property you may own, costs associated with your location, the legal structure of your company, management, personnel, and how you address accounting, legal, insurance, and security matters.



03 Products and Services


Also referred to as Business Offering, Expand upon your products and services, including features and benefits, competitive advantages, and, if marketing a product, how and where your products will be produced.



04 Industry overview


The industry overview is your opportunity to demonstrate the viability of your business by discussing the size and growth of your industry, the key markets within your industry, how your customers will buy your products or services, and which markets you’ll be targeting.



05 Marketing Strategy


Here you describe your target market segments, your competition, how you'll differentiate your products or services, and your products’ or services’ unique selling proposition (USP).
• Discuss product or service pricing and promotion, including how your promotional programs will appeal to each of your target market segments.
• Provide a plan of traditional and guerrilla marketing tactics, such as tradeshows, press-magnet events, social media marketing (e.g. Facebook, Twitter, etc.), networking, and print, media, or online advertising. Include the cost associated with each tactic.
• Describe how your products or services will be sold (e.g. storefront, online, wholesalers), and your target markets’ buying cycle.



06 Operations Plan


Provide a profile of your management team, your human resources plan, your business location(s) and facilities, your production plan (if selling a product), and an overview of day-to-day operations.



07 Financial Plan


Some believe this is the most important part of a plan – so much so, it’s worth dedicating up to 80% of your time to writing this section. You'll need to show three years’ worth of projected financial statements, including income statements, pro-forma balance sheets, and monthly cash flow and annual cash flow statements. Summarize each statement into a few easy-to-understand sentences and put these in a cover page for the statements. Be sure to document all of the assumptions you used in forecasting your revenues and expenses.


 

Free resoures to help you get started

Business Plan Template
Word templates and office documents to help you get started, including Business Plan, Sales Reports, Invoices, Ledger, Cashflow Forecaste, Problem Analysis, Expense Report, Shareholder Equity, and many more.

Sample Business Plans
Hundreds of FREE business plan templates and samples in various catagories of business.

Read 496 times Last modified on Tuesday, 18 March 2014 18:58
Kerry Slater

Kerry is a Senoir writer at fundedflow