Having a plan is just as crucial for your business as it for you as a person. Having a plan helps in staying organized and getting things done effectively. Having a business plan will guide you throughout your business decisions and help in achieving your goals effectively. So, having a business plan is a must!
Drafting a business plan sounds like a daunting task, but I have written this blog post for you to make the process of creating a business plan more manageable.
Six crucial components go into a kickass business plan, they are:
SWOT Analysis Chart
An executive summary is an outline of the entire business plan. it has to be clear and concise.
Things to be included in an executive summary:
- your business’s story
- the problem it solves
- the product/solution your business offers
- the mission statement
- short term and long term goals
This section of your business includes five areas. It includes,
- Business Ownership: What type of company are you? a private limited? Partnership? Sole proprietor?
- Address: Where is your business located?
- Company Mission Statement
- IP and Patent Details (for tech companies)
- Core Team: Who is the founder? Who is responsible for executing the business plan? Who are the team members, and what’s the expertise of the team?
Market analysis is the overall research of the market you want to work in. The size, scope, value, profits earned, etc., have to be researched before you step further into your business. The market analysis part of the business plan is broken into 4 parts. Research, Creating a marketing persona, Competitor analysis, Identify your key customer.
The research can be done in two ways.
- Primary research: Done by you. e.g., surveys, focus groups, interviews with potential customers, etc.
- Secondary research: done by others. Such as reports and statistics using government agencies etc.
Creating a marketing persona means identifying your ideal customer’s demographic – age, gender, likes, dislikes, etc.
Competitor analysis refers to researching your competitors in terms of how they’re selling and how you can carve your niche out in the market.
If you’re done with these steps, the 4th step will be easy to answer, i.e., Identifying your ideal customer.
The business institutions get this analysis done to know their Strength, Weakness, Opportunity, and Threats. You will need to list all these things to help you get to know your business and help you position your business better in the market.
A financial plan portrays a complete image of the business institution’s current economic condition, financial goals, and steps to achieve those goals.
Answering the below questions will help you in drafting a perfect financial plan for your business.
- Where do you see your business in the next five years in terms of,
- sales forecast
- cost of goods sold
- expected employee costs
- other expenses
- profit and loss account
- balance sheet
- cash flow statement
2. How you plan on using the investors’ funds if you’re planning to fund?
3. Are you planning on selling your company to another company or the public?
Now is the time to draft a plan to execute the business plan. You need to focus on 4 things here:
- Marketing Strategy: brand positioning, pricing model, promotions, etc.
- Operations: this explains how you’ll deliver your promised product or service. It includes sourcing, distribution, etc.
- Key Milestones: outline your significant goals and what changes you will make once you achieve them.
- Key Assumptions and Risks: list out the assumptions you made for your business and risks you think your business will be facing when drafting your business plan.
BONUS TIP: Write the executive summary after you finish all other areas of the business plan. This way, you will be able to draft your summary better.