“A goal without a plan is just a wish”. It’s believed that French author Antoine de Saint-Exupery first coined the phrase, but it could just as easily have been said by any successful entrepreneur. The US Small Business Administration describes a business plan as an “essential roadmap for business success.” It is a living document, one that usually projects three to five years ahead, and it outlines the ways in which your company intends to grow, or what concept your business will realize. It’s the document that potential investors will look at to get a feel for your business and whether they want to back your idea.
There is no ‘one’ way in which to put together your business plan. But here are some pointers which, if included, can help to ensure a sound and effective business plan structure.
1. Describe the opportunity: Your business idea came in response to an identified opportunity. Describing this – the “big idea” so to speak, should act as the founding concept of your business plan structure.
2. Place your business in context: Provide an analysis of the industry in which your business exists. Instead of giving a broad, sweeping description of the environment, break the industry down into sub-categories and describe in which segment your company plans to operate, and why.
Then, describe your competitors. Identify the major players in the space, and detail how their offerings differ to yours.
Lastly, add a detailed overview of your target customer to your business plan structure. This should include a description of their demographics as well as their values, preferences and attitudes.
3. Describe the company: Include a short description of the company in your business plan structure. This should build on point one – the company’s history, its objectives, its ownership, and what it has achieved to date.
4. The product or service plan: What will your company offer, and why will it do this better than anyone else?
5. The marketing plan: This is where you add your marketing strategy to the business plan structure. Include here methods of attracting customers, distribution channels, ideas for product promotion and advertising, and your intended pricing policies.
6. The operations plan: How will you roll out your big idea? This section of your business plan structure should include an outline of your methods, your facilities (including office space or manufacturing space and equipment), quality control procedures, and sources of supply.
7. Management team: Introduce the group of people who will successfully see that your plan is brought to fruition. Also include here an overview of investors and directors. For human resource-reliant companies, you could also include a description of how you plan to attract and train employees.
8. Critical risks: Crucial to any thoughtful business plan structure is an acknowledgment that you are alive to the risks involved in your venture. Would-be investors will be looking for these, so it’s important that you pre-empt their questions by showing that you realize what the possible pitfalls are and have considered possible solutions.
9. Offering: This is the section specially tailored for investors. How much capital do you need in order to make your idea come off the ground? How much money will you use and when do you expect to see returns?
Some business owners also include an exit strategy at this point. How could you as the entrepreneur ‘harvest’ your investment – and how could an investor make the most of theirs should they wish to walk away?
10. Financial plan: Every potential investor will show key interest in this part of your plan. Where do you expect to receive financing for your business activities? How much do you contemplate receiving and over what period of time? For this part of the business plan structure, detail is paramount.
Include any historical financial statements, as well as pro forma information for the next three to five years. These should include balance sheets, cash flow statements and cash budgets. Expect this part of your business plan to be scrutinized by financiers, so make sure that it will hold up to critical questions. If you don’t feel up to the task, consider hiring a financial expert to help you with this part of your business plan. The Finance Team can help you to draw from their group of qualified accounting professionals to provide you with these services as you need them.
11. Supporting documents: Every claim being made throughout your business plan should ideally have a supporting document to back it up. While you don’t want to inundate a reader with paperwork, having these ready in an appendix format will help boost your company’s credibility and the strength of your claims.
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