Governments across the world are increasing small businesses loans, commercial and retail space is cheaper than it has ever been, and customers are beginning to spend again.
There has never been a better time to launch a company. If you are looking to start your own business then you will need a polished business plan ready to go, long before you launch.
Why Write a Business Plan?
A business plan is a necessity for any modern business. Whether you are going to be applying for a loan, seeking investors, or even if you are self-funding. Putting together your business plan will help you to get a complete picture of what your business will look like, what it needs to run, and any complications you could face during launch.
If you are serious about attracting investors or getting a business loan, then you need a plan. Whoever said you don’t need a formal business plan to start or expand your business was certainly not addressing those who need funds from creditors and investors. That is why i wrote this guide for three set of individuals:
* Entrepreneurs who are just starting out in business and want to write their own business plan
* Established business owners who want to expand their businesses and need a business plan
* Those seeking funds (grants, loans or equity) to finance their business project. You don’t just write a business plan anyhow, there are laid down steps to follow so that your business plan will have a professional look and flow. This article will teach how to structure your business plan.
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Table of Content
1. Cover Letter
2. Title Page
3. Executive Summary
4. Your Company’s Profile
5. Products and Services
6. Your Industry Analysis
7. Marketing Plan
8. Operational Plan
9. Management Plan
10. Business Growth Strategy
11. Financial Plan
12. Projections
Income statement
13. Business Exit Strategy
14. Present your Business Plan with PowerPoint
1. COVER LETTER
The cover letter serves the same purpose as it does when you submit one along with a resume as a job candidate; it introduces your business plan to the reader. Because your goal is to market your idea to prospective investors, creditors, partners, employees, and other stakeholders, all the parts of your plan must appeal to the reader. Here are the elements that you need to include in the cover letter:
* Address of recipient
* Date
* Your address
* Salutation (you must include a specific name as in, “Dear Mr Bamidele.”)
* Body (state clearly that you are submitting a business plan for your business, which you can describe in one sentence; state clearly that you are seeking financial support for your business idea. Tell the reader what to expect in the following pages, and express your eagerness to hear back from them. Don’t forget to add your contact details)
* Appreciation
* Signature
2. TITLE PAGE
Remember, you will never get a second chance to make a first impression. So, you certainly don’t want to overdo this aspect. Since nobody will blame you for simplicity, stick with that option; which means you should avoid bright or contrasting colors and unnecessary fancy borders. The following are what to include on your title page:
* Your business logo (*if you have one*)
* The name of your business
* Founder’s name
* The words “Business Plan”
* Date
3. EXECUTIVE SUMMARY
Your executive summary should be the opening page of your business plan. It is essential and shouldn’t be missed – any serious investor won’t read a business plan without an executive summary. You should see an executive summary as the elevator pitch for your business plan. You need to grab the attention of your investors, summarize your business, and show that your plan is viable.
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You will want to sell your investors on your story and show that your business has the voice, the products, and the audience to back it up. You will want to use short sentences throughout your executive summary, and use bullet points where possible. You will have a lot of information to cover and you don’t want to lose your investors’ attention.
Each section in your executive summary will act as a sample for the later chapters of your business report. You will want to capture all the important information without getting too bogged down in the details. Most investors don’t read the rest of the business plan if they aren’t grabbed by the executive summary.
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COMPONENTS OF A BUSINESS PLAN EXECUTIVE SUMMARY
* Business concept (what you do or what you intend to do)
* Business goals and vision (what you want to achieve)
* Product/service description and differentiation (what you offer and what makes it different)
* Target market (who you want to sell to)
* Marketing plan (how you plan to reach your customers)
* Current financial state (what you currently make in revenue—for existing business looking at expansion, or how much you already have on ground—for startups)
* Projected financial state (what you foresee making in revenue)
* The request (how much funds you are asking for)
* The team (who runs your business)
A DESCRIPTION OF PRODUCTS/SERVICES
You will want to begin by talking about what your business does. You may want to use the P.A.S introduction system – you present the problem, aggravate it, and then provide the solution to it. The solution being your product or service.
SUMMARY OF YOUR OBJECTIVES
Use bullet points for this section. Summarize your business’ main objectives. You can talk about the number of potential sales you are aiming for, market positioning, and your other intentions. Most importantly, make sure the rest of your plan shows that you can achieve these goals with ease.
STRONG UNDERSTANDING OF YOUR MARKET
This section should act as a taster menu for your market research and marketing plan. You need to show that you understand the market you want to move into, as well as past and current trends. Briefly cover your advertising and social media plans. You may also want to give an idea of how you want your brand to look online. As well as, detailing some buzzwords you want to associate with your business.
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POTENTIAL FOR GROWTH/ FUNDING OVERVIEW
In this section, you should lay out the amount of funding you are looking for (if you need funding), how you plan to spend it, and what kind of profits you are looking to make. You should look at including 1 year, 3 year, 5 year, and 10 year profit predictions. You should also keep these figures realistic and make sure that they are backed up throughout the rest of the document.
YOUR COMPETITIVE ADVANTAGE
In this section, you should explain how you are able to offer something your competitors can’t and how you are planning to eat into their market share.
COMPANY DESCRIPTION
You will want to use this section to introduce your company to the people reading your business plan. By the time they finish reading this section they should understand your company’s mission statement, its structure, what it plans to do, and how it plans to do it. This section will be more detailed than your executive summary, and it will cover all the essential information about the day-to-day running of your company.
DETAILS ABOUT YOUR COMPANY E.G. LOCATION
Start this section by talking about where the company is going to be based. This will be very important for investors (and you), as it will affect what kind of tax will be paid on profits. Then you should talk about whether your business will have a physical location, or whether it will function in another way.
Talk about the different types of locations your business will need to function – i.e. a physical store, a warehouse, a server farm, etc.
HOW LARGE THE COMPANY IS?
In this section, you will want to talk about two things- what your company is worth and how many people you will need to employ (or already employ) to keep it running. These two topics go hand in hand, as you will have to prove that your business will be able to make enough money to support its payroll. You do not need to cover the management structure of your business here.
WHAT YOUR BUSINESS ACTUALLY DOES
In this section, you will want to present your mission statement for your company. This should include why your company exists, what its role is (are you a B2B or a B2C business), and what its overall goal is. You should share your process in detail here. For example, if you are planning to sell hats, you should briefly talk about the process of getting the materials, making the hats, and how you plan to sell them at a profit.
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WHAT YOU HOPE TO ACCOMPLISH
Here you should expand on your company’s overall goal. Include any smaller goals, you have as a company – for example if you plan to have stores in multiple cities within 3 years.
In this section, you don’t have to show how you plan to make your dreams possible. But you should make sure that you do cover that in the rest of your business plan – investors will look for these answers and won’t be happy if they’re not there.
To be CONTINUE….….
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