A business plan is a legal description of business goals, reasons they are achievable, and tactics for reaching them. It may also contain background knowledge about the organization or team striving to reach those goals.Business plans may spot variations in understanding and branding by the customer, client, taxpayer, or greater community. When the existing business is to assume a major change or when planning a new adventure, a 3 to 5 year business plan is required, since investors will look for their investment recovery in that time frame. Business plans are decision-making tools.
Some of the questions to ask yourself when writing your business plan:
- How will I generate a profit?
- How will I run the business if sales are low or if profits are down?
- Who is my competition, and how will you coexist?
- Who is my target market?
What should be included in a Business Plan?
1. The Business Description
The Business Description is a sketch of the central points in your business plan and is often considered the most significant section. The description should
- Combine the central points from each of the other segments to define the basics of your business
- Be enough entertaining to stimulate the reader to proceed reading the rest of your business plan
2. Identifying your Business Opportunity
You will explain what your business is about, its products and/or services, and your strategies for the business. This section usually includes:
- Who you are
- What you do
- What you have to contribute
- The market you require to target
3. Marketing and Sales Strategy of a Business Plan
A powerful business plan will include a segment that explains specific activities that you will use to develop and sell your commodities or services. A strong sales and marketing section describes that you have a clear idea of how you will get your product or service into the market and can answer the following questions for the reader:
- Who are your customers?
- How are you going to reach your customers?
- Who is your competition?
- How are you going to price your product or service?
4. Your Team
Investors need to understand that you and your team have the required balance of skills, motivation and skill to succeed. This section represents the people serving in your business and how you plan to manage your activities.
- A brief organizational design or chart of the business
- The wanted abilities of each position
- Biographies of the directors (including yourself)
The operations section of your business plan will sketch your daily operational specifications, facility conditions, management information systems and information technology conditions, and any developments you may have shaped.
- Daily operations
- Facility requirements
- Management information systems
- Information technology (IT) requirements
6. Financial Forecasts of a Business Plan
Your financial forecasts should include:
- How much capital do you need?
- What security can you offer to lenders?
- How do you plan to repay your debts?
- What are your sources of revenue and income?
- Forecasts should cover a range of scenarios.
- Review risks and develop contingency plans to offset the risks.
- Review industry benchmarks/averages for your type of business.