Business plans are essential when you are looking for finance from investors or lenders, but they can also help you launch a better business. They clarify your ideas and highlight potential problems or weaknesses. They also give you an opportunity to get feedback as people will understand what you are planning and can give you an informed opinion.
To achieve all these objectives, your business plan should have the following eight elements.
- Executive Summary
This is a brief outline of the business proposal. It should summarize each of the sections below, highlighting the main parts. Try to keep it to 150 to 200 words – about half a page of text.
- Describe The Business
Now you are in the meaty part of the business plan, so the first stage is to describe your business idea. Talk about how you came to have the idea, and what your vision is. Describe your products or services, and outline your unique selling point and/or value proposition.
Explain who your customers are by describing the demographic. Define the size of the market to give an idea of the potential of your business. You should also include details of current trends in the market, and look at where experts predict those trends will go in the future.
- Analyse Competitors
Describe who your competitors are, and what they sell. Outline their market share as well as giving reasons why people buy choose to buy from them. Crucially, you have to differentiate your business from the competition. In particular, why will customers buy from you instead of from a competitor?
- Sales & Marketing
Next, describe your sales and marketing strategy. This should include:
- Your pricing policy
- Details of how the products will be sold
- A plan describing how you will acquire customers
- The numbers of sales staff you will need
- The marketing budget you will need
Outline how the business will be managed and run. This includes describing the skills and experience of the key people, as well as the role they will play in the new business.
Also describe other key points regarding the day-to-day operation of the business. This includes the location of premises and the staffing levels you require.
- The Opportunity
This is the part to think big – what is the best case scenario, and what do you plan to do if you meet or exceed the upper end of your sales forecast? This could be outlining an exit strategy or it could be describing the potential for growth and expansion.
- Financial Forecasts
Financial forecasting is essential in any business plan. The best advice is to be realistic. You should research as much as you can to try to get the numbers as accurate as possible. You should forecast sales, cash flow, and profit and loss. You should also outline the cost to buy or make your products, the profit margins you expect to make, the overheads you expect to incur, any capital expenditure that is required, and anything else that is significant financially.
With these eight elements in place you will have a business plan that will help you move to the next stage.
For more help and advice with your business please contact a member of the Gilroy Gannon team today.