One of the things every business owner needs to do when starting a company is to create a business plan.
A business plan, according to Shopify, “a business plan is a document that describes a new business, it’s products or services, how it will earn money, leadership and staffing, financing, operations model, and other details that are essential to both operation and success.”
Business plans are not limited to new businesses; you can also write a business plan if your company is already existing.
When raising funds for your business, most investors would love to see your business plan. If you don’t show up with one, then they would have the impression that you are not serious with your business.
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Remember, your business plan shouldn’t be rigid; it can be updated and reviewed from time to time.
A business plan gives you the opportunity to clearly state the details about your business, your business description, how you make money, and your business growth and goals.
Here are some of the essential components of a business plan:
Executive Summary: Your executive summary should tell us some of the critical details and outline of your business plan. Here is your chance to give your readers the opportunity to have an idea of what is included in your business plan. This would save them time and know the content of the document. Some people always advise writing this component last because it summaries the entire document. Also, this part of is often termed as the most important part of your business plan. This part of your business plan should be able to describe your business, the problem it solves, company information, your market, and finances. It should capture the main points of your business plan and don’t forget to include your mission and vision statements.
Business Description: This part of your business plan should give your readers a detailed description of your business. In addition, it should be able to cover the type of business you operate, your location, your business industry, your current status, goals for the company, and so on. Also, include your research and development activities, as well as plans for coming up with new products and services in the future.
Market analysis: Here is your chance to give your readers an appropriate assessment of your market. You should talk about your customers, your market share, their buying patterns and demand for your products, the size of the market, and the value you bring to the market. You should be able to demonstrate your profound knowledge about the market and clear image of your market as well as the strengths of your products and services.
Competition analysis: This section, you get to explain in detail who your competitors are and your competitive advantage over them. You analyse both your current competitors and potential competitors. Don’t forget to analyse their strengths and weaknesses as well as your own competitive strategy. This helps investors know that you are aware of your competitors and you have a unique advantage and plan over them.
Organization management: In this section, you have the opportunity to talk about your team members and what they bring to the table. In addition, you should talk about their skills, experiences, education, and expertise, as well as your organizational structure. You should also include details about your ownership structure, your board of directors, and management team.
Products and services: Here you explain in details the concept of your products or services as well as the process of production, packaging, and distribution. Clearly define your production and operations plan. In addition, you need to explain how your products will be priced and the value you are offering your market, as well as how you intend to cater for your target market, production workflow, quality control mechanisms, and so on. You should also tell us the benefits of your products and services and why customers would pick yours over your competitors’.
Marketing plan: How to do plan to market your products and services? Here, you should include how you plan to sell your products and services as well as the results you hope to achieve from these activities. Tell us how you intend to get your products and services advertised, promoted, and your budget. You should also include your pricing strategy in this plan and how you would convey your unique selling point, product features, and product benefits to your target audience. Don’t forget to be very specific.
Sales strategy: This section of your business plan should include your sales tactics, best practices, and your sales budget. Include your costs, provide information about your sales staff and their activities. Include how you would sell your products, whether directly or indirectly, through a distributor, etc.
Funding requirements: If you are submitting your business plan for funding, here is your chance to explain the amount of money you need, why you need, how you intend to use it, and the results you hope to achieve.
Financial projections: Most times it is often advised that you treat this section of your business with an accountant. This section should include your income statements, balance sheets, cash flow statements, budgets, and so on. This section should be developed after you have analysed your market and set clear objectives for your business. Don’t forget to include past and future financial data.
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