One of the biggest causes of failure for any venture is a lack of planning and preparation.
A good business plan can help to plan, manage and navigate a company by detailing a strategy to achieve the company’s goals.
A business plan is essential for any company; no matter what the size, industry or location. A business plan helps to identify where the company will be in the future and outlines the steps it will take to move itself forward.
A good business plan serves as a blueprint for the business; it needs to have a solid goal and a detailed strategy on how the company will go about achieving the defined goals.
A business plan is also a good indicator of the company’s potential for success.
It helps investors and partners understand the business strategy and decide whether it is a good company to invest in.
Writing a business plan is a crucial first step when starting a business. However it is just as important to keep the business plan up to date. The plan will need to be revised often and updated to be continually in line with the businesses views.
Writing a business plan is beneficial as it allows the company to:
- learn about the industry they are in, including their market and competitors
- identify challenges that the business may come across, and pre-plan strategies to overcome them
- understand the company’s finances, including managing cash-flow and determining the break-even point
The following are recommended components of the business plan; however, the structure can be varied depending on the individual business. It is the business’s choice on how to write and present these sections:
Executive summary
This is the abstract section of the business plan and summarises what the content of the whole plan will be. The executive summary can include a company background, marketing opportunity, mission statement, competitive advantage and a summary of financial projections.
It is a good idea to write the executive summary last despite it being the first section of the business plan.
Company overview
This is designed to provide more information about the company, including when and how it was formed, its business model and also its business strategy.
Business offering
The business offering outlines why the company is in business and also what the company sells, whether it is a product or service. The business offering should also provide information on manufactures, distributors and inventory. This section should also include any new product or by service lines that are expected to be entered into the company in the future.
Marketing plan and analysis
This section details the businesses marketing analysis, sales, customer service, advertising and public relations. Many companies use this section to outline why the company will be successful and will then back this statement up with market research.
Strategy and implementation
Strategy and implementation are particularly important to potential investors. It includes all the in-depth details involving dates and deadlines. This section can also include the company’s sales forecasts.
Financial projections
This section will include the projected profits for the business. This will comprise projected profit and loss statements, balance sheet and cash flow statements. Financial projections are about showing the quantities involved in the entire business plan.
