Every business idea begins with the hope of being successful. There are many businesses that start but only a few sustain. The challenges are ever increasing in this global market. The opportunities are endless, but it is only viable for those who are smart enough to adapt, keep up with the changes and take risks. As a blueprint is essential before building a house, a business plan helps to bring focus on the business. It determines whether the business idea is worth the effort or not.
A great business plan can be made only when you know your business very well and get deep into all the details. The key components of a business plan are as follows:
- Executive summary: This describes the business idea and how you want to execute it. It defines the short term and long-term goals. It is the most crucial part of a business plan. It must discuss the company’s products or services, the competition, and the funds required to start and grow.
- Objectives and values: This should answer why you want to do this business, what it means to you and how it affects your value system. You can describe in detail how you want to conduct your business. This helps to streamline the whole purpose of the business.
- Products/Services: Here you should explain in detail the services or products you want to offer. Avoid using technical terms and use simple common words to describe what makes your product or service stand out from the rest, how unique it is and more importantly, how necessary it will be for the intended customers.
- Market analysis: Market research is essential for any business; it is a significant factor for its success. A good analysis will identify the target customer base, understand their buying behaviors, and help the business define products or services that have a competitive edge in the current market. The goal is to match your product or service with the purchasing ability of the consumer.
- Business structure and operations: This outlines the managing and operations teams and their hierarchy. If you already have some members on board you can list them here and also define their roles and goals. Most entrepreneurs are good at managing the operations, as they always think about “running” their business. Permits, licenses, patents, insurance, environmental regulations, trademarks, copyrights, staffing, policies, recruiting, training, pay structures, inventory, suppliers, daily operations, infrastructure and everything else must be included. This helps you determine what is essential for setting up your business.
- Sales and marketing: Once everything else is determined, the next job is to focus on selling the products/services. Market research determines where can you find the ideal consumers you are seeking and in what way can you capture their attention. A little research will help you decide which medium of marketing can earn you good sales.
- Financial analysis: A great business plan must include an income statement, a balance sheet, cash flow statement, operating budget, financial projections, etc. These financial estimates and projections help investors, lenders and entrepreneurs to evaluate the success or failure of a company.
- Appendices: This section is for supporting information about your business. You can include resumes of important members of the team, legal permits, agreements, additional information about products/services, copies of market and financial research analysis, photographs of products or potential facilities, etc.
Keep in mind that the audience for a business plan can be investors, future employees, lenders, and partners, and their interests varies. So, modify your plan to the intended audience when needed, noting that the core information about your company will stay the same regardless of your audience.
