by Spectrum Business
A business plan is essential if you want to secure finance from a bank, financial institution or loan provider. Even if you don’t intend to apply for financial backing, a business plan gives you a blueprint for starting, maintaining and growing your small business. Most small business plans cover a period of two to five years, although some larger businesses may create a plan to cover 10 to 20 years. Whether you are writing a small business plan to secure funding or just for your own use, there are several essential sections you need to include in your plan.
The executive summary should provide a brief overview outlining your whole business plan. It should include one or two sentences to sum up each section of your plan, along with a synopsis of your business proposal. Avoid using jargon or complicated concepts in the executive summary, as it should provide a layman’s view of your business proposal. You can include more technical information in the rest of your business plan. The executive summary should be presented at the very beginning of your business plan.
The business description should include a short digest of the industry in which your business will work. Describe the current and future opportunities offered and demonstrate your knowledge of the industry. Next, you need to describe your small business and how it will work. Outline your business idea, including your vision for the future, and provide any relevant background information. It is important to demonstrate your knowledge and understanding of the business you intend to run, including any pitfalls and challenges you may face. In addition, you should highlight your unique selling point or explain why customers will choose you over competitors.
Once you have explained your business idea, you need to provide detailed information about the products or services you intend to offer. If you are offering services to the public, include proof of any qualifications or training you have taken to learn your trade. If qualifications and training are not needed, find another way to demonstrate your ability to provide the service. If you are selling products to the public, provide detailed information about the products, including how and where you intend to source your items. Provide company and pricing information for any suppliers and service providers you intend to use.
You will need to provide detailed information about the management structure and operations of your business. Provide background information, qualifications and relevant experience for all management team members, as well as a definition of their role within the business. If you need to employ workers or services from outside the business, outline what you will need and when. You will also need to provide detailed information about any equipment, facilities or premises you need, along with the estimated cost.
Define your intended customer base, providing as much information as possible, such as their age, marital status, job, hobbies and financial status. Explain why customers will buy your products and highlight ways that you will reach new customers. If you have evidence of any customer research you have conducted, include it in your business plan.
In addition to including the results of any market research, you need to present a realistic marketing plan for your business. Include any costs you may incur, as well as any services you may need to use (e.g. advertising agency services). You will also need to outline your sales plan, including information about how your sales will be conducted (e.g. through your website, over the telephone or in your shop). Explain how you intend to secure repeat sales and foster a good word-of-mouth reputation.
As part of your market research, you should have researched your competitors thoroughly, gathering as much information as possible about their company, products, services, prices and customer satisfaction. Present your findings in your small business plan, along with an explanation of how you intend to compete with businesses like your own.
You will need to provide detailed forecasts for your sales, cash flow and profit and loss projections, particularly if you want to secure funding from a bank or investor. If you have already invested your own money in the business, provide details and show how you have spent the money. You should also show how you intend to spend any money invested in your business.
When writing your business plan, it is important to be clear and concise in your writing. Aim to use as few words as possible, as many business plans are far too long to hold the attention of investors. Include all evidence to support your plan, financial forecasts and market research. Above all, it is important to be realistic and conservative in your projections, as investors may be deterred by overly optimistic business plans.
