Starting a Business: How To Make A Good Business Plan
Starting a business can be exciting, but running a successful business may not be easy. Many businesses fail in their early stages as a result of factors like poor planning. Before you start a business, you must have a business plan since it plays a crucial role in your operations. Read on to learn everything you need to know about creating a good business plan.
Refine Your Business Idea
Before establishing your business, you should already have an idea about what you want to do. Refine your idea to ensure that it suits your business goal. Your idea can shape your business plan which is known as a comprehensive roadmap for establishing a small business. It outlines your mission, vision, or objectives and the strategies you will consider to achieve them.
Write an Executive Summary
The first page of your business plan is the executive summary, and it includes a mission statement, a broad summary of your financial goals, and a brief description of your services or products. This should be the last page to write although it comes first in your business plan. Your executive summary should be short and to the point.
The next stage in your plan is your company description. The section should contain information like your company’s registered name, location, structure, or names of key people in your business. UK-based business consultants at www.uniwide.co.uk explain that every business must be registered to operate legally. You can enlist the services of professionals to help you choose an appropriate structure for your business.
There are different types of business structures you can consider such as sole proprietorship, Limited Liability Company (LLC), partnership, or corporation. These details including percentage ownership should be in your business plan. You also need to include the nature of your business and the history of the company.
This section outlines your objective statement which spells what you want to accomplish in the short-term and long-term. This part of your business plan will help you secure outside investment or a business if you need money to finance the growth of your business. When you have long-term goals, you can convince the lenders that you have done enough research and that your business idea is viable. If you want to launch another product, you can explain how the loan will help increase sales.
Describe Your Services and Products
Describe the services or products you plan to offer and explain how they will function. You also need to include the pricing model for your offerings and the target customers you intend to serve. Your business plan must also mention the supply chain, sales strategy, and distribution methods you plan to use. In this section, you should mention patents or trademarks associated with your brand.
Do Your Research
When you intend to start a business, you must do some research to know the competition that already exists in the market. Your business plan should outline a structure and other aspects like the branding that set your business apart from other competitors. Potential lenders or investors are primarily interested in knowing your long-term goals and how you intend to achieve them. Therefore, it is vital to conduct primary and secondary research first to gain insight into the needs of the customers.
In your market analysis section, you need to explain your competitors and discuss how you will offer better services or products. State what you think your competitors are doing well and what you think you will do better. Provide details if you are serving an underserved market.
Explain Your Sales and Marketing Plan
You can outline how you plan to attract customers to buy your products or services. The success of your business mainly depends on the quality of customers you have. Therefore, you must explain how you plan to develop customer loyalty programs to retain your customers.
Perform Financial Analysis
If you are a startup, you may not have enough information to perform a financial analysis. Instead, you can provide financial projections and this part is critical to your business, especially if you plan to seek funding. It outlines how your company will generate sufficient revenue to repay your loan.
In your financial analysis, provide your expected monthly or quarterly sales, expenses as well as profit estimates for about three years. If you obtain a new loan, provide future projections of your financials. However, remember to set realistic goals and your plan must be flexible to accommodate necessary changes.
Add an Appendix
An appendix is the last part of your business plan and it contains additional information related to your business. Some of the details you can include in this section include licenses, employee resumes, equipment leases, patents, permits, bank statements, and credit history.
Tips for Writing a Successful Business Plan
When you write your business plan, you must avoid over-optimism since this can impact your chances of getting a loan. The lenders will go through every detail you provide in your plan, so make sure the information is realistic. Make sure you proofread your business plan to avoid turning off prospective investors. Simple mistakes may be costly since the readers of your document will never take you seriously.
It is a good idea to enlist the services of a professional business plan writer, editor, or proofreader. You can use free resources available online to write your business. Be sure to conduct thorough research to come up with a meaningful plan that can convince investors about the viability of your business idea.
Starting a business can be an exciting experience since it gives you financial freedom in the long term if you successfully run it. However, most startups fail within the first five years of operation as a result of poor planning. If you want to succeed in your venture, you must have a proper business plan. There are different steps you should take to create a business plan. These tips can go a long way in helping you establish a viable business.