June 29 2024 Avilla Area Chamber Team
A business plan is one resource that you can use to help your business succeed. Essentially, a business plan is an outline of the path your business intends to take to make money and grow revenue, typically for a period of 1 to 5 years.
You might be asking yourself, “Why should I create a business plan?” Here are several reasons why it is very beneficial for your business and how it may prove to be crucial to your success and prosperity.
A business plan helps you to clearly define your business goals and the steps needed to achieve them. It helps to guide you to make informed decisions about your business’s future and helps you to stay focused on your mission and objectives.
A business plan is going to be valuable for you because investors and financial institutions will want to see a well-thought-out, concise and strategic business plan before they will provide you funding, because they want to be sure their money is going to support a sound investment and risk loss.
Having a business plan also can help you plan for growth, efficiency in your operations, to work strategically, to research and analyze your industry and customer base, to identify challenges in your industry and company.
In the following information, we’ll walk you through what to include in your plan, which is essentially, a document that explains your business’s operations and its financial status.
Firstly, create a clear snapshot of your business plan by writing an Executive Summary. This summary should include your business’s name and it location.
Next, briefly, yet concisely, describe what your business offers, such as your services or products.
Give your Mission Statement, which is a summary of your business’s values and goals.
Next, write out your Vision, which expresses what you want to achieve, and then add your objectives, or in other words, your long-term and short-term goals.
The next portion of your business plan is your Company Description, which contains the following information:
Firstly, add your company’s description, which includes detailed information about your business’s structure, which refers to your status as a corporation, an LLC, a partnership, etc.
You also want to include your Business Model, which illustrates how your business will make money.
Next, list your Business History, if it applies, by giving a brief description of how it began, when, where, and its offerings.
Describe what problem your business does or wants to solve. This is called Market Needs.
Along these same lines, explain briefly your Unique Selling Proposition, which describes what makes your business stand out from its competition.
The next portion of a business plan is Market Analysis, which lays out information regarding your business’s target market, your competition, and your industry.
Describe the Industry Overview for your field by mapping out current growth, trends, and opportunities.
Define your Target Market, which is your customer base, by describing their needs and their behaviors.
Estimate the Market Size of your target market.
Describe your Competitive Analysis by identifying your main competitors and their weaknesses and strengths and map out how you will or currently compete.
The next portion of your business plan is called Organization and Management, which outlines your business’s structure and your managing team.
Create an Organization Chart of your business’s structure, listing your key membership team, their titles, qualifications, and responsibilities.
Also list your business’s Legal Structure entity type, for example, is your company set up as an LLC, corporation, etc.?
The next portion of your business plan is called Products or Services. This section describes in detail, your products or services
List a description of your products and services’ benefits, features, and their value to your customers.
Describe the Life Cycle of your products and services, including development stages, production, and distribution.
Next, explain any Intellectual Property, such as any patents, trademarks, or copyrights that you have acquired and then, describe any ongoing or planned research and development activities.
The next portion of your business plan is Marketing and Sales Strategy, which overall, explains how you plan to attract and retain customers:
Give your Marketing Strategy, describing the avenues, such as social media, print publications, etc., that you currently or will use to reach your target market.
Then give your Sales Strategy, by explaining your sales process, sales team structure, and sales goals.
Next, explain your Pricing Strategy by specifying how you will or how you currently, price your products or services.
The next topic is Promotion, which covers your advertising, promotions, and public relations strategies.
The next portion of your business plan is called Funding Request, which is going to provide details about your funding requirements, if you are seeking financial assistance.
Firstly, give the amount needed by clearly stating the amount of funding you need and then list the use of funds. This should be a precise breakdown of how the funds will be used, perhaps for operating expenses or equipment.
Future Funding, covers any additional funding needs you foresee.
Document your Financial Plans by sharing your strategy for paying back or offering returns on investments made.
The next portion of your business plan is called Financial Projections, which provides financial projections to demonstrate the viability of your business:
Give your Sales Forecast next, which is a picture of your business’s projected sales for the next 3-5 years.
The next topic to include is Income Statement, which details expected revenues and expected expenses.
Next is Cash flow Statement, which describes your business cash incoming and outgoing monies.
The next category is Balance Sheet, which covers your business assets, liabilities, and its equity.
Next is Break-even Analysis, which is the point at which your business will cover all of its expenses and begins making a profit.
The final section of your business plan is the Appendix, which includes any additional information that supports your business plan, such as the following documentation.
Resumes of your imperative management team members, any required permits and licenses for operating your business, any legal agreements or contracts, any of the detailed market studies or surveys that you have acquired. and product photos or prototypes
Some key factors to remember when writing your business plan is to be realistic when presenting your forecasts, use the most up-to-date and accurate data that you can, stay focused by writing with clarity and precision, staying away from abbreviations, overly terminology, and slang.
Also, when possible, use images, graphs and charts to illustrate your points.
Finally, once your business plan has been created, ask a mentor, your investors, or someone who is an accountant, or financial professional, a loan officer, or in the legal profession.
Using the sections and information given here, you should be able to create a comprehensive business plan that is specifically tailored to your company that will serve the roadmap for growth.
If you would like to an example of a business plan, SBA has free sample business plans available for download and review.