Your business plan is vital to establishing the structure of your business, your goals and objectives, strategies, products and personnel. It is used to plan and manage your business, apply for financing or show it to potential investors. It has ten main parts and these are:
1. Cover and index
It sounds a bit silly, but a great cover for your business plan will show the professionalism and care that has gone into its production. It’s also the ideal place to include your company logo and contact details. If applicable, include photos of your products.
It is vital that you also include your company name and number, as well as your contact details such as address, website, social media accounts, and the email and phone number of your relevant manager. You will be surprised how many people forget about this feature.
To help potential investors navigate, the table of contents should include all points in the business plan with the corresponding page number. Make it as complete as possible so that the reader has a clear idea of what the document contains.
However, producing the table of contents also gives you, the writer, a great planning tool to make sure you include all the points and information you need to include.
2. Executive summary with the needs and objectives of your business
In the first part of the document you must make a descriptive summary of the idea that includes the following points:
• The opportunity in the market
• The product or service and its advantages
• The management team
• Financial summary of financing needs and expected profitability
By writing the executive summary first, you put all the information in your head. You can always return to it at the end of your main body wiring.
Remember, you must capture the attention of investors in approximately two pages where you will summarize the most important points of the text. You should also keep several things in mind:
• It is vital that you define the need or problem that your business intends to solve.
• It is necessary to define the fundamental objectives of the company.
• You must inform the investor in which stage your company is currently. Whether you’re in pre-production, starting to expand, or in profit, for example.
3. Plan your business
Here is the point where you take out your scratch paper.
• You should describe your company’s mission – that’s what you hope to achieve. Next, you need a list of actions your business needs to get to this point.
• Next, you need to determine how you will solve the business problems you have identified.
• Now describe what your product or service is, what customers will get with their purchase, and what its weaknesses or drawbacks are.
• Find out what price point your potential customers will be comfortable with.
• Lastly, you need to figure out how you can find these customers.
All of this can often be defined by using a business model canvas and this is the subject of another one of my articles. You can buy consultancy to produce this model.
In general, there are already companies that are working for the same goals. Identify them and ask yourself: How am I going to differentiate myself from my competitors?
4. Explain the structure of your business
Making a business plan involves examining the strengths and weaknesses of your competition, once identified you can justify why your business is unique. You need to stand out from the crowd to increase the investment opportunity. That is, check the following information:
• Describe what you will sell to whom and at what price.
• Present your brand concepts: will you be a luxury company, for example, or will you sell it as a cheap company?
• Describe how you will comply with a request; In other words, the entire process, from the purchase of the products to the actual delivery to your customer and the offer of after-sales service.
• Clarify how you will cover the main areas of production, sales, marketing, finance and administration.
• Include management accounts, sales, stock control and quality control.
• Define how you will sell your products and analyze, if necessary, the location of the company and the advantages and disadvantages of this situation.
Be sure to answer the following investor questions: What are your competitor’s products and how do they create them?
5. List the characteristics of the market in which you will develop your business
You will need to analyze the market conditions: how big is it, how fast is it growing, and what is your profit potential. Explain how you are going to research your audience and with what tools.
Know the target of the market in which the business will be developed and direct the marketing strategies towards that target. If you don’t have a marketing strategy that works, you will waste time, effort, and money.
Answer the following question: Where are you going to find your customers?
6. Forex promotion strategies
This is where your business marketing plan should be included. It is perhaps one of the most relevant steps when making a business plan. Marketing and promotional strategies could determine the success or failure of your company. Try to answer several questions:
• How are you going to position your product or service? This is where you want the 4 P’s of marketing: price, product, promotion, and place.
• Compare features such as price, quality and customer service with your competitors.
• How will you sell to your customers? Telephone, website, face-to-face, agents?
• How will you identify potential customers?
• How will you promote your business? Advertising, PR, email marketing, content strategy, social media, etc?
• What benefit will each part of your business achieve?
• Why would someone abandon their current competitors to buy from your business?
• How are you going to attract them to your company and your products?
• What is a fair estimate of the number of clients you will achieve each year for the first three years?
• What will be your estimate of the cost of reaching each new customer?
• What is the estimated cost of retaining each customer?
7. Define your source of income
This is where you put all the information about what your business will sell and where the revenue stream will come from.
• The products and services you will provide.
• Any advertising fees, commissions, membership fees, etc. you will receive.
The analysis must include: price structure, costs, margins and expenses.
Include details of your anticipated cash flow for the first three years. Cash flow is an important consideration. In web-based businesses it is known as the rate of consumption.
8. Your team
This is where you get lyrical about the strength of your directors and main staff. Include your experience in similar posts and what they can do for your startup. Include basic resumes for each of them and establish their responsibilities. If you have a particularly well-known supporter, mentor, or director, this is where you mention them.
9. Your finances
When you get to this point in making your business plan, you should start translating everything you’ve said into numbers. That is, analyze the financial forecasts of your business. Also include your financial strategy – how you will manage your cash flow, vital for any new business. If you don’t have a plan, the business could suddenly go under or fail. If, on the other hand, you receive unexpected success, your goals may suddenly change and you will need a new business plan. Therefore, you need to assess the risks to your business, identify areas where something could go wrong, and explain what you would do in that case. You must include any other investments you have or will receive. Details of your stock allocations, particularly large percentages, should be included.
9. What are you going to do with the investment?
Very important, include what you are seeking financing for and how and when you intend to spend the investment. It is vital that the potential investor sees that the company will be greatly improved by the investment.
Indicate how soon and how often the potential investor will see a return on their investment. Also include the shares offered, as well as your possible stake in the company after you have invested.
It is vital that they are offered an exit strategy so that they can have a good return on their investment and then move on to the next new company.
It is very possible that after making the business plan you will need to give additional information to complement it. For example:
• Market research data you have used.
• Summaries of the team that will form your company. This is very important if you are looking for high levels of financing.
• Technical specifications of the product or service (may include photographs).
• The names of some potential clients.
Creating a business plan implies writing many pages with attractive, dynamic and precise texts that capture the attention of very demanding people. It should catch the attention of investors, who despite having read hundreds of them should find something unique in your business plan.