Developing a business plan can make your business dream a reality. These plans document your company’s future objectives and strategies for achieving them. Business plans are a type of “roadmap” for a company’s operations, financing, and marketing.
No two companies are exactly alike. Therefore, no two business plans should be identical, either. With that in mind, avoid generic business plan templates and customize your plan to fit your offering and your company’s unique identity more closely. Doing so can help entice readers – including potential investors – with a plan demonstrating its singularity and potential for success.
A business plan can have several objectives, but the key focus is to establish your plans for the future, such as goals or milestones and detailed steps for how the company will reach each of these.
The plan’s focus should also include attracting investors and securing lending from banks, lenders, or other financial institutions. In addition, a well-developed business plan can keep a new company’s management or leadership team on the same page regarding key action items and goals.
Writing a business plan without basing your cost forecasts on reality can often lead to an unfortunate – and unnecessary – business failure. Yet, without some guidance on establishing your projected costs, it can be easy to underestimate a new business’s costs or overestimate its revenue.
Certainly, one of a new business owner’s key projections is that of incoming cash flow. Starting your business from scratch, you will likely have to estimate the amount of money you’ll bring in – at least initially. You can adjust this as time goes on.
It is important to note that while new companies often use business plans, they should also be regularly reviewed and updated as time goes on. That way, you will be able to reflect on any goals that were (or were not) achieved. You can also make necessary revisions to the plan if the company’s direction or the economy (and, in turn, your customers’ needs) have shifted.
Other benefits of having a business plan include thinking through ideas before investing too much money in them and working through potential obstacles to the company’s success.
You should have several key items in a business plan. These should, at a minimum, include a(n):
- Executive Summary
- Company Description
- Market/Industry Analysis
- Products or Services Offered Section
- Management Team
- Marketing Strategy and Analysis Section
- Financials Section (i.e., how you will fund the business initially and over time)
The executive summary outlines your company. It typically includes your company’s mission statement and information regarding the business’s leadership, operation, location(s), and employees.
Your company’s description should be an overview of your entire business. In this area, make sure you include basic information, such as:
- When the company was founded
- The type of business entity/structure
- The state where your business is registered (if applicable)
- Summary of the company’s history
In determining your company’s description, you could also develop a mission statement, a mantra, or a vision statement. A mission statement states your company’s long-term goals and what these are for three specific groups of people. These are your:
Market / Industry Analysis
Companies need to have a good handle on their industry, as well as their target market. Therefore, this section will provide information on your business industry and its strengths and weaknesses.
Products or Services Offered
As its name suggests, the products and services section of the business plan will describe your company’s offering(s). It may also include pricing, product lifespan, and benefits to the consumer.
Those who read your business plan will want to know about any market competition. Therefore, find out as much as possible about your competitors, analyze how they market to their customers, initiate sales, and keep up with any changes in the industry or economy.
Before anyone invests in your business, they typically want a complete understanding of how you will use the funds. Therefore, this business plan section should illustrate how the company is organized, including the key members of its management team, along with information about the founders or owner(s), its board members and advisors.
Marketing Strategy and Analysis
In the marketing strategy and analysis section, provide details on how your company will attract – and keep – customers. This includes how you intend to reach potential customers. Here, you should outline a clear distribution channel.
This section of the business plan will also spell out how your company plans to market and advertise the type(s) of media and communications channels to get the word out about what it offers and how it can benefit customers.
Most new companies will need at least some financing to start. These funds could come from the owner(s)’ personal savings, loans, investors, or various other sources. In the financials section of the business plan, include your company’s financial planning and projections.
Some items included in this section are:
- Financial statements
- Balance sheets
- Other financial data
New businesses should ideally include targets and estimates for the first few years, plus a description of potential investors. Some of the critical areas of the financial section of your business plan will include the following:
- Income statement
- Cash flow projection
- Analysis of break-even point
Most companies should have a budget in place. This is true whether it is a start-up or has been in business for many years. In your business plan, you should include the costs that are related to:
- Product development
- Other expenses related to the business
Does Your New Business Have a Plan?
All strong structures should have a foundation. This is why your new business should have a plan. There are many online business plan templates available. However, a business startup specialist can provide you with more in-depth details about how to start your specific company.