Writing a business plan
A plan, put simply, is a statement of intent. The purpose of a plan is to organize resources in order to achieve a desired outcome. A business plan is a blueprint of the company; a written summary of the company\'s mission and goals and the means that would be employed to achieve these goals. A good business plan gives a well documented and logical outline of the company presented in a standard business format. It is a tool which will chart the course of the company and will include information about the
- Purpose of the business
- Description of the management team
- A description of the products or services
- An analysis of the market and competition (including customers, suppliers, opportunities and threat)
- A detailed descriptions of the strategies that will be employed to make the business work
- A financial analysis (including sources and types of finances required)
- Operating costs
- Sales and cash flow projections
Who needs a business plan and why is it important?
The success of any business depends mainly on the decisions made. Anybody whether starting a new business, running or buying an already established business, looking for funds or just wanting to communicate with the management team, customers, suppliers or others needs a business plan. A business plan is the best means to ensure continuing success and optimal growth. A carefully researched and well-written business plan will function as
- a vision statement of the company; helping to identify the strengths and weaknesses of the company
- a vital communication tool
- a tool for obtaining finance
- An operating tool for planning, managing, assessing and enhancing the functioning of the business continuously
- A source for sound decision-making
Components of a business plan
Just as no two businesses are similar, no two business plans are similar. It is vital to customize a plan\'s content to suit individual requirements as certain issues in a plan maybe more pertinent to some businesses. Nevertheless, a business plan contains the following key components:
- Title page
- Executive summary
- Table of contents
- Mission statement
- Description of the business and industry
- Product/service, market analysis and marketing Plan
- Competition
- Management team and Operations plan
- Financial plan
- Critical risks
- Exit strategy
- Appendix
Pointers to remember while writing a business plan
Firstly, establish who would be reading the business plan. The plan will be viewed differently by various types of people. A venture capitalist would be more interested in assessing the potential return on investment whereas a banker would look for stability, low risk and security.
Keep the language simple, precise and easy to read and understand. Do not overdo and make the plan too lengthy.
Keep in mind that the introductory summary or the executive summary is an essential section as it will secure the reader\'s interest and urge him to read the remaining part of the plan. Highlight the significant parts of the plan in this section.
Make sure the focus is on the market and the market projections are realistic. Make sure the market is clearly defined with a clear picture of potential customers.
Do not overlook competition. If there is no competition at present there definitely will be competition in the future. Investors will be interested to know how the product or service offered is better than others and also, how this competitive advantage will be utilized.
Highlight the company\'s distinctiveness whether it is in the form of copyrights, patents or any other feature that gives the business a competitive edge.
Highlight the management\'s strengths and specify their credibility.
Give a detailed and realistic financial projection. Investors would be interested in a financially growing business but keep the projections credible and validate all important assumptions.
Tools available to help write a business plan
Business plan templates are available to help write a business plan. These templates provide an outline or a basic structure of a business plan. There are different types of templates available for different business type and markets. These templates can be customized to suit individual needs. Sample business plans also help in writing and/or editing a business plan. These samples provide the actual write-up complete with formats, charts, tables, presentations and financials of either a real business or are based on a real business.
Other Articles
