Are you thinking of starting a business and you worried how to go about it? Worry less, we got you sorted via our elaborate business plan writing guide. First you must plan by setting goals and a budget to guide your policy.
A business plan is a written document describing all internal and external elements and strategies for starting a new business. It is a blueprint for how you will operate your business. Apart from being beneficial to you in organizing your activities, it can serve other purposes such as seeking investors, getting a loan among others.
The following components will form our elaborate business plan writing guide:
1. Introductory Page
This component contains the name and address of the business, names and address of principal shareholders, nature of the business, statement of financial requirements and statement of confidentiality report. Your business plan must emphasise more on tasks and approaches.
2. Executive Summary
Executive summary summarizes what the business is intended to accomplish. In other words, it summarizes all the components of a business plan. It should state what resources the plan wants, why it is essential and the repayment mode.
It must show why your company exists, what it does for clients and why it is important. It also highlights the succeeding goals you hope to achieve and what it means for the development of your organization. It also includes the mission and vision statement of the business.
3. Industry Analysis
Industry analysis describes the analysis of the competitors, comparing the business to the direct and indirect competitors. This component also highlights the future outlook and trends in the industry.
In this category, you must outline size of the industry by number of firms and revenue, characteristics, factors influencing growth and decline, trends, barriers and government regulations.
Once you identify your competitors, you must know how their customer service is, their sales and pricing and where they advertise.
4. Company Description
In this component, the business plan explains the kind of products and services to be offered, the size of the business, how the business will be different in offering services from other businesses in the industry as well as the quality of the products and services. It must have the legal description. It must also include mission statement, history and objectives.
The objectives must be specific, achievable and tied to key results.
5. Production Plan
Production plan outlines the process of manufacturing in the business, taking into account the physical location of the business, the machinery required and suppliers of raw materials.
You must explain how you create your products, source raw materials, maintain quality control, supply chain logistics and manage your daily operations. It also entails explanation of any patents, copyrights, trademarks, trade secrets and contracts.
6. Operational Plan
This component explains how the company will operate like the flow of orders for goods and services, how new technology will be utilized in production and how many employees will the company need. It also entails business systems, accounting, human resource, supply chain , insurance plan and compliance plan
7. Marketing Plan
Marketing plan describes the pricing of the goods and services, how they will be distributed to the market and the strategies to market and advertise them. It must have a location where the target market can find the services. After identifying your market, you can reach them through advertising platforms to learn how unique your company is.
Be clear on your target market in terms of who is likely to buy your products and services and understand your demographics. Is your target market static, growing or shrinking? What percentage of the market share can you command?
This component of our elaborate business plan guide has the following key sections:
· Market segmentation
How is your target market segmented? Is it based on consumer class and their variation in product quality and pricing?
Know your top 5 competitors in terms market share they do command. Research and come up with their strengths and weaknesses. Be clear with your plan on beating them based on their weaknesses and strengths.
Pricing of products and services is key but you don’t just through price tags on your products. Find out how your competitors price their products and outline a strategy that will base on your entry level, quantity, quality, packaging and area. Your pricing policy should indicate how you will break even and adjust to changes that arise in the market.
Which methods will you use to advertise your business and the cost for each. What kind of systems will your business use to track performance and capture metrics? How often will you run the advertisement campaigns?
8. Organizational Plan
This component summarizes the structure and team of the business. This includes the ownership of the business, partners and shareholders of the business, it states the background information regarding management team and the roles and responsibilities of each member in the business.
9. Risk Assessment
This evaluates the possibility of the business being affected negatively. Things considered may include strengths and weaknesses of the business, adoption of new technology, challenges likely to be encountered as well as the solutions to the challenges.
10. Financial Plan
Business plan writing guide will not hold water if it lacks a financial plan. Financial plan section states the source of finance for the business, the financials goals and expectations from the business basing on the market research conducted, projections of cash flow and performer balance sheets.
A financial plan comprises of a cash flow that has the following sections:
· Income Statement
· Total Net Sales
· Cash Flow Projection/Forecast
· Cost of Sales
· Gross Profit
· Gross Profit Margin
· Break Even Analysis
You might also think of net income, debt repayment ability and how often you collect on your invoices.
11. Expansion and Exit Plan
State how will expand your business or exit the market in this module. Your plan should cover your long rage goals, how intent to increase your market share, ways of diversification and penetration.
Will consider a merger, franchise, go public, sale the business or buy other businesses, sale shares or close down completely?
This section contains documents that support the business plan like data from suppliers, market research data, price list from suppliers among others. The appendix convinces the readers of how focused the owner of the business plan is to the goal.
Conclusion on business plan writing guide
You are now equipped with information on how to write your business plan. This elaborate business plan writing guide can be modified in whichever manner to suit your business needs. Never start a business without a well documented plan, it’s the plan that maps the future, gives a leverage on funding, attracting investors and letting your organization remain on the core objectives and goals.