Within the last decade, there has been a constant decline in the number of available jobs in the US. Knowing how to develop a business plan at this point is key to your survival in such a rapidly declining economy.
Before we get started, let’s get a quick glimpse at what a business plan is.
Are you ready? Let’s go then!
A Business plan is mainly used to manage an organization by documenting its goals, how these goals will be achieved will achieve it and the stipulated time frame to achieve these goals.
This might take a lot of time at the initial stage but it is worth your investment in the long run. Knowing that your business plan only has a few minutes to make the right impression, you should try to do the best you can so that it can represent you as the capable, competent, and trusted business owner that you are.
In this article, you will understand various tips and the components required to develop a compelling business Plan.
In case you’re wondering why you need to know how to develop a business plan, first read about reasons why you need a business while working a job!
Easy Steps On How To Develop A Business Plan
Every business plan must include the following:
This should always be the first page of your business plan, it is the overview of your business plans and is ideally one or two pages. Your executive summary should cover the highlights of your detailed plan.
In most cases, investors only ask for the executive summary when evaluating your business. If it is compelling enough, they might go ahead to request a complete plan or presentation.
Your executive summary should contain a summary of the problem you are solving, a description of your product or services, an overview of your target audience/market a brief description of your team, and a summary of your financial and funding requirement if any.
The Business world is a competitive place so here you need to explain how you intend to thrive in your industry regardless of your competitors. Here you talk about your target market i.e the set of people you intend to sell to.
Your pricing strategies, how it aligns with getting the attention of your target market, and their comparison to your competitor’s strategies. Also if there is any important regulatory information or policy that affects your industry or target market, it should be stated here.
Marketing and Sales
This part of your business plan clearly defines your channel of distribution i.e how you plan on selling to your target market and strategic activities or partnership that will make the business a success.
This section of your business plan can be a good place to include the SWOT(Strength, Weakness, Opportunities, and Threat) analysis of your business.
Although it is optional, it is a good way to explain how your products and services will be positioned to deal with competition and take advantage of opportunities.
One of the bloodlines of a business is having a great team. In addition to great ideas, many Investors lookout for great teams.
Use this chapter to talk about your team and who you need to hire, include brief bios that highlight the relevant experiences of the key team members. It is important that you state why the team is the right team to execute the business objective.
Aside from having a great team, another major factor in running a business is capital. Businesses don’t run on good ideas alone, it requires capital too.
This is the area that most business owners find daunting but this shouldn’t be the case.
For a startup, it is less complicated than you think and you honestly don’t need a degree to create a solid financial statement. Having said that, here are some recommendations that will guide you when creating a solid financial statement.
Profit And Loss Statement
The information provided here will determine if your business is making a profit or running on a loss.
Cash Flow Statement
This statement keeps track of how much cash you have at any given time. By this I mean, the amount of money you have in the bank.
The list of Assets, Liabilities, and equity in your company.
If you are requesting funds from your investors, you should include a brief session in your business plan that explains how you plan on using your investor’s money. Also, discuss any assumptions.
This is not a chapter in your business plan. However, It is a good place to put charts, tables, legal notes, or any important information that felt out of place to include in the other components of your business plan.
Tips For Developing A Business Plan
- Understand why you need a business plan. This will help you determine your approach when writing.
- Keep it short and simple, there are no awards for the most lengthy business plan. The briefer it is, the easier it is to read.
- Have someone else review your plan, an extra eye won’t be a bad idea. It’ll help in spotting errors easily and identifying places that need to be improved.
- Be realistic: Let your plan be based on results gathered from your analysis.
- Avoid using Vague Statements, be as clear as possible.
- Use a free business template if you need to. No man is an island of knowledge.
There are several reasons for writing a business plan but whatever the intention might be, make sure it is thorough, accurate, and most importantly backs up all your objectives with facts.
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