When opening or expanding your business, don’t forget the crucial step of writing a business plan.
What is a business plan and who needs one? A business plan is a detailed document that explains your objectives, how you are going to reach them, and how much money you will have to spend to reach them. Every business – whether it is an enormous multinational corporation, a family-owned small business, or a one-person home business – should have a business plan.
Why take the time to develop a business plan? There are several benefits for your company, including:
- Your business plan allows you to lay out specific information about your business so you can see strengths and weaknesses.
- Gives potential investors and lenders some insight into your business.
- Allows you to develop specific strategies and goals.
- Gives you a tool with which to evaluate your strategies’ and their efficacy.
Every business plan varies according to the size of the business, as well as the industry. The important thing is to make yours clear, logical, and accurate. There are some basic components that all business plans should cover.
- Executive Summary – this is a history of your company, its mission statement, its products, its organization and structure, and most important, its goals and objectives. (It is easier to write this section last, even though it appears first in the completed business plan.)
- Market Analysis – in this section of your business plan, you detail your knowledge of the industry in which your business operates. What is the industry outlook? Who is your target market?
- Competitive Analysis – who are your competitors? How will you outperform them? This requires a lot of research and investigation.
- Marketing and Sales – this is a detailed list of your marketing objectives and strategies as relates to advertising, pricing, packaging, distribution, public relations, and more. This is another area of your business plan that requires a lot of research, but can be invaluable in helping you make informed decisions.
- Products or Services – in this section, you talk about what you sell and why it’s better than the competition. In other words, why should people buy from you as opposed to your competitors? How can you most effectively promote your products or services?
- Financial Needs – here, you discuss the funds you will need to start or expand your business. Potential investors or lenders will want to see how you plan to spend your money.
- Finances – If your business is not just starting, you will provide a financial history, which is information on how your company has performed in the past. Information can be found in balance sheets, cash flow statements, and income statements.
If your business is just starting out, you will need to provide a projected financial data in your business plan, which is what you expect your business will make based on industry trends, market demand, and more.
To help you put these sections into a good logical order, you can find business plan templates and sample business plans online. In addition, there are software programs that you can purchase that guide you through the process of writing a business plan. If you need more support, you can hire a professional business plan writing service.
Whether you write it yourself or have professional help, a business plan is a necessity in today’s business world.
Look at these resources to help get you started.
Information on business plans from SBA
Business Plan Software
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