Simply having a great business idea is not enough to start a successful company in 2021. In fact, if you decide to create a firm driven only by that sole idea, chances are that your brilliant concept will get stolen by a more business-savvy entity. Many years down the line, you can end up witnessing your creation becoming wildly successful under someone who ripped it off of you, only because you were naive enough to try and develop a product or service without a good business plan. Starting a business without a plan is equivalent to your firm facing a financial catastrophe without professional continuity software at hand — plain irresponsible.
Writing a business plan is one of the first things you should do when planning the launch of your own start-up. Take your time and analyze everything from start to finish — things like where you project your company to be in five years, who your potential customers are going to be, as well as a clear and concise summary of the project, are going to help you attract lenders and investors to your idea.
If you don’t know where to start, don’t worry! In this article, we’re going to introduce you to some of the most important elements of an effective business plan, and give you some tips on what exactly you need to include within it.
Your executive summary should be no longer than one page and is usually written after you complete the other parts of your business plan. Make sure to position it at the start of it, though! A good executive summary should include the following:
01. Company name and a short description,
02. A detailed description of the business,
03. Business goals and strategies to achieve these goals,
04. Projected income and expenses for the first year,
05. Current owners, the amount of stock each has, and how much it’s worth.
Aside from passing your executive summary to potential investors, you can also use it to convert people into customers! Many businesses see large increases in their revenue simply by sending potential customers an executive summary that contains a call to action.
Your market analysis needs to be thorough and carried out with attention to the minutest of details. This is the part where you decide exactly what your opportunities are. The more you know about your market, the better you will do your advertising and promotion.
If you want your picture to be as complete and objective as possible, it is highly advisable to use market research companies. It is perfectly feasible to take this task on yourself but this can be time-consuming and consequently expensive. If you decide to use an expert, check their credentials before signing any contract. Ask for client references and compare their approach with that of another researcher.
Analyzing the competition is another key component of any business plan. You can break down your competitive landscape by answering the following questions:
01. What is your competition doing differently from you?
02. How can you do the same thing or beat your competition at their own game?
03. Who is your ideal client? What is your competition’s value proposition for that ideal client?
For the purpose of gathering this information, start looking at what is working for your competitors and how to cut costs so that you don’t have to spend as much as them, and therefore be able to launch with competitive pricing. If you like specific features in your business that a particular competitor offers, see what features you can mimic and make unique to your business. This will help you eliminate features that may be costing you money without adding much value to the client experience.
Management and Operations
Here, you should focus on describing your management team and ownership information. This part should outline your company’s activity and assets. Do not neglect to mention how your company will operate and how it benefits the customers.Finally, you should add information about future plans and developments for your site. These can include planned expansions or new services that your company intends to add to its current services.
Take note that a lot of prospective partners will want this information on the first page of your proposal too (in the executive summary). This means you might have to repeat yourself.
Finally, the financial summary part of your business plan is the one where you outline your expected income and realistic financial projections, as well as balance sheets that describe your current financial state. You should also include projected expense breakdowns and a budget. This gives a potential lender a simple overview of whether or not your business has the ability to repay a loan.
The Bottom Line
This guide can help you structure and write a great business plan. When you are finished, you will have created a document that is surprisingly easy to follow. This way, you can clearly explain your goals, strategies, and how you plan to achieve them. Use these tips to stay organized and focused on your goals.
Remember that there are also other things that you may want to include in your business plans, such as the mission statement, marketing plan, or a balance sheet with your currently owned assets and liabilities.
If you don’t have much to include in these parts, it’s probably best to leave them out instead of filling them up with useless, filler content. Stick to the key elements we’ve outlined above, and you’ll have a solid foundation for the future development of your company. Good luck!
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