Businesses need a solid business plan for more reasons than as a means to apply for a loan or investment. They need it as a road map on how they will run their business and to ensure they will be profitability for years to come. The more time and consideration a company puts into their business plan, the better guide they will have for success.
A solid business plan should forecast expenses, cash flow, receivables, and the company’s expected profits. It should clearly list your future goals and the methods you plan on you using to achieve each objective. It should outline all of your management, marketing, and financial strategies in detail.
Here are some fundamental components to a successful business plan.
– Detailed Business description and purpose
This should be a summary explaining what your business is about and why your product or service is necessary. It doesn’t need to be very lengthy as long as it covers the big picture in regards to your business.
– Executive summary
An executive summary emphasize the main points of your business plan in brief detail. It should be something that grabs the attention of the reader, since you will want potential investors to continue reading.
– Marketing strategies
These should cover your marketing budget for the first year and how you plan on using it to attract business. You should include sample advertising pieces and details explaining your expected ROI on each aspect of your marketing plan.
– Competitive analysis
The competitive analysis should cover your major competitors and what makes your product or service superior. It should explain what your competitors are doing successfully and areas that you plan on improving on.
– Design and development plan
The purpose of the design and development section is to provide investors with a description of the product’s design, chart out its development from conception to completion, how it will be brought to market, and the company itself. This section should also include a development budget that will allow the company to reach its goals.
– Operations and management plan
This part of the business plan essentially emphasis the fact that a business is an ongoing entity. Operations and Management plan covers planning, scheduling and control of a manufacturing or service industry and anything involving production processes, design engineering, industrial engineering, quality management, inventory management, accounting and other functional areas of your business. It is the guts of a solid business plan.
– Financial plan and methods of bookkeeping
This section is crucial and covers everything from how you will be able to fund your business, how you plan to profit from your business, and your method of managing your finances. Potential investors need to see that you have a plan for making money and a method for accurately monitoring your financial situation.
A good business plan will essential be a manual on how your business plans to be successful. The average length of a business plan is 15-20 pages, but you should take as many as you need to cover every aspect of your operations. It should be referenced throughout the life of your business and updated as things change.