Formulating a Business Plan: What Should I Do?

Are you starting up a small business? You’ll need a detailed business plan to help you set your goals. Having an effective business plan will also help you get everyone involved to be on the same page while you are working through the feasibility of your small business.

While there are no hard and fast rules to creating a small business plan, there are some essential steps to be taken. In forming your business plan, put your ideas on paper and follow these simple steps.

Write an executive summary

Before you go into the specific details for your business plan, write an executive summary where you will give a brief insight into your line of business, goals, and potential. In this section, explain what your company is, where it will be located, what you are going to sell and who you will sell it to. Also, identify your business structures, its owner, your past experiences, and the products or services you’re going to offer. Your market analysis and financial considerations should also be explained. This is the first part your audience will be exposed to, so make it engaging and interesting.

Create your company description

You need to write your company description. Take this chance to provide a summary of your mission statement, and business structure. The company description should provide more details about the business owner and the business location, your target marketplace, and the advantages of your products or services. You’ll also need to describe your main customers and how you plan to succeed as a startup.

Study market conditions

One of the questions you need to answer is whether your business has a place in the market. Your target market will definitely dictate if your business is going to be successful or not. Be specific about your target market and identify their details such as age, location, needs, and preferences.

You will also need to add a competitive analysis that provides information on your immediate competitors. This will give you a hint on how your business can gain market share by taking advantage of your competitor’s weaknesses.

Describe your product or service

This is where you can share the details about your products or services and how they can benefit your customers. If you are not able to articulate how your business can help your customers, your business idea may not be a great one.

In this section, describe the problem you are trying to solve and how you plan to solve it using your product or service. Next, describe the competitive landscape and identify the companies that provide the same solution in your area of business. Express for your target audience what sets your business apart from your competitors.

Outline your business structure

This section focuses on your business’s distinctive organization and management structures. Talk about who handles a specific task and how the responsibilities will be assigned to each team or each person. Highlight your relevant experiences in the industry as well as your team members’. If you have a track record of small business success, then you should give emphasis to that. You may also include an organization chart or a short bio of each team member.

Design a marketing strategy

Plan a comprehensive marketing and sales strategy that you are going to use to sell your products and services. You can achieve this by asking yourself these questions:

• • How do you intend to penetrate the market?
  • What’s your master plan in growing your business?
  • How are you going to distribute your products?
  • What’s your main communication platform between you and your customers?

Be clear about your marketing and sales strategies and provide specific options.

Create a financial plan

Of course, you’ll need a financial plan so you can manage your finances well. Outline your financial model, including your start-up costs and financial profit projections. List all the resources you need and how much they will cost, such as office space, computers, and phones. Be honest about your estimates so you will know your exact start-up cost.

If you want to convince investors, you have to make sure your financial model is clear, accurate and feasible. 

Make a funding request

In order to secure funding, you need to make a funding request. State how much money you need to start your small business and maintain its initial operations. Provide a summary of how you plan to use your start-up capital. Also, give a timeline or a deadline for your funding request.

To support your funding request, provide financial statements and projected cash flows for the next 5 to 6 years or until your small business becomes stable.

Include an appendix for more information

Close out your business plan with an appendix where you can provide additional information about your business, such as financial statements, permits and licenses, and other legal documents. You should also elaborate risk factors clearly and indicate that you are well-prepared for these risks. That extra bit of information helps reassure potential clients and investors of the profitability of your company.

Why should you make your own business plan

Every business starts with a plan and if you follow it throughout your venture, you will have a clearer direction for your business and eventually achieve the intended success.  Now, if you have small business ideas in mind, then get your pen and paper ready to form a business plan and start putting your thoughts into reality.

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