Did you know that most businesses fail due lack of a well-written business plan? The truth is that most entrepreneurs lack the basic knowledge and skills to write this vital business tool. A business plan is not only an essential tool for a business start-up, but also acts as a strong foundation. Learning how to write a business plan is the first thing that every aspiring entrepreneur must do.
You will be able to construct a good business plan after you discover some helpful tips on how to write a business plan efficiently.
- Start by writing a well-outline Executive Summary
Your business plan must have a short but precise summary which highlights the key aspects of the business. You should introduce your company; give an overview about your business idea, and what you expect in the future. The words should be clearly stated and easy to understand.
- Company’s Profile/Overview
Give a brief summary of your company and ensure that write it in a way that is easy to capture the reader’s attention. A good company overview should outline the mission and vision clearly. Tell your investors about how you intend to run your business, what you want to accomplish, how to reach the target market, and how to deal with competition, and how you plan to keep things going. Give a clear explanation about your future plans. Let your readers know about future business expansion, partnership plans as well as financial expectations.
The overview must also include the company’s current legal structure as well as the type of ownership (sole-proprietor or partnership) if it’s an existing business. The investors will want to know the structure of your business before making the final decision. A company’s history is also important. Make sure that it’s included. Finally, include the company’s location by including the address. Include details like business assets, workforce and the facilities present. For a start-up business that requires large facilities like a warehouse or a manufacturing plant, include the details.
- Products and Services
Use this section of your business plan to explain the type of products and services you intend to offer, how the product/service will be used as a solution to the consumers’ needs, how they will provide a solution to the consumers and how you intend to improve your brand in the future. Describe how you intend to compete with other companies offering similar products/services.
- Target Market
Target market- Whom do you intend to sell your product/services to? Investors will probably not invest in a business that does not have a rough estimate about the number of customers it intends to attract with their products/services. This section should clearly state how you plan to sell your products/services and to the type of customers who will most likely buy them. Don’t sell yourself short on this. Be optimistic.
- Marketing and Sales Plan- How are you going to advertise your products/services?
In this section for your business plan, include important details of how you intend to reach the target market, how you plan to sell your products/services, which is the right time to sell your products/services, what your pricing plans are, and how you intend to advertise/promote your company to potential customers as well as the products/services you intend to offer. Which distribution channels are you planning to use? Will you use direct, retail or wholesale distribution channels?
- Include the Milestones and Metrics
Investors need to know how you plan to do so as to make your business plan work. Include crucial details like a schedule, implementation plans, key responsibilities and roles as well as goals and objectives. Include the key metrics that are useful to monitor the growth of your business and points out trouble signs early.
- The Management Team- Do you have the right team?
Investing in a good idea would be meaningless if the people behind it are not strong enough to help accomplish the business’s goals. This section should explain about the perfect team you have or intend to have as well as their roles and responsibilities. Let the investors know that their investment to your business is handled by the right people.
- Financial Plans
This section is very important and should clearly state how you plan to use the funds provided by the investors. These financial plans are your sales forecast (how much you are going to sell in the future), personnel plan, profit and loss statement, cash-flow statement, balance sheet, use of funds, and the exit strategy. Investors will likely be keen on this section and so, you need to be serious when writing.
A good business plan should be written in a way that it gives the investors a clear mental picture of your business. Get down to work and write the best business plan ever!