Business Plan – The Basics
A comprehensive Business Plan is a manual for all the tunings required in any start-up business. I remember reading on the back of several trucks in Australia “We keep Australia Moving”. The enthusiasm and passion give business owners the necessary drive to take their business to new highs but it is the fine-tunings required now and then which make sure that the journey goes smoothly.
Writing a Business Plan and why!
A business plan is supposed to incorporate all the necessary information about the:
- The mission of the business
- Goals set for every day, month, or quarter
- Financial information about costs and expected revenues
- Requirements of capital investment and its sources
- General procedures covering day to day activities
- A course of action against uncertain events
- And more!
A business plan can be as elaborate as a book of LAW or can be as simple as a short essay. The owner will remain more focused, prepared, and will feel more confident when he has a detailed business plan ready in his hand; like a guide showing him the way.
Make a habit of in-depth planning
In our more than 10 years of experience, we have seen many businesses fail because of bad planning. Planning means that you research about possibilities of things that could go wrong and decide a response in advance to avoid or tackle that issue.
In-depth planning means that you think about the various aspects of your business and write it down in a planning document called Business Plan. This document will serve as a guide to your future decisions and operations.
Show the viability of your business or new project
A basic Business plan includes:
- Market Analysis,
- Industry Analysis, and
- Financial Analysis.
Preparing this document means that you have thought about the various factors that might cause trouble for your operation, whether they are related to your industry, market, or finance. This, in turn, will prepare you for the worst cases, and therefore it is important to prepare this document with as much detail as possible.
During and after its preparation the owner will get to know the actual expectations. When you start to write things down then you can yourself eliminate false expectations and exaggerations from your ideas!
Let it show you the way!
Once you have conducted the above-mentioned researches and formulated the planning document accordingly. Then comes the time to shine!
A key difference between you and your competitor who does not have a business plan will be that you will already know all that lies ahead and are better prepared to navigate your business through the twists and turns of the road ahead.
This preparation will become your competitive advantage and it will separate you from the list of failed businesses and put you on top of them.
Investors will see your commitment
Every business requires funds for operations and having a business plan ready will show the prospective investors that you are willing to walk the extra mile. That you know exactly what it takes to become successful and this will provide comfort to the investors willing to invest in your business should you require some in the future.
Contents of a Business Plan
You can have all of the below-discussed contents or less or even add more components you think best for your company specifically. Below are the components we think a Basic business plan should have.
As mentioned in the name that it is a summary. So, it outlines the key information from each or most desired sections from the whole document. It is necessary because the readers may want to save their time before going through the whole document.
It is important to make this section not only eye-catching but also informative as many readers may not read ahead if they are not satisfied with this section of the document. Show the financial figures and your analysis of the market including your operational strategy to the reader in this section.
Description of the company
Right after the Executive summary comes a detailed description of the company. This will show your unique qualities and perception of your brand to the reader.
Readers will be keenly interested to know about:
- What do you do?
- How do you wish to do it?
- What do you want to achieve?
- Which industry do you target and serve?
- Who are your competitors?
- What makes you different?
- What will be the structure that your company will follow?
- Who are the partners/ directors or key personnel of the company?
- What are their credentials?
List of the services
This section will provide the readers with this documented knowledge about the services provided by the business. List all the products or services that your company plan to offer or produce along with pricing strategies and expected levels of production.
A business can only thrive if there is a demand for the services it is providing. Marketing analysis is conducted to analyze the demand and show the potential of growth within the industry. It also shows where your business can fit in and what gaps you can fill.
It also needs to provide information about the competition faced and the various industry and economic trends.
Marketing and sales
Knowing about the company is one thing but the management and the stakeholders are keen to know about the expectation of revenues of the business. This section provides them with information about future sales and expected growth.
Sales are proportionally dependent on marketing, unfortunately. And the quality of service and advantages only comes after someone knows about your company. Marketing strategy, therefore, plays a vital role in the success of a business, and the investors, as well as the top management, are especially keen to read about the company’s strategies in this section.
Enough about strategies and plans and all the discussions! In this section, the reader will look for numbers and they know how to make the numbers talk.
You need to make sure that the financial information provided in this document is reliable and true to the best of your knowledge. You need to show in this section the following:
- Costs of goods sold
- Variable costs
- Apportioned fixed costs
- Fixed Costs
- Administrative costs
- Finance costs
- Other expenses
- Planned capital expenditures
- Assumptions of growth
- Cash flows
And you need to present the above including your analysis of the future along with the standardized financial statements (expected).
It is not necessary but recommendable to add an appendix. This can provide additional information like a letter of reference and bio-data of the founding members etc.
In preparing the financial analysis, a lot of factors, and their impacts on the financial viability becomes highlighted. It is recommendable to look into those cost factors and make strategies to either limit or control those costs.
It is also recommendable to review this document after certain periods to compare the expected outcomes versus actual outcomes and make changes to this document accordingly.
Free Business Plan Template Download
The free Business plan Template would help you to create a business plan section-wise. You need to fill in the key questions in each section. If you simply want to start in the right direction, then this free Business Plan template is the best fit for you.
We do offer a customized investor-ready Business plan. If you require our service to craft your business plan, feel free to contact us at firstname.lastname@example.org or visit the page Investor Related Document and Business plan Service.