What is a business plan? At its simplest form, a business plan is a written guide or simply a roadmap for your business. It plainly outlines your business goals and how you are going to accomplish it. A well-drafted business plan enables both partners and investors to understand what you are trying to achieve and how you are going to do it.
Why should you have a business plan in place?
Every business will have short-term and long-term goals/budget plans and sales targets. All of these aspects are encompassed in a business plan and helps identify different market opportunities. It focusses on major business criteria such as ambition, strategy, sales, marketing, and forecasting.
Creating your own plan might be a complex process as it includes certain key elements. In this article, let us explore as to how you can write one effectively.
An executive summary is an introduction or the blueprint of your plan. A well planned executive summary should provide the reader with a short and clear sketch of your business objective. It provides information on what you are trying to do in not more than three to four paragraphs.
Table of content:
The readers of your plan might be interested in a particular section and hence they would want to hop to their desired page. Having a table of the content page in place helps them to quickly head out to the right section.
Need for your business (opportunity or scope):
Your business should fulfill a demand or offer something that the market needs. This section should contain the information which explains the difference that your business can make. You should provide an answer for the basic questions such as what is the problem that you are solving or what do people get out of your business.
Business model (products/services you’re offering):
In this section, you need to explain how you deliver value to your customers. It has information about the products/services that you are offering including the quality and benefits.
The market analysis:
Your potential investors will want to know the size of your target area and future growth potential. To prove the fact, you will have to do some research and outline the need for your product or service in each market. This section also helps your investors understand the competitive landscape, including who your rivals are and your position in comparison to them.
Competitor analysis is a critical part of a business plan. Here, you will note down your major competitors including their strength and weakness. You will have to evaluate their business strategy and relate them to yours. This gives an idea about how you are going to compete effectively with other competitors in your area.
This is another important section where you can elaborate about running your business steadily and implementing new business strategies. Under this section, you will have other sub-sections such as operations, sales and marketing, standards and so on.
A management team has to be pulled together as you develop a business plan. Here, you will have to outline your key personnel along with their position and expertise in the field. Their duties and responsibilities have to be clearly identified so that you get the right mix of people to reinforce your business.
The financial plan:
The financial section of your business plan will be the center of focus for your investors as it determines whether or not your business idea is viable. This section is comprised of three statements such as the cash flow projection, the income statement, and the balance sheet. A brief explanation and analysis of these three statements are necessary along with the financial data of your foreseen expenses.
Appendices and exhibits:
An appendix is otherwise called as the mini library. It holds the entire business plan’s official documents such as bank statements, receipts, inventories, business contracts and so on. These documents help substantiate and support your proposal.
Update your business plan:
Finally, you will have to frequently revisit and revise your business plan to address new changes. Your investors and clients might consider an outdated business plan as a bad sign. Before you head out for company formation in the UK, we recommend you to draw a firm business plan to manage and solidify your long term goals.