A good business plan shows you how to start and run your business at every step. Your business plan will tell you how to set up, run, and grow your new company. It helps you think about the most important parts of your business.
A business plan can help you get money or find new people to work with. Investors want to be sure that their money will be put to good use. Your business plan is what youâ€™ll use to show people why they should work with you or invest in your company.
A business plan can be written in any way you want. What matters is that your plan works for you.
Most business plans fall into either the traditional or lean startup category.
You might like a traditional business plan format if you are very detail-oriented, want a complete plan, or want to get money from traditional sources.
You donâ€™t have to follow the exact business plan outline when you write your plan. Instead, use the parts that make the most sense for your business and your needs. Most traditional business plans have a mix of these nine parts.
Tell the reader in a few words what your business does and why it will be successful. Include your companyâ€™s mission statement, the product or service it sells, and basic information about its leaders, employees, and location. If you want to ask for money, you should also include information about your finances and high-level plans for growth.
Use your company description to tell people everything they need to know about your business. Explain in detail how your business solves problems. Be specific and make a list of the people, groups, or businesses that your business plans to serve.
Explain what your business has going for it that will make it successful. Does your team have any experts? Have you found a good place for your store? Your company description is where you should talk about how great you are.
Youâ€™ll need to know a lot about your industry and the people you want to sell to. Researching your competitors will tell you what they are doing and what their strengths are. Look for trends and themes when you do market research. What do successful competitors do? Why does it work? Could you do a better job? Now is the time to give your answers.
Tell the reader how your business will be set up and who will be in charge.
Explain how your business is set up legally. Indicate whether your business is or will be a C or S corporation, a general or limited partnership, a sole proprietorship, or a limited liability company (LLC).
Use an organisational chart to show who in your company is in charge of what. Show how the unique experiences of each person will help your business succeed. You might want to include the resumes and CVs of your teamâ€™s most important members.
Tell people what you sell or what you do. Tell your customers how it will help them and what the productâ€™s lifecycle looks like. Talk about your plans for intellectual property, such as filing for copyright or a patent. Explain it in detail if you are doing research and development for your service or product.
A marketing strategy can be done in many different ways. Your strategy should change over time to meet your specific needs.
In this section, you should talk about how youâ€™ll get customers and keep them coming back. Youâ€™ll also talk about how a sale will go down. Youâ€™ll come back to this section later when you make financial projections, so describe your marketing and sales plans in detail.
If you are asking for money, this is where you will explain what you need. Your goal is to make it clear how much money youâ€™ll need and what youâ€™ll do with it over the next five years.
Indicate whether you want debt or equity, what terms you want to apply, and how long your request will be valid for. Explain in detail how you plan to spend the money. Indicate if you need money to buy equipment or supplies, pay salaries, or pay certain bills until your income goes up. Always describe your long-term financial goals, such as paying off debt or selling your business.
Add financial projections to your request for funding. Your goal is to make the reader believe that your business is stable and will make money.
If your business is already up and running, include the last three to five yearsâ€™ worth of income statements, balance sheets, and cash flow statements. Make sure to list any other things you could use as security for a loan.
Give a forecast of the finances for the next five years. Include income statements, balance sheets, cash flow statements, and budgets for capital expenses that are based on projections. Use even more specific quarterly or even monthly projections for the first year. Make sure your projections are clear and match up with your requests for money.
Here is a great place to use graphs and charts to show how your business is doing financially.
Use your appendix to give special requests for supporting documents or other materials. Credit histories, resumes, pictures of products, letters of recommendation, licences, permits, patents, legal documents, and other contracts are common things to include.
You might like a lean startup format if you want to explain your business quickly or start it up quickly, if your business is pretty simple, or if you plan to change and improve your business plan often.
Lean startup formats are charts that show your companyâ€™s value proposition, infrastructure, customers, and finances using only a few key points. They can help you see tradeoffs and important facts about your business.
A lean startup template can be made in different ways. You can look on the Internet for free business plan templates. Here, we talk about nine parts of a model business plan:
Make a list of the other companies or services youâ€™ll need to run your business. Think about your suppliers, manufacturers, subcontractors, and other strategic partners who are similar to these.
Write down the ways your business will have an edge over the competition. Things like selling directly to consumers or using technology to join the sharing economy should be brought up.
Write down all the resources youâ€™ll use to help your customer. Your most important assets could be your employees, your money, or your ideas. Donâ€™t forget to use business resources that may be available to women, veterans, Native Americans, and HUBZone businesses.
Make a clear and convincing statement about what your company does that no one else does.
Explain how your customers will work with your business. Is it a machine or a person? Online or in person? Think about the whole customer experience, from the beginning to the end.
Be specific when you talk about who you want to reach. Your business wonâ€™t be right for everyone, so itâ€™s important to know exactly who itâ€™s for.
Write down the most important ways you will communicate with your customers. Most businesses use a variety of channels and improve how well they work over time.
Will your company try to cut costs or increase value? Define your strategy, and then make a list of the biggest costs youâ€™ll have to pay to follow it.
Tell us how your business will make money. Direct sales, membership fees, and selling advertising space are all examples. If your business has more than one way to make money, write them all down.
When you write your business plans, donâ€™t think about whatâ€™s best for you. Instead, think about what your key stakeholders want. You will save a lot of time and effort and have a better chance of getting investors and customers this way.Â
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