Whenever you plan of starting a new business, you need a good business plan. A business plan is written to structure your business concepts and ideas into paper so that it becomes easy for investors or banks to understand and finance your needs. A business plan is the utmost requirement for securing your financial needs. There is a pattern for writing a good business plan which one should follow to get success. The major components of a business plan are as follows:
1) Executive summary- The executive summary is the backbone of the business plan and it should include a brief background of the business concept, company’s objective’s or your plan, ownership structure, management team, service offering, target market(s), competitive advantages, marketing strategy and high-level financial details like expected profit, required funding etc. It helps the bank or finance executives to get an idea of your business.
2) A brief account of how the company began- You should mention in your business plan the history behind the formation of you company and the background of the founders and directors.
3) Business Overview- This section will cover the objectives, mission and vision of the business. The goals of the business should be properly outlined in this section.
4) Products and services-You should list down all your products or service offerings and highlight how it is different from your competitors, its basic features and advantages and in what way it will benefit your customers.
5) Industry overview-This section will include description about which industry you are targeting, its growth and size, competitive analysis, business strategy and key players.
6) Marketing strategy- The right direction to achieve the goals of the business is to adopt the right marketing strategy. You have to define your target market segments properly and highlight the unique selling proposition of your services or products and how you are different from your customers with regards to your services or products. You have to talk about the pricing or promotional strategies which you will adopt such as tradeshows, press-magnet events, social media marketing (e.g. Facebook, Twitter, etc.), networking, and print, media or online advertising. You need to specify in the business plan which selling strategy you will adopt, online, wholesalers, storefront and also describe the target markets buying cycle.
7) The market potential for your service or product-You need to convince your customers and employees for your products and services you are offering and hence you have to find out the market which needs that product or service.
8) Operations plan- This section will include details of execution of the day to day operations of your business, location of your business and how it will benefit your business, HR policies of the company and the production plan if you are offering products.
9) Financial Plan- This is the most important part of the business plan where you need to show the three year projection of the projected financial statements, including income statements, pro-forma balance sheets, and monthly cash flow and annual cash flow statements which will help in forecasting your revenues and expenses.
10) An exit strategy- A business plan becomes perfect only when you write a good exit strategy for the investor. It is important to note that investors generally have a 3 year horizon within which they want to exit.