If you have a business of your own or plan on starting one, you need to have a written business plan. It may sound a little daunting to write a business plan which may be important for your organization’s success. But it is quite simple and you need not have a business or an accounting degree to write an effective business plan.
Let’s start off, shall we?
Components of a Business Plan.
We first have to keep in mind of the components for a business plan. The components are listed below:
a) Executive summary
The executive summary is like a brief introduction of your business and plans. It should be written in a way that it states what you, as a business owner, desire. It should clearly be able to convey what your business is all about, what are your target audience, your financial highlights and what kind of problems your business solves.
Next, comes the overview section. It is like an overview of the most important components of your company or business. While, writing this section, you can imagine that the person who is reading your plan has never heard of your company.
You have to write in a way that you’re introducing your company and you need to put forward your best foot. It should include your company’s history, management team, what is your mission and what is your legal structure.
If you are starting a business or are already a seasoned business owner looking for investors, you must definitely know your market. This is the section where you will write down everything there is to know about your market. Who are your competitors? What is going on in your industry? You have to keep in mind these questions and fill out this section.
d) Management team summary
One additional factor investors look for along with great ideas is a good team. Here, you will give a brief summary of those who comprise of your team and the criteria you set for hiring new people.
Here, you will define how your company or organization works on a day to day basis. This section will highlight the responsibilities of your management team, the different tasks assigned to the various divisions of your company and the financial and capital expenses related to your business’ operations.
f) Financial plan
Although it places towards the bottom of your plan, it doesn’t mean that it is any less important than the other components. This section should have an overview of your business financials and projections for growth. Consider it as a representation of your current monetary situation as a snapshot of the status of your business.
It helps you, as a business owner, set realistic expectations regarding the success of your business.
Real Concept of a Business Plan
One of the first things you must keep in mind is the fact that a business plan should first convince YOU of its objectivity and reasoning. Then the part of its convincing investors shall come.
You must be convinced by your own plan so that the resources, time and money that you will be putting will not be in vain. So, a solid business plan should flesh out strategic plans, develop marketing and sales plans, create the foundation for smooth operations, and maybe–just maybe–persuade a lender or investor to jump on board.
For many entrepreneurs, developing a business plan is the first step in the process of deciding whether to actually start a business. Determining if an idea is completely illogical on paper can help a prospective founder avoid wasting time and money on a business with no realistic hope of success.
In addition to the above stated components, a good business plan should be convincing. It provides concrete, factual evidence showing your idea for a business is in fact sound and reasonable and has every chance of success.
Three Factors to Make Your Business Planning Easier
The following three rules will help you in writing business plan with a little more ease.
a) Keep it short
Keeping a business plan short and concise is important. This is because, first of all, nobody will be willing to read 100-200 page of business planning, lest of all any business investors you plan on attracting.
Secondly, a business plan must be something you use to run and grow your business. As such, it is something you use and revise over time. Therefore, having a long business plan will just prove to be a great hassle to revise.
When you write a business plan, you must write it in a language that is simple and easy to understand. Your investors may not be familiar with potentially different terms and therefore, you may not be able to convey your products properly to them.
Keep your explanations simple and direct, so that the investors and everyone else will be able to understand.
c) Do not be intimidated
Writing a business plan may seem a big of a deal, but remember that you need not be an expert in any field. Vast majority of business owners do not have MBA’s or any accounting degrees. They learn as they go and you too will learn as you go. You can always start off with a simple one-page business plan. You can then make it more detailed and complex as you go.
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