Your business plan is a road map which helps you navigate the unexpected twists and turns faced by any new business.
When your business plan is done well, it provides insights and guidance to help focus energy on truly important tasks. The business plan also is a mirror, used by investors and lenders to better understand the business structure, leadership, product, market, opportunities, and challenges for your business.
For any entrepreneur considering launching a new business venture, the business plan is the right way to organize and frame the key information that will provide insights for all those who want to support and finance the venture. The beauty and benefits of a good business plan are its multiple functions for internal and external audiences.
Creating the Business Plan
When should you begin writing the plan? Contrary to what you might think, it is not when you feel you need funding. While a business plan is important for finding funding, that is certainly not its only purpose. It is an internal tool that compels you to put together a framework and structure for your business idea. It is also an effective tool to use when trying to attract key talent to work for or with your company.
The plan also helps to provide a perspective on your business by identifying the interconnections that exist. For example, imagine your plan calls for launching an extensive social media campaign within six months of launch, but your staffing plan does not call for a marketing team early on. Such contradictions become clear when you are crafting the plan and can lead to real-time adjustments and corrections.
A business plan may vary slightly depending on the type of business you have, but there are some fundamental elements that are found in nearly every plan. Below is a closer look at the core elements of any plan:
- Executive Summary
- Company Description
- Market Analysis
- Organization and Leadership
- Products or Services Provided
- Marketing and Sales Approaches
- Funding Mechanisms
- Financial Projections
The executive summary is usually a one-page synopsis of what your company is about, what needs it fulfills, what the products and services being offered are, and what the business needs … whether it is funding, leadership, or advice. Be sure to focus on need. Your reader must understand your needs. That way, he or she can connect to your desires and read on if there is a belief that your need is worth investment.
This section should begin with an explanation of your industry, including its current state, threats, opportunities, and future outlook. This is a good place to describe the various markets within the industry, with particular attention to new or pending advancements that could affect your business.
You need to know your markets. This section demonstrates your grasp on the complexities and nuances within the market broadly, and your company’s targets within it, as well as how the company is positioned to secure a share of sales.
Organization and Leadership
How will your company operate? What business units are needed and when will they be necessary? How will logistics such as supply chain, manufacturing (if applicable), and distribution be handled? This is also the section where you will introduce other leadership within the organization.
Products or Services Provided
What do you do and what do you provide? This is where specific information about the products and services you provide will be explained. Each product and service need to be detailed. It will also explain what problems or needs your products will solve or fulfill.
Marketing and Sales Approaches
Here is where you demonstrate what channels will be used and how sales will be executed. What will your sales and marketing funnels look like and what will strategies be at each stage to convert potential customers into paying customers?
Funding Mechanisms and Financial Projections
Funding is essential for any small business. When you need funding, your business plan is perhaps the most vital consideration. Funding sources will closely examine how your business will handle cash flow and what revenue projections look like in both the short and long term.
This section needs to provide the following:
- Business outline, including your organizational structure, owners, partnerships, and previous successes
- Current finances, including balance sheets, and income and cash flow statement
- Financial needs, both at present and projected
- Usage, which details how any acquired funds will be spent to grow the business
- Financial planning, including loan repayment schedules, sales plans, and how a potential investor could exit a deal
The business plan should be a powerful and compelling read, which intrigues and excites a reader. You want to convey, objectively, the enthusiasm and passion you have for your business.
At Benetrends, we share that enthusiasm and passion. We work with small business owners to help them secure the business funding they need to turn business plans into business realities. Schedule a consultation to find out how Benetrends can give you the counsel, support, and insights you need to secure funding and propel your business forward.