Starting a business is no joke, it takes a lot of time, effort, research and planning before even actually starting a new business or any startup. In this whole process, outlining a business plan plays a crucial role to achieve the desired success. You need to be patient because it is not necessary that what you plan at the start will work out.
Before planning a business you should do proper market research – its trends, the demand for the product or service that you want to sell, customer preferences and other similar factors. Do not hesitate to take advice from your friends, family, colleagues or any other professional person. It will be great if you take advice from someone in the same industry because they have better knowledge of that particular industry.
With your well-thought-out business plan, you pitch your business to investors, customers and clients. Hence, it is essential to draft a well-structured, clear and concise business plan. Here in this article, we aim to tell you about some essential elements of the business plan that you should keep in mind before outlining your business plan:
- Executive Summary of Your Business
The first component of the business plan is drafting the executive summary. Although it is the first step, don’t forget to check your executive summary once again at the end also. That is quite vital to understand all the aspects of your business better. Executive summaries are basically the introduction of your company. It should include the company background, product or services, growth projection and the mission statement of the company.
The best way to ensure that you include every necessary detail of business in the draft is to follow the ‘5 Ws rule’ (What, Who, Where, Why, When). Keep in mind that this summary should not be too long, one to two pages will be sufficient.
- Business Description
Business Description is important for every business because it elaborates the products and services of the company and helps customers to understand you in a better way. This is the section where you can showcase your business in a detailed manner. It is like an elevated pitch where you can show the world why your business is more beneficial to them. And how your business is unique and better than your competitors.
Describe your manufacturing process, material availability and inventory management. If you are providing services, describe your services to customers and their value proposition. Write a business description in a clear and crisp language so that there is no room for any confusion or doubts.
- Market Analysis and Strategies
What is the point of starting a business when you are not aware of the industry trends, prospects and opportunities? How will you know if your business will give you a profit or not? That’s where the role of market research and analysis comes into play.
Analyse the industry you want to enter- market size, structure, customer preferences, demographics, needs and purchasing trends. This will help you greatly in outlining your further strategy. Once you are done with the research part, explain your market strategy, selling forecast, and how you will function in the particular market.
- Management & Operations
Explain how the company will operate. Introduce your managers and executives, their expertise and how they are going to make the change and achieve the desired goals. Use this section to define how well the business will operate and the various responsibilities of various team members. Don’t forget to also mention how the company will maximise the full potential of team members & experts and benefit from them.
- Marketing and Sales Plan
Without marketing and sales plans, no business will survive in the market. Marketing and sales go hand-in-hand. If somehow you manage to enter the market, it is highly possible that after some time you’ll find yourself struggling to grow. So, it is better to prepare the marketing and sales plan. By this, you will have better clarity about your target audience and on which area you need to focus more in order to expand.
In this division, explain your marketing approach, budget and how you are going to reach your target audience and convince them to buy your product. You also need to describe your sales techniques and conversion plans.
- Distribution Strategy
Distribution strategy plays a prominent part in ensuring the availability of products & services and checking if there are any hurdles in the supply chain. Elaborate on your distribution strategies such as distribution channels (online or offline), the inventory stock and its management.
Distribution is pivotal for any business, so make sure that you choose the right distribution channel and strategy to fulfil the demands of the customers.
- Financial Projections
At the last and final stage, lay out the financial projection of your business. Provide detailed information about the financial health and future of the company. Figure out the costs, required, funding, investment and other financial aspects. Since you already analysed the market by this time, outline your expected gross and net revenue. With market research, you now have a fair idea of customer response and preference and you can roughly predict the estimated earnings and cost of the future.
Make sure that these predictions are realistic and will not hamper the company’s image in future. If you are looking to raise funds for the growth of the company, make sure you provide accurate and reliable information.
We agree with the fact that every business is different in nature but what is similar in all of them to achieve success is to have a good business plan. A business plan helps you to stay focused on your goals and also shows the customer, clients and investors how serious you are for your business. Update your business plan in a timely manner as you move forward toward your goals. Draft your business plan carefully and precisely so that it looks good to clients and investors.
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