Starting a business is not for the faint of heart, and without a clear direction, you will soon lose sight of your goals and veer off into the unknown, inevitably shutting doors for good.
Having a well-thought business plan from the get-go will help you stay in course. It will ensure you stay motivated and push through as it will give you something to compare your performance by.
Having a clear vision of why you started your business in the first place and what goals you wanted to achieve will give you a much higher probability of reaching success.
Furthermore, if you are looking to get a start-up business loan without a business plan, you don’t stand a chance, so it becomes imperative that you spend some time creating one.
Without further ado, let’s have a look at how you can get started in writing your all-important business plan.
Essential Elements in writing your business plan
– Executive summary
– Business description
– Marketing Plan
– Financial Plan
– Best Practices
Executive summary of a business plan
This is the part where the lender will first look at and decide whether to carry on looking at the rest of the business plan or to reject it.
Therefore, it is pivotal for the success of your business that you put the most amount of time thinking through this properly.
Even though this will be ready first by your lender, it will be done last by yourself. This is because this section will hold key information of all aspects of your business plan, and so it makes sense to write it after all of your business plans is complete.
The things you would need in your executive business plan would be:
– An introduction to your business, outlining your vision and goals.
– The market that you intend to Peirce.
– Your unique selling point.
If you have any, your background of yourself and your partners outlining your qualifications and how you are suitable to run this business.
– Outlining why you require the funding and how you intend to spend it.
You would need the following for this section:
What is the purpose of your business, what does it intend to achieve?
Where do you see your business in the next five years, how do you intend to reach there?
What are your short and long-term goals? What actions will you be taking to achieve these, and what key performance indicators will you use to achieve these goals.
An overview of what target market you have chosen and why you have set yourself to target this specific market.
What industry will you be functioning in, and the current state of this industry? Is it in growth or decline? What gaps have you identified, and how do you intend to explore them? Is the competition fierce? How do you intend to beat them?
Deciding what kind of business structure you will choose for yourself, and the reasons why. The most common are Ltd company, Self-employed or Partnership.
Products and services
In this section, you will explain what kind of products or services you will be offering. What problems will they solve, are there any propriety features at present such as a patent, license, etc., and what pricing strategy have you chosen, cost differentiator or upmarket through quality.
Here you will outline how you intend to reach your target market and the expected return on marketing activities. Your marketing plan will consist of a few elements they are as follows:
This consists of you collating information that is available online and through journals and articles.
With this information, you will understand the size of the industry, the key players in your target market, customer trends, and what areas you can focus on to get customers to sign up with you.
Understanding your strengths, weaknesses, opportunities, and threats will help you overcome barriers and plan out solutions for the challenges you will face in your industry.
To understand your target market, you must be able to have a vision of your best client. You would need to know their likes, dislikes, age, gender, where they hang out, etc.
Once you understand your SWOT and your perfect client, you need to make sure you have enough unique selling points to entice these customers.
This will be a hybrid between your online and offline marketing. The different mediums you will use will have to be listed down, along with the expected returns.
The section on operations will help create an idea for the reader of how you intend to run your business on a day-to-day basis. There are a few elements involved:
Production and Quality Control
What methods will you use to make sure your products or services are delivered as intended. This could be by outlining the type of software or equipment you’ll be using. You will also have to outline what sort of steps you will be taking to ensure quality.
Will you be working from home, or do you require a high street presence. Whatever you decide, make sure your decision is backed up by solid evidence in what works best works for the type of industry you are in.
Do you need to have a license to run your business, and how do you intend to get it? What other legal requirements would you need to fulfil? These could be a range of things; copyrights, regulations, permits, etc.
Will you need staff? How many would you need, and how will you hire them? What calibre of staff will you hire? Would they be on full-time employment, or will they be freelancers? Would they need training?
In this section, you will outline your daily expenses, revenue, and profits. It would be ideal to have a five-year projection to understand the viability of the business.
You discuss in your financial plan:
- Projection of your profit and loss statement in the first 12 months and, if possible, for the next five years.
- Balance sheet statement outlining your assets, liabilities, and equity 12 months after your business has been trading.
- Cash flow statement for the next 12 months.
Best practices to make your business plan successful
There are many types of business plans. However, there are a few elements in common amongst the business plans that perform well. They are as following:
Bars and Graphs
Having user-friendly bars and graphs helps complicated messages pass on easily, where everyone can comprehend information well.
Today we are saturated with information. However, it becomes quite a task to find information that could be relevant, accurate, and trustworthy.
Making sure you pick the right resources for your research is crucial, as any misleading information can backfire and potentially cause your business plan to be rejected.
To the point information
Be as precise as possible. Lenders are not testing your writing skills; they are there to make quick judgments by the facts and numbers you provide them. Therefore, the shorter and to the point information you provide them, the quicker they will be able to decide.
Where detailed information is required, this can be added by the use of appendices.
Every successful business you can think of all starts with a business plan. You can research this yourself by picking any successful business today. They didn’t all of a sudden come into existence. They planned well before they ever came into the spotlight, and long after that, they hired staff, pitched to investors, and got some sort of mainstream popularity.
Do not get discouraged in creating a business plan. Even though it’s long hours and a lot of hard work, it can potentially save you years and a whole lot of money. Most of the time, after writing a business plan, you will conclude that the business is not feasible at all. This on its own will save you the hassle of starting it all together. Check out our article about why it is important and 100% worth your while to write a detailed business plan.
While writing your business plan, make sure to get help from trusted advisors, mentors, read books, listen to podcasts, and research as much as you can. After all, you will be spending most of your waking life trying to build this business.
Don’t hold yourself back in achieving your dreams. Instead, go all out on paper and later refine it to make it achievable. Do check out our detailed guide on how to write a strategic business plan in our Knowledgebase section.
We at EvoTax help you every step of the way. We will help you write bespoke business plans and help you throughout your business journey with your accounting, tax, planning, and growth strategies. Get in touch today for a free consultation where we can discuss how EvoTax can best help you kick off your new business journey!
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