Posted on December 16, 2013 by Michael Martin Leaño
In addition to putting in all the particulars of how your business works on paper, having a good business plan also improves the likelihood of lenders and financiers investing in or lending your start-up money. Some maverick capitalists may prefer only an executive summary, but financial institutions would still favour a comprehensive one that details everything about your business to minimise their risk. Here’s a rundown of what you need to make a successful business plan.
- Executive summary
The executive summary is an outline of your business, which sums up all its key points. It’s the first thing readers see on a business plan, but executive summaries are usually prepared last. Your executive summary should let prospective investors quickly decide if it’s worthwhile to go over the entire plan, so you should make an effort to keep your reader engaged. Do this and they’ll keep reading. - Company profile
This section normally includes the main purpose and history of the company. It should also include details like contact information, location and current status. Try not to make this section too long to maintain your audience’s interest. - Company mission and vision
Here is where you put why you’re doing what you’re doing, what you plan on doing, and how you intend to accomplish those plans. The company mission and vision are what gives your enterprise direction. - Investment rationale
This is a very important section because it tells the financier or lender how much you need and what you are going to do with the funds. - Market analysis
This section should cover the size of your market, your position in the market, target market, market share, information on your company’s products/services, and your competitors. - Marketing plan
The marketing plan describes your company’s approach in attracting customers. You need to talk about details like how you plan to advertise, what differentiates your product/service from competitors, expected demand for your product/service, guidelines to pricing, your product/service’s value to the customer, potential for growth, how you intend to improve customer loyalty, and how much you expect to sell. Your marketing plan needs to prove that you know how to make money for your company. - Organisation structure
Here is where you outline your company’s structure. A simple organisation chart with a brief description of each position will usually do; but for best results, include details on what form your business will take (e.g. sole proprietorship, corporation, limited liability company, or partnership). - Management and labour plan
Details on human resources guidelines, employment and termination, skills training–everything you have on labour belongs in this section. Include your management team’s (if any) expertise and what makes them distinctively capable in making your business successful. - Operating plan
This should go over how your organisation makes its products or provides its services. A flow chart illustrating your operations would be helpful. Include any details on equipment and materials used, technologies needed and environmental concerns, if any. - Risk management
As with any well-designed business plan, you need to identify and evaluate potential risks that your company may face and how you’re going to address them, including legal and economic risks, and business continuity plans in case of disasters. - Financial plan
All money details are discussed here, such as your company’s funding structure, a list of start-up expenses, cash flow estimates, return on investment, and financial forecasts for the next three to five years. Make sure your forecasts are realistic to make your business plan more credible overall. - Action plan
This generally refers to what your company needs to do to reach its goals. This can include the resources needed to do so, and details on the personnel responsible for certain schedules. If your company needs to complete certain projects before it can make money, include them here and how they are going to be accomplished.
