How to Develop a Business Plan | SkillsAndTech
A business plan is an important factor in successfully creating a business, and is often an essential part of qualifying for funding. Business plans are written documents that describe and analyze your business, and provide detailed information about your short and long-term goals, your strategies for achieving those goals, and your company’s strengths and weaknesses as they relate to your market. A properly developed business plan will improve your chances of finding investors, and is an effective guide that can be used to keep you on track in the future. Read on to learn how to develop a business plan.
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Describe your product or service. This section of your plan should be used to discuss what product or service you are selling, and should detail what benefits your product offers to potential customers. How and where will your product be manufactured? If you are starting a retail business, be certain to include information on the location of your business and on the area demographics. Additionally, you should include information about your competition, and mention any obstacles that may need to be overcome before your product is able to hit the market.
Analyze your market in this section of your business plan. Include information on your customer’s needs, how you intend to reach your customers, how you plan to advertise your product or service, and how much money you intend to spend on your marketing strategy. Documentation should be provided to outline the size and growth potential of your market, and you will need to include a detailed plan showing how you intend to get your product into the hands of consumers.
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Identify your competition, and establish the advantage your business has over them in your target market. This section of your business plan is important to investors, and you should use it to highlight the strengths of your business and the weaknesses of the competition. However, it is crucial to be realistic and honest with both yourself and potential funding sources.
Describe your organization’s structure, management, and operational strategy. This section of your plan should detail your plan for manufacturing, purchasing, staffing, and obtaining the needed equipment and facilities for your business. You should include information on how you intend to establish relationships with vendors, and should highlight the experience of your management team. Investors want to know that your management team understands the market and product, and has the experience necessary to successfully start and operate your business.
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Provide detailed and accurate financial information to be used by potential investors. You are required to provide both historical and prospective financial information, including income statements and cash flow statements for each year your business has been operating (three to five years typically), and you will need to present your expectations for the future and any anticipated income. Any available collateral should also be listed, as it may be a factor when you attempt to qualify for funding.
Create a persuasive executive summary. This should be included at the beginning of your business plan, but should be written last. Your executive summary should include information on the history of your company, an outline of your objectives, a description of your product or service, information on your market and projected growth, an overview of your management team, and a powerful statement about the strengths of your business and why you expect it to succeed. The executive summary is primarily an outline of your business plan, but must be written in a way that encourages investors to continue reading. Limit your executive summary to one or two pages.
