Are you at a time when your business could use a little financial boost? Are you considering looking for funding? In that case, the possibility of carrying out a business plan may be your best move forward, especially if you have investors in mind.
So what is a business plan? The most widely accepted understanding is a formal statement of business objectives, ideas or initiatives that are constructed as a projection and evaluation of a company’s needs. However, it’s not just a tool for funding, it is also a document that helps align your policies and gives you a clearer understanding for the future.
The plan should include information on business strategy, the number of sales estimated for the coming years, the product roadmap but above all and perhaps most importantly, identify how, when and where you will be making those sales.
What content structure must your plan adhere to? We can summarize in six core points.
1. Executive Summary
This is the most important element as it sets the tone for the rest of the brief. To put it plainly, if you fail to “hook-in” the reader here, you have little hope of retaining their attention through the remainder of the document, so make sure to get it right.
The executive summary should establish what the product or service is and the advantage it sways over any competitors. You must explain its niche concept and how this helps drive the business to succeed.
2. Product or Service
Once the executive summary is taken care of, we enter an informative phase where we will start by clearly highlighting the reasons for the project, the business opportunity and how our product helps fill the void. We should make it clear what our idea is and why it stands out. If it’s something new, why will customers be interested in it? There will surely be obstacles, as there are with any business plan, so it’s advisable to include, above all, its affordability and how you plan to make it a lasting success.
Now we’re getting into the more complex issues. This is where we need to identify and detail what our market (how it’s evolving) and who are our main competitors. Identifying the market should include whether it is local, regional, national or international.
Today you must think about a global market, but to be global, first you have to have a good, clear strategy and above all be very confident that the product will function in all areas where we plan on targeting. We should also speak about our existing competitors in the market and how they’re likely to react, while summarizing how customer needs will be covered and why this gap in the market has opened.
It’s always advisable to research the market well, where we are, with solvent data sources to give more credibility when defending the project.
4. Sales Channel
Right, now we have our product, how do we plan on selling it? We need to explain how it will break into the market that we have defined above, which channel we’re using, and how the product or service will place in the market in terms of price, quality or customer service.
It’s advisable to consider questions such as: For what and how much will I sell? How do I take my product to the end customer (if your market is B2C) will it be via web, shop, sales force…? Which marketing levers will I use? How can I deal with my competition? How much will it cost, and what’s the likely return?
5. Equipment and Operations
Now we’ve outlined how we plan on selling, it’s time to show that we have the means and experience to back it up. This is where you’ll play your credibility card and that of your business, because you have the past results to prove that this is not just a romantic fling – you’ve been in this situation before and you have the tools to get the job done.
6. Economic Projections
We’ve reached the last part of the business plan and this is where we should provide our sales projections. It’s important to factor in your products seasonality to account for fluctuating rises and falls in profit margins e.g. you’re likely to sell more ice cream in the summer, than winter. Don’t miss any details, either. You want this plan to be water-tight, so you can show investors that you’ve covered all angles and are serious about this proposal.
In any solid business plan, you can always change the order points and it will still makes sense. However, don’t forget that developing the plan is just the first step, it’s now time to go out there and make it work!