Writing a new business plan for your start-up or small business is a rite of passage that all would-be entrepreneurs and business owners must go through. That’s because most businesses these days will need to raise some kind of funding, or ask for a little bit of financial support from a bank or other financial institution. One of the requirements of applying for funding is submitting a detailed and extensive business plan. The reason for this is obvious – if a company is to lend your business money, they will need to see that you have outlined, detailed and planned for every step of the next year or two and projected clearly how it is you believe your business will be profitable. For a new business, the business plan is the engine room of their vision and provides the lender with the nuts and bolts of how that vision will come to pass. With all that in mind, this article will detail how to divide up your business plan into sections and what those sections should include:
Next, you need to add all the details of the history of the company itself. Even if it is only just starting, it is still necessary to outline exactly how long it has been in operation, what legal status it has been designated (such as Sole Trader, Corporation or Limited Company) and how much money has gone into the business up to this point. Additionally, you must provide details of the structures within the company. This will include who is the head of the company, who the employees are and what role they will be taking.
Once you have outlined the essential details of the company itself, your next task is to show you have analyzed the market in which the company will be competing. Every good business plan must contain a market analysis that shows the lender how you are going to break into that market, fill a gap in the market or (hopefully) dominate the market. When writing this section, you need to show that you know your market inside out and that you have performed a full analysis of your rivals in the market and seen a way you can be more effective than them.
Finally, you need to have a section that summarizes the products or services you are going to be selling. This is where you go into detail about your service / product itself and why precisely it is better than your competitors products. It is here that you should go into the price of your product and the marketing strategy that you will be using. Define who you will be marketing your product / service towards and how you will attract them. Go into detail regarding advertising and marketing costs.
Lastly, the most important section for lenders or investors is the section on projected earnings. Don’t fall into the usual trap of exaggerating your potential earnings as this is where most business plans fall down. Be realistic in where your earnings will be at over various stages in the next few years (normally divided into six month intervals) and make sure you include the cost of wages, business premises and other outgoings.
Esther is a freelance blogger and writer who covers everything to do with starting a business and becoming an entrepreneur. She blogs about everything from business plans to supply issues, staff costs to factoring finance resources.
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