Your plan is the foundation of your business. It is what investors and financial institutions will look into to determine the potential benefits or risks of trusting on your vision. It is what gives your initial business idea its flesh and bones to turn it into a reality.
That’s why we completely understand why new owners are daunted by the prospect of making one. Don’t worry. In this article, we are going to share with you how to draft the perfect plan when starting a business.
It All Starts with an Idea
The first thing that you need to do is to flesh out the idea. What is your planned initial capital? What kind of products or services are you thinking of offering? What are your business’ mission and vision? Who is your target demographic? These details will not only serve as a reference when constructing your business plan, but it will also help you make practical business decisions later on such as which payday loans online would better cover my capital? Or who among my network are the ideal investors?
The Two Types of Business Plans
Now that you have a general idea of where your business is headed, you can move on to select the business plan format that will better suit your needs. There are two: the traditional plan and the lean plan.
The traditional business plan follows a standard structure that divides it into different areas. You are then encouraged to detail each section. It is important to note that financial institutions and grant organizations will most likely request this type of business plan from you.
On the other hand, the lean plan still follows a standard structure but the different areas will now be more concise rather than comprehensive. Some investors may ask for one before they even consider setting an appointment with you. Hence, make sure that your lean plan highlights the key points that you want them to focus on.
The Different Areas of a Business Plan
Here are the essential parts to include in your business plan, regardless if it’s a traditional or a lean plan:
- Executive Summary. This part seeks to introduce your business. What is it all about? What are your objectives? How (and why) are you going to succeed? What sets you apart? Be direct and concise. You want to grab the reader’s attention for him to keep on reading.
- Company Description. This is where all of the details that won’t fit into the executive summary will go. Who is your target demographic? What kinds of problems will your business solve? Do you have any competitive advantages? This is the perfect time to highlight all of your strengths.
- Market Analysis. This will give your reader the landscape of your industry. Who are your competitors? How are they doing? Are you creating a new niche? How do you think will it work?
- Organization, Management, and Structure. This part seeks to give the reader an idea of the landscape within your company. What is the legal structure of your business? Who are the people running it? Show the employees’ organizational structure. You can even include the CVs of the key people in your team.
- Products and Services. Now it’s time to highlight what you have to offer. How will they benefit your target demographic? How are they priced? Are they copyrighted? Is there ongoing product research and development?
- Marketing Strategy. This part will go into detail about how you are planning to market your product. What marketing strategies are you planning to do? Is there an existing marketing campaign already?
- Financial Projections. Finally, don’t forget about the numbers. This part will show your projected financial outlook for the next five years and how you plan on writing the financial story of your business.
READ MORE: Coffee Shop Business Plan: How to Make it?