When starting up a business, it is imperative that a business plan is composed. Just like when writing a list before going shopping, a business plan will enable you to know what your plans and objectives should be. Starting a business of any kind is a very serious decision, especially if you will be a Sole Trader because your assets are considered when paying off debt. Although the responsibility of a limited company does not take into consideration assets if you do generate any level of debt, running a successful business is a very rewarding feeling and this can be achieved because of an effective business plan.
Who will read a business plan?
Not only can a business plan be referred to by yourself in order to monitor whether your objectives are being met but also other individuals can read it as well such as your bank, business partner and shareholders. People and other companies who may invest heavily in your company will want to read your business plan before making any cash injection. A business plan is a document which is not only useful for those who are associated with a company but it can help you to make certain decisions because you may be unsure about whether it contradicts what your original intentions were.
What should be on a business plan?
A standard business plan has many different points and sections. Although it is not necessary, it is recommended that the following is included:
What your business offers to customers and investors
This covers the products or services which you wish to provide to customers and what your intended audience is.
An executive strategy
Detailing the type of business which you want to run, this is normally the first information which can be seen on your business plan. An executive strategy enables lenders and banks to know what your business stands for. If you want to make a loan application, your bank will always ask to see your executive strategy because it gives an overview of what your intentions are.
Marketing and sales strategy
This section is used to attract potential customers. If the strategy which is detailed on your business plan seems appealing and thought-out, it demonstrates what your business can offer investors. It doesn’t matter whether you are selling high-end and low value products or a variety of services because investors will want to know what your strategies are.
Details about your management team and personnel
Every single credential which you have should be included on a business plan. The people who are currently and will soon be working alongside you must feature as well. If you have certain achievements, such as winning awards or accolades, they should also be included.
Information about your production facilities and management information systems can feature on a business plan. If you have state-of-the-art equipment, details about IT systems should be included.
Forecasts about your financial situation
Your hopes about potential revenue should feature in a business plan and must take into consideration the information which is in other sections.
How should a business plan be presented?
As with a CV and a portfolio of work, a business plan should not be lengthy. Only vital information must be in a business plan and it should be professionally worded as well. It doesn’t matter if a business plan will never be shown to investors and only to family and friends – a positive business plan should be created and not one which badly portrays your business. Unnecessary jargon shouldn’t be used either because this will distract the reader’s attention from vital information which they should be focusing on.
A business plan should be put into an A4 folder. If it is printed using a smaller paper size, the information that’s on a business plan will be difficult to read. A3, A2 and A1 paper shouldn’t be used either because the text that’s on a business plan will be too big. Most importantly, the information which is on a business plan should be current and not out-of-date. Therefore, you won’t be embarrassed when an important fact is missing from your business plan.
Spend many hours writing a business plan
Having an effective business plan is just as important as a website which has a good Search Ranking. Although it can take a while to write a business plan, it can help you to maintain your goals and objectives. As running a business can be stressful, a business plan will help you to focus on what will make you successful and you will also be aware of your financial goals as well. As your business starts to grow, a business plan can be effectively used to attract other investors. By devoting as much time as possible to composing a business plan will reap many dividends.