“If you don’t know where you are going, you’ll end up someplace else.”– Yogi Berra
You have to absolutely clear on your business vision and the structure of finance and requirements. You have to know how to create a business plan and how to put it to writing.
If you don’t know about how to come up with a realistic business idea than we have provided tools for that in this post – How to find a business idea?
Backing up your brilliant idea with a thoroughly researched plan gives you more clarity and writing a plan also means you don’t have to worry about remembering the details of it again and again.
A business plan structure your nature of business, product/service details, employees required for various aspects, Income & Expenses and Profit & Loss.
A business plan maps out how your business is going to run for a particular period of time (financial years ) and how the operations will help you achieve your business vision.
Benefits of a well written plan :
1. It will give your team the sense of progression and keep the vision alive.
2. It will help you figure out what steps are needed to be taken for your business to succeed.
3. It helps your stakeholders, partners and investors see how your business will successfully operate.
How to Create a Business Plan?
If you and your friends are travelling across the country to an unknown location it is better to have a map with the exact routes to reach their in time. Same way you need a workmap for your business structure and we will learn to create that here.
Having a detailed plan is not about driving from point A to point B. It’s also an essential part of starting or growing a business and guiding it towards success.
Benifits of Creating a Business Plan :
- Clarity of Vision: It will give you and your team a greater sense of your business goals and why it’s a good idea.
- Strategy: It will help you figure out what steps need to be taken for your business to succeed.
- Confidence: It helps investors, partners, and other stakeholders see how your business will successfully operate.
First start writing the overview of your business in detail and using your own words, don’t worry this will not be the final product of your plan.
Write your business name, what products or services you offer, who your target audience is, and what is the Success stage of your business.
You should list all your company members list with their designated job roles such as [CEO, Marketer, Designer, Accountant, etc.], where your company is located, what industry you serve, and how your product or service works.
You can add short bios for the important people in your company such as BOD (Board of Directors) Management Team etc. You can also list out what roles still need to be filled.
Whether you creating a new business or running already, you should routine the skills and background of you and your key members.
Do a SWOT Analysis of you and your team to classify your key strengths and weaknesses to ascertain your business position.
Then describe how this expertise and experience will benefit your business.
This is the general details of your business and it’s members so after you’ve listed this, write down analysis of your associated industry and your main competitors.
Industry and Competition
Research your Industry status: is it growing or shrinking? Why do you believe there is an opportunity in this industry? Are there any trends affecting the industry, like evloving audinece tastes or changing technology?
You should also write down your business SOP, and compare it with your competitors.
Now consider your competitors. Who are the major players you will be competing against? What share of the market are you looking to gain?
Describe your target audiences – Age group, type of consumers, who will be your customers etc.
List your target audience’s demographic, psychographic (values, personality, opinions, attitudes, hobbies, etc.), and geographic information.
Also write down the vividity of the target market and why it’s ripe for potential sales.
What Can You Provide?
- Explain how you’ll meet your audience’s needs
- What are your key differentiators?
- What problems can you solve?
- How can you provide the services better than your competition?
- What problem that you can solve that the others can’t?
- What techniques you will utilize to achieve this?
It is also a good idea to write down the required documents such as licenses, regulations, Terms and Conditions, Permissions, etc.
You must list the hurdles and difficulties you might face before and during the period of your business such as lack of qualified staff, physical location problems, Disaster Management, etc.
You should include an organizational chart that shows who cover which duties i.e., Job Roles. Basically you’re making sure that every task and responsibility is accounted for, and that there isn’t any overlap.
Present how the ownership of your business is structured. What is the legal structure of your company? Who owns what percentage of your business?
Write down the important details that you want people to understand about your product or service. What stage is it at? Does it use special technology? Is the design worth mentioning?
Note : Make note of any research and development you’ve done (or plan to do) that will bring your product or service to life. Don’t forget to also mention any patents that you hold or that you’re still waiting for.
Sales & Marketing Strategy
Explain how your marketing will introduce you product or service to your audinece, and which marketing channels you’ll use (social media, search and display ads, email marketing, and so on). What’s your strategy for each of these channels?
Describe how will you make your sales. Will you rely on partnerships, distributors, online stores, physical storefronts, and/or salespeople?
Detail the sales steps you’ve already taken and what still needs to happen. For example, have you already started to get sales leads and will soon be creating a way for people to preorder your products?
Now you are ready to figure out the money part of your plan i.e., lay out what funding you need.
State what funding you need now, how long that funding can maintain your business, and what funding you’ll need in the future.
Create a plan to list Startup costs, operational costs, research and design, salaries, hiring, growth, and so forth.
Lastly, include your real and projected financial information. That isn’t just for potential investors, but also for you to get a good grasp of your finances.
Include your projected monthly and yearly sales numbers. If you have multiple products or services, break the numbers down by revenue source.
Write your projected income statements, balance sheets, and capital expenditure budgets. Also supply your monthly or quarterly projections for the first year. If you’re an established business, show the past 5 years of these statements.
List what milestones your business must hit to be financially stable. Do you need a certain amount of sales, for example? Identify when you might take a loss, and when you expect to break even or gain a profit.
Create all the reports in graphs, easy to understand pie charts, bar graphs, and other imagery to present your financial information.
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