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Preparing your business plan
A business plan is essential for business owners; it is often called the roadmap for your business. A business plan provides details about the description of your business, your products or services, your customers, and how you plan to make money. You need to develop some marketing strategies and provide information on how you plan to control your finances and manage your small business.
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What is a business plan important?
Besides being a roadmap for your business, a business plan will help you in other areas including the following:
- Obtaining financing
- Debt to equity ratio
- Business objectives
- Marketing and business strategies
A business plan is one of your greatest tools to have available to help you become successful.
How do I create a business plan?
Creating a business plan will have a lot to do with the success your company will have someday. Determine what your reasons are for using a business plan. Are you going to use it as a road map? Do you need the business plan to obtain financing? Let's discuss some of the different aspects of a business plan:
1. Introduction
a. The introduction will cover all the basic information of your business. You need to identify what your business structure is along with the contact information for the business. Generally the introduction will include a cover, title page, summary, and table of contents. The summary talks about some of the key points of the business plan like the purpose of the plan, if you are already operating your business, and the objectives of your business.
2. Company Section
a. The company section will discuss the mission statement of the business. Discuss your reasons for starting a business and the purpose of your business. Normally the mission statement will provide information on who you are, what you do, why you do it, and what you stand for. Try to keep the mission statement short and simple. Once you have a mission statement, create a business overview. This provides information on your business start date, legal structure, and business name. You also need to include a description of the different products and services you plan to sell. Include information about your customers and why they will select your product over your competitors. Also include information about zoning, licenses, insurance, and other issues that pertain to establishing a business.
3. Marketing
a. The marketing section of your business plan is vital to the growth of your business. Talk about some of your employees along with your marketing ideas. Include a company analysis that talks about where you are at now and where you expect to be in 5 years, 10 years, etc. You also need to provide information on what you will do if you do not meet those goals. Provide a market analysis that provides information about your market size, market segmentation, and the marketing environment.
b. Marketing also includes a customer analysis. Talk about your customers and their purchasing decisions, including when they look for products, what products they typically buy, and why they choose your products over your competitors.
c. Lastly you need to talk about your marketing budget and your action plan. Some of the documents you need to include are research surveys, spreadsheets, and market studies.
4. Financial Section
a. The last section of your business plan must provide information about your company's finances. You need to create financial projections and support this with existing financial statements or other documents. Provide information about the funding requirements, use of funds, and the funding sources.
b. Provide a balance sheet that lists all your company assets and liabilities. Then you need to list a break-even analysis, cash flow projections, income potential, and a list of your equipment and inventory you carry.
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