When you’re establishing or restructuring a firm, figuring out how you want to proceed and establishing a clear route to success can be difficult. It can be even more difficult to persuade potential investors of the importance of what you foresee, especially if you don’t have a precise plan in place for how you’ll achieve your objectives. Knowing how to construct a business strategy comes in handy here.
Everyone who came before you felt confident in the success of their firm, yet only half of small enterprises survive the first five years. Even more alarming, 17 percent of firms fail as a result of a lack of strategy.
Business plans should be prioritized because they lay out the measures you’ll need to take to achieve your unique objectives and ensure nothing is overlooked. They can also be utilized to demonstrate to potential investors that you’re serious and have a solid plan and business model, enhancing your chances of acquiring funding.
What Exactly Must be Included in a Business Plan?
To assist you in answering this question, we’ve detailed the major components of a business plan, and we’ve explained the purpose of each area of the business plan outline below, as well as what each should include.
Business Plan Outline
- The executive summary
- The company description
- Market analysis
- Organization and management
- Service or product line
- Marketing and sales
- Funding request
- Financial projections
- The appendix
1. The Executive Summary
The executive summary is a quick rundown of your company and its goals. It should be no longer than two pages and utilized to catch the attention of potential partners, investors, and vendors. This should explain why you will succeed.
Executive summaries must include the following:
- A mission statement, which is a line or two that explains what your company’s purpose is and what problems you can solve.
- Information about your product or service, including any features that set it apart from the competition.
- Basic information on the members of your company’s leadership team, including their titles and responsibilities.
- Information about the location of your team
- Basic financial details (including present funding or what you’re seeking funds for) and high-level growth plans (if you’re seeking financing)
2. The Company Description
This part will go into great detail about your company, including the problems you want to tackle and the communities you aim to reach. Make a list of the audience segments, consumers, organisations, or corporations that you want to be your clients.
You should also emphasise what differentiators or competitive advantages will help your company succeed. Simply said, this is the spot where you can promote your abilities.
The following should be included:
- Every single one of your company’s unique selling propositions (USPs) should be linked to your mission statement.
- An explanation of every competitive advantage you have as a company and as the owner of a company.
- An distinct highlight for each of your team’s experts
- If applicable, information on the company’s patents or copyrights.
3. Market Analysis
The market research will tell readers how you’ll fit into the existing market, as well as how you’ll stand out (more importantly).
Because this section will require extensive research, it could be one of the most time-consuming sections of the business plan to complete. You’ll need to conduct competitive research to learn about what other companies are up to and their strengths and limitations. You can look for patterns among your competitors to understand what makes them successful, what works, and what you may improve on.
This is where you can describe how your business can fill a need in the market. Is the quality of your goods exceptional? Are you able to provide extra features that your competitors’ products or services lack? Are you catering to a market that is otherwise underserved?
Here are some things you should cover in your market analysis section:
An study of what is currently available in the market, including, if possible, examples of direct rivals and the services they provide.
An description of how you can fit into the market while still rising above it, complete with thorough information on the techniques, features, and assets you’ll employ to differentiate yourself.
An explanation of why this is so important.
4. Organization and Management
The organisation and management section will describe how your business will be run and who will be in charge of it.
The following items should be included:
- The legal structure of your firm, which could be a S or C corporation, a general or limited partnership, an LLC, or a sole proprietorship. Explain who the various owners are.
- An organisational chart that shows your company’s management and leadership structure.
- Highlight any present executives and upper-level team members, as well as facts about them that demonstrates how they will contribute to the success of your fledgling company. It would be beneficial to include the CVs of important members of your team.
5. Service or Product Line
Your company will sell goods, services, or both. This is where you’ll go over the specifics of what you’re going to sell.
The following information should be included in this section:
- An explanation of how your customer will benefit from your product or service
- The product lifespan refers to how long a product can be sold after it is initially launched to the market.
- Patent filings and copyright protection are examples of intellectual property plans.
- Product testing or research that you’ve done for your product or service
6. Marketing and Sales
If a company wants to connect with new customers and produce revenue, it needs a sophisticated marketing strategy. Your plans will be detailed in this section of your company strategy.
You’ll need to include the following:
- You have specific plans in place to attract, acquire, and keep customers. This will contain the many channels you want to employ, both online and offline, as well as all stages of the digital sales funnel.
- An overview of the sales process, including if online checkout will be offered, how lead collection works, and any client onboarding procedures look like
- Data on how much you want to spend on marketing initiatives and on which channels you want to do so. Don’t overlook this during the financial predictions section of the business plan; you can always alter it later, but you want to start with a firm foundation today.
7. Funding Request
Not many business plans ask for money, but if yours does, this is the section where you should explain what you’re looking for in terms of finance and what it will cover.
Explain how much money you’ll need in the next five years and why you’ll need it.
This section would go over the following points:
- Whether you prefer debt or equity as a form of funding
- The terms on which you’re looking for a loan
- The loan’s, line of credit’s, or investment’s duration.
- An description of how you’ll use the funds and why you’ll need them to start and grow your company.
A plan for how you will pay off your debt in the future.
8. Financial Projections
Your financing requests should be followed with financial predictions right away. This will show you how much money you can expect to make in the first year and over the next five years. You must persuade the reader that your company will be financially secure in the long run, allowing them to return their investment.
Here’s a list of things to include:
- For the previous five years, established enterprises should include financial reports such as income statements, cash flow statements, profit and loss statements, and balance sheets (or whatever is available)
- Mention any collateral you might be able to use to secure a loan.
- Include details such as profit margins on your product or service line in your explanation of how you plan to make money.
- Provide a financial forecast for how much you expect your business to grow over the next five years.
9. The Appendix
If there’s anything additional you’d like the reader to know or see, the appendix is the place to do it. If you’re already up and running, this may include client testimonials, photographs of items or product prototypes, or resumes of any important players.
Your appendix should always include the following:
- Any patents or copyrights copies
- Testimonials or personal recommendations
- Product research that wasn’t included in the business strategy earlier
- Any high-level members’ resumes or CVs
- Additional information about the manufacturing or producing process
- Any permits or licences that are required
