Many people aspire to start their businesses, but the truth of the matter is that only a few can succeed in the long run. A survey revealed that 90% of all startups fail; 21.5% give up during their first year and 30% in their second year. Some of the top reasons for failure include inadequate research, ineffective marketing, targeting the wrong market, and lack of industry expertise.
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A well-written business plan acts as a blueprint for the business management strategies to follow and increase productivity. Here are nine essential steps to write a perfect business plan.
Start With An Executive Summary
An executive summary is a brief highlight of the company’s management, objectives, offerings, market, opportunities, growth potential, and financial requirements. Businesses that can serve the customers’ needs and wants profitably are likely to succeed. An executive summary should describe how your business is a solution and make a strong impression.
Outline Business Overview and Objectives
Business overview and objectives cover your visions, goals, and aspirations. Aside from making a profit, good businesses should have a clear mission and vision; otherwise, operations will seem baseless. In this step, your business plan should identify the industry, the customers to be targeted and what problem your business aims to solve.
Mention Product and Services
In this step, list down all products and services your business will offer to its target market. Describe the state of the market with regards to market size and competition and how your product or service differs from the rest. It is advisable for businesses in highly innovative and competitive industries to lay down their future plans of R&D and offerings.
Market Opportunities
Before starting a business, you should conduct thorough research of the industry, customer behavior, and competition to understand your company’s positioning. Analyze your current offerings, propose future offerings and growth potential. To stay in business for years to come, you should be steps ahead of the competition.
Focus on Marketing and Sales
Effective marketing strategies are critical to succeed as even good products and services go under the radar without promotion. Devise your marketing strategies, and set a marketing budget that can help increase revenue without reducing profits. Cover the 4Ps; Product, Price, Promotion, and Placement in detail as well.
Carry Out Competitive Analysis
In this section, list down your direct and indirect competitors with a detailed profile of your direct competitors. Outline how your business differs from them to understand your USP. Conduct a SWOT analysis to assess your current position and growth potential in the market.
Outline Business Operations
Business operations require thoughtful strategizing of manufacturing, storage, shipping, staffing and managing day-to-day tasks. In this step, explain the facilities, equipment and people responsible for direct manufacturing and selling of your goods and services. It’s advisable to include descriptions of other operations like human resources, legal and finances in your business plan.
Define Management Structure
This step helps stakeholders understand the organizational structure of the business. List the position of senior managers, their history, roles and responsibilities. If they haven’t been hired yet, determine the requirements. Other details to include are the number of staff needed for operations, their roles and pay packages.
Conduct Financial Analysis
The financial success of a business is determined by the company’s net worth, revenue, net income and cash flows. Financial analysis helps potential investors understand the funding requirements of the business. In this step, add past financial reports of your business or financial projections if the company isn’t operational yet.
Startup business plan writing is an essential skill for aspiring entrepreneurs to achieve success. It helps you and other stakeholders understand the business before launch. It can also be used to attract partners, investors and suppliers.
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