Starting a Business does need a lot of plans on the behalf of any business owners. One should have a business regardless of whether you are bootstrapping or looking for outside funding.
The best sorts of business plans usually tell a clear story about what the company wishes to do and how will they do it. Well to be honest, there are higher rate of failure in the first year but an ideal Business Plan is also an great way to test the extent of the business as well as spot flaws and also set aside unrealistic projects.
Remember a business plan does not have to be complicated but it should serve the purpose and provide the much needed success making it clear to whoever is reading the plan.
The concerned tips
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There is certainly no single correct way about how to write a business plan. The approach can depends on the industry along with who is reading the plan and what the plan is intended for. In true sense, a business plan does have a lot of purposes but when it comes to business plan, here are some important purposes which can be served.
There should be specific versions targeted to specific audiences
The most common mistakes of inexperienced business owners are that not understanding who one is writing the plan for. Each and every targeted audience does have different purposes so the versions for each and every audience should surely be different.
Your business plan should be living document
Each and every business plan should be constantly changing as the needs and requirements of the sales in the company. A proper business plan should require frequent review as well as close tracking decided by the management team every month to review the plan versus of what actually happened
Be practical about financial estimates as well as projections
Be aware about the financial estimates as well as projections. Make sure that a proper realistic approach is presented to all your employees and people often tend to excited about the real thing rather than it being a huge thing. Try projecting the better prospects rather than projecting profits. Never be excited about some huge things which are never going to happen.
Write down your business plan and have blueprint
Nothing down the business plan is all about writing down the process as well as having a blueprint. A proper business plan reflects the ideas, intuitions, instincts as well as insights about the business and the future. To be honest, a proper business plan serves the safe way about how to test these before committing to a course of action.
Back up any sort of claims
Follow the projections as well as assertions with the statistics, facts or quotes right from a source which has knowledge to give your plan credibility.
Presentation does count
Reading any long as well as text-heavy document is certainly hard on eyes without the proper format in mind. Try formatting the text pages into two columns as well as break long passages with graphs or charts. Some of the standard industry fonts to be used are Arial, Verdana or Times New Roman.
Writing a proper business plan is certainly not a big work or luxury but it is vital in knowing the process of starting a business with the information one needs to know. So put the right information right into the business plan.
What is there in a proper professional business plan?
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A proper typical business plan is usually of 15 to 25 pages. The length depends on various factors like whether the business is introducing new product or belong to a new industry or is pitching to the bankers who usually expect a traditional written business plan and financials.
Here are the seven sections which a business plan must include
- Executive summary: After the title page, there is the executive summary which explains the fundamentals of the business. It should provide a short and clear synopsis right for the business plan which will describe the business concept as well as the financial features and requirements as well as the company’s current business position and major achievements in the company which are relevant to the success like patents, prototypes or results from test marketing.
- Business description: This section includes the brief descriptions of the industry as well as its outlook. Look into the various markets well within the industry. If you do require funding then reinforce your data with reliable source as well as footnote when possible. Also provide a descriptions of the business operation structure, who to sell, how to distribute the products/services along with the business’s legal structure with the principals and what they bring to the organization
- Market strategies: In this section, you should define the target market as well as plan to them. Proper market analysis requires both research as well as familiarity with the market as well as the target market can be defined and the company be positioned to get market share. Think of the market in terms of size, structure as well as growth prospects, trends and sales potential
- Competitive analysis: The purpose of the competitive analysis is to determine the strategies as well as the weakness of the competitors within the market and the strategies will provide the distinct advantage with the barriers that can be developed to prevent competition right from entering the market and the weaknesses within the product development cycle.
- The design and development plan: This section is only needed if one have a product in development such as an app. The purpose of the section is to give investors descriptions of the design of the product, chart development with context of production and marketing showing a development budget.
- Management and Operations Plan: Here you will get to know the business functions right on daily basis, location, equipment, processes, people and surrounding environment. If there is a product which needs to be manufactured then it needs to explained how and where and also with work facility, the personnel and legal environment, key suppliers and inventory. This section will surely highlight the logistics of the organization like various responsibilities of the management teams as well as the tasks assigned to each division within the company
- Financial factors: At the back of the business plan, there is the financial data which is extremely important. A proper financial data should include the personal financial statement, startup expenses and capital as well as the projected cash flow statement along with the 12 month profit and loss statement.
The best way to prepare for a plan is to keep the entire above necessary element in the business plan executing it in the right way possible.
Different types of business plans
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In general business plans is divided into four categories. These four categories are
- Working plan: As suggested by the name itself, this plan is what the business is all about and what is needed to it to be admired. This version of the plan is an internal document which will be long on detail and short on presentation.
- Mini Plan: In most cases, readers fail to read big versions of the plans and so they may request a mini plan which is a condensed version of a business plan which include atleast some of the components of the longer traditional plan apart from the details and explanation. There is certainly the business concept, marketing plans, financial statements and balance sheet. This shorter plan is meant to be a substitute for a full length plan.
- Presentation plan: The presentation plan will surely be more or less like your written business plan but it should be worded differently for the eyes of the outsider. Always remember that the readers of the presentation plan are someone who is not aware with your business such as investor or venture capitalist. That is the reasons do not keep any shortcut from your working plan which makes sense to you. Moreover there should also be competition threats and risks as well as various financial projections. In addition, look count so use color printer, nice cover and bindings and fancy paper stock.
- The what if plan: This is a contingency plan which happens in case of market share less, heavy price competition or defection of a key member of the team. These include some things to consider when you are getting something outside funding. You should be thinking about what ifs in these cases.
All of these discussions may make to think that this is mountain of work but it is certainly not so if you begin in the right way possible with the set of guidelines to formulate a business plan much required by the company.
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