Have you ever wondered what it takes to start a business that not only survives but also grows? If you have, then you might already be aware that almost half of the businesses that start-up, fail within the first four years. Given this statistic, it is extremely important to understand that the initial trading years after starting up a business are the most crucial to a business’s survival and growth. For that, the base of your business must be strong, for which the first step towards a successful startup is a properly designed business plan.
Planning is the key to achieve your goals, professional and personal. That is why you will find that every business starts with a business plan. A business plan is a document that outlines your business’s details as a blueprint does for a building, but not everyone is aware of how a business plan is designed.
Read on to understand the structure of a business plan so you can start designing one now for your startup!
1- Cover Page:
People may not judge books by their covers, but businesses are often judged by the cover pages of their business plans. Who is the judge of your business plan is another discussion – but to give you an idea, let’s assume that you go to a local bank to get a loan for your startup? One of the main documents that will determine whether the bank gives you the loan or not, is the business plan. The cover page does not have too much information, just your business’s name, your name, and your contact details.
2- Table of Contents
Being organized is just as important as being informed and detailed in your business plan. Hence, make a table of contents to list out all your headings that follow in the plan to minimize time wastage and maximize efficiency.
3- Executive Summary
Consider this part of the plot of your story. Precisely on one page, explain the main elements of your business including your organization’s mission statement, a brief record of the market you will be operating in, your competitors and your USP, any forecasted financial signs of progress, and the capital required to start-up and maintain your business.
4- Business Description
Defining your business’s nature and overall idea is important along with an evaluation of why investing in your business may be a good idea for anyone interested. This includes everything from your business name to every product and service you plan to offer, and what market you wish to target.
5- Industry Details
If you are planning to start a restaurant, you will need to research thoroughly and analyze the industry in terms of its size, capacity, opportunities, limitations, influencers, competitors, and market.
6- Competitive Analysis
Competitions are one of the many reasons why businesses fail or struggle to survive during their early years. Hence, analyzing what makes the competitors stay in the market, their strategies, and how you can be different from them, can really help a business get started on the right foot.
7- Market Analysis
The most important part of all the different analysis in a business plan is to understand your market. Your market is the people who are your potential customers like women are the main target market for cosmetics. Research the market, evaluate the behavior, and maybe even segment the market into groups to identify which segment has the most opportunities for you.
8- Management Summary
This is where you and your partners/team members can boast about your skills and expertise. List what each team member is responsible for, their position, and what makes them eligible for their position in the business.
9- Operational Plan
In this section of the business plan, you should use visual/graphical elements and other tools to detail your day-to-day business operations and important information including calculations like breakeven points, etc.
10- Marketing Plan
The marketing plan is a very detailed and necessary part of a business plan. To sum up, it features how you will be selling your product/service to the right market. Usually, a good marketing plan would give details on the marketing mix decisions i.e. Price, Product, Promotion, Place.
11- Financial Plan
It is in fact very difficult to create a compelling and effective financial plan for your business but is just as important. This is the part of the business plan that is of the most interest to investors and banks, as it details all current and future costs and earnings of the business, both assumed and confirmed.
12- Documents Attached
Like you bring your dental veneers to support your teeth, any supporting documents or additional information must be included with the business plan to serve as evidence or reference to any information included in the business plan, or any information that may be of interest to the stakeholders.
A business plan outlines how the business is to be built. It is the first step towards a successful business, and if you do not pay enough attention and efforts to build it, you probably will run into a lot of potential problems leading to mismanagement and failures.