Let’s start from the very beginning.
What is a Business Plan? What should it include and what does it aim to achieve?
Stated simply, a Business Plan is a written document which is based on an entrepreneur’s vision. It describes how they see their future functioning and profits. The profit factor here is key because a business without a profit is a business without a future. Something that does not last cannot possibly be a good investment.
There are three major components in any business plan. It includes a corporate plan, thorough market research and a solid financial forecast.
- Corporate plan.
A Corporate Plan will draw out the structure of your business. Starting from managers and going all the way through the employee structure. The salary rate is a significant part of your business expenses and should be assessed well in advance.
- Your Product.
Your business plan describes the products/services that will be provided. Target Audience, Market Share and other considerations will affect your business’ feasibility. In simpler terms – why do people want to buy it. If it’s needed, then it will sell.
- Market Research.
Thorough market research expands on the previous point and lays the foundation for your business to succeed in the targeted market. The description of the product has to go hand in hand with the description of it’s audience.
Summary. The good old numbers should come together. The financial forecast should explain the numerical basis behind having this business in operation in the first place. And if it works, you will get the funds. Numbers speak pretty much for themselves. In simple words, if this business can be expected to generate a substantial profit then the owners of the business have a good reason to operate this business in a long run.
Let’s answer some questions now.
Q: When you get this document, what does it really do for you?
A: A business plan that has been written for a startup makes sure that the risks for your project are reduced to the very minimum. When you write things down, you can make sure that you consider the smallest details. This way you rule out any unpleasant surprises when you are actually in operation. Any business is an element of a risk. It might turn out to be unsuccessful. Work on it in advance.
Writing a good business plan will not only get you the funding you need. It will minimize the shortfalls in your budget, startup inventory you actually require, and put you ahead of your competitors.
When you do the market research, you can assess the size of the market that you are trying to reach. You can see whether or not that size of the market is sufficient for you to make enough sales in order to run a successful operation. A good business plan gets you the funding you need to go into actual business. It is also very useful to use as a guideline on your way to success. It works for you on all stages of your business.
In the next article we will go into more detail about what it takes to get a good business plan together and explain the different strategies that are needed for different business structures.