A business plan is crucial to anyone who’s starting a business. The business plan will serve as a guide to help entrepreneurs stay on the right track towards their goals and at the same time, to make potential investors and lending institutions see their business as lucrative.
Developing a business plan requires a lot of time, effort, and planning. Here are some of the steps to help you create a business plan for your business.
The executive summary is an outline of your business’ goals and purpose. This part of your business plan includes a brief description of your products and services, a summary of objectives, a justification for viability, a description of the market, growth potential, and an overview of funding requirements.
Keep in mind that this section of your business plan is crucial, therefore, you need to get it right. Your executive summary must clearly describe how your business can provide solutions to a particular problem and make a profile.
Objectives & Overview
As an entrepreneur, for this part, you only need to summarize your current operation, which is easy. Put it into detail including your products and services, how you make them, how you deliver them, how you manage them, etc. For an existing business, this section is longer compared to new businesses. Make sure to emphasize all the important aspects of your products and services that make your business unique. Additionally, make sure to add in the full scope of what you do and what you don’t do.
Your business plan must have a clear explanation of the business environment. Share an analysis of your current and upcoming competitors, how you compare to them, and any regulations that govern your business. You may also highlight your current or anticipated industry changes.
As an entrepreneur, you should be able to include at least three to five years of financial statements. Furthermore, this section of your business plan must also contain the current analysis of profit and loss and cash flow. Throw in at least one year’s worth of pro forma statements and you can move on to the next section. This becomes increasingly important if you business plan requires finance in the forward periods, notes Melbourne Finance Experts director Shaun Hoskin. With lenders being restrictive in lending to businesses, to increase your likelihood of successful funding having well documented financial statements will allow the bank to appropriately understand your risk profile and likelihood to meet your lending obligations.
This section is important to investors because it will tell them how you plan to grow and the work that you plan to do to achieve the growth that you want. Detail here how your business will grow to capture market opportunities and how your business is changing to meet the marker’s new opportunities.
Developing a business plan for an existing business may seem easy at first, but it needs dedicated time and effort to create a business plan that will captivate investors and financial institutions. Not only that, continuously updating your business will let you see the growth of your business and areas for improvement that will allow you to develop better strategies.
So, make sure to do regular updates on your business plans. It’s an effective way to stay on top of things regarding your business.