A business plan is a description of what an enterprise intends to do, the document tells you about the plan, how it will be executed and the gains that will come out of it. It can be as simple as jotting down a business strategy at the back of an envelope or a voluminous document detailing what the business intends to do at a given period.
Business plans are essentially strategic; one starts at a given point with some given abilities and resources to get to a certain point some years to come. At this period, a business will have different abilities and resources as well as having achieved greater productivity, profitability and increased the assets base. The plan will clearly show how you will get to the desired point. More ..
The executive summary
This section gives a summary of the content in the document. All the important details about the plan are distilled in a relatively shorter space. It is a high-level caption at all and normally includes summarized information covering all the sections of the plan. It focuses on the value proposition f the business and gives a general overview. It should be drafted with busy people in mind, those that may not have time to read the whole document but are interested in its content. It should also give those who want to understand the whole idea a chance to do so before they embark on reading the whole document.
This is a caption of the essence of the enterprise’s goals and philosophies. It signals what the enterprise is all about. It communicates to customers, suppliers, employees, community and all other stakeholders. It reflects the facet of the enterprise ranging from its nature of products which are offered, quality, service, growth potential, and adoption of technology and marketplace position. It assists in the clarification of the business which you are in, the goals and objectives as well as the aspirations. It should reflect the business niche, the product or services which are being offered as well as the major elements of the business.
This section allows you to tell the intended users of the business plan you’re your company is all about. The details provided here include: when the business was started, what it does, the mission statement, its core values among other information. Some of the areas that you need to think about when coming up with a company description include business models, unique business relationships that offer the enterprise an advantage, its location, the owners, legal structure, project growth. When responding to these questions, ensure that you provide information that can allow the readers to get a precise picture of the business.
In this section, you will describe the products and services provided by your business. While at it keep in mind that they do not have to be detailed or technical descriptions, you only need to use simple terms, avoid jargon so that you can engage the readers. It is in this section that you will show how the products or services that you offer are different from the competition. Any copyrights, patents or trademarks that you own or may have applied should be listed here. The length of this section will depend on the type of business you are in. For service-oriented business, you may be required to give more details while product-based businesses may not require long descriptions. It also depends on whether the product or service is new, you may be required to explain thoroughly the nature of the product, its value, how it is used among other details. Failing to give adequate details may mean that users of this document may not adequately evaluate your business, therefore making it hard for you to secure funding or whatever assistance you may be seeking.
Some of the key questions that you need to answer when writing a product description include:
- Are the services or product being developed already existing in the market?
- What is the timeline for bringing them into the market?
- What makes them different from the competition?
- How the products to be acquired are, are you the manufacturer, assembler or do you buy from others in the distribution chain?
This is where you outline the marketing strategy, it involves listing the competition as well as giving information about the position you occupy in the market. You also need to include information about the core market that you will be targeting with your product, the profiles of ideal customers as well as other similar market research. The plan also needs to capture the strategies that will be used to reach the target market. The strategies which are being used at the moment need to be included in the plan. Price strategy should also be described in this section, showing the relationship between the price and everything else in the business.
You need to provide information about other business offering similar or alternative products. The users of the document will be interested in knowing whether there are threats to the business before taking any action. You need to show the market share of each of the competition with your position. You should also show the strategies that you have put in place to counter the threats posed by the competitors. If you are rebranding or introducing a new product, you need to show clearly the measures that you have taken to ensure that your market share is not taken by the competitors.
This is an analysis that looks into the external and internal environments of your business. You will focus on Strengths and weakness, opportunities and threats which may affect your business. Strengths should include are areas where your business stands out; these can be a huge asset base, highly skilled employees, huge capital base, strong partnerships among others. Weaknesses can be areas where the business is not doing too well. You should not shy away from giving the weaknesses as they can be overcome through the strategies that might have been put in place. They may include; internal wrangles, de-motivated employees among others. Opportunities are good economic environment, tax incentives among others while threats are poor economic policies, competition among other factors that may affect the business from outside. A SWOT analysis not only shows where your business stands at any given moment but also helps the users of the business plan the measures that may have been put in place to address the issues which have been identified.
This section describes the necessities of the enterprise operation such as physical location, equipment, and facilities. Depending on the type of business, operations may include information about inventory requirement, manufacturing processes description and suppliers data. Operations plan should be thought of like an outline of the capital and expense needs of the business needed for the day to day running of the enterprise. You need to provide the readers of the business plan with information on what you have done so far, show them that you have known what needs to be done as well as demonstrate a clear understanding of the processes for producing your service or product. The operation section may be divided into two parts, namely: stage of development and production process section. Stage of development section starts with an explanation of what has been done up to know to get the business operational. This should be followed by a clear explanation of what needs to be done to keep things running smoothly in this area. The following items are covered: production workflow, industry association memberships, supply chains, quality control. The production process sections lay the details of business operations on a day to day basis. The goal of including this section in the plan is to show a clear understanding of the delivery process for your service or product. Among the details that should be included in this section include a general outline of the business operations such as days and hours of operation, physical plant, equipment, assets, special requirements, materials, production, inventory, feasibility, cost where you give details of cost estimates.
A business plan is never complete if it does not have the numbers to back it up; you need to include the sales forecast, cash flow statement and expense budget among others. The financial section is one of the most essential as it is here that any hope to win investors or obtaining is embedded. Even when financing is not required, this section should be compiled to steer your business successfully. You will need the financial planning section id you are seeking help from the venture capitalist angel investment or even from family members. They want to see the numbers which tell that the business will grow and fast as well as that there is an exit strategy. Any lending institution will also ask to see the numbers to ensure that you will comfortably repay their money. All in all, the most important reason for the preparation of this section is for your benefit, you need to understand how the project will perform. It is an ongoing live document which should guide the running of a business.
Among the areas that are covered in a financial plan are sales forecasts, expense budget, cash flow projections, income projections, a projected balance sheet where assets and liabilities are shown, breakeven analysis showing the breakeven point.
An essential component of the business plan is a timeline; this is the section that shows the milestones and schedules. The timeline list all that is need to get the business operating for a given period. In part, this section includes the research on the direction the business is heading projecting sales. It should also outline the picture of where the business is at the moment. People are mostly tempted to offer an optimistic picture in the plan something that may not be necessarily realistic. The timelines given need to reflect your capacity to accomplish the timeline. The timeline should include:
- The legal procedures or the approvals
- Getting an office or operation space
- Expectations of research and development
- Product development
- Purchase of equipment
- Buying of materials
- Kicking off the marketing campaign
- Business launching date