Setting up a new business is considered to be virtually impossible without a properly advised business plan. This, however, has proven itself rather difficult for many up-and-coming entrepreneurs, due to the fact that they simply don’t have enough information regarding where they should start and with what, which options to include and which to avoid. That said, here is an overview or the key elements needed for an effective business plan guaranteed to bring success to your newly started business venture.
1. Executive summary
The executive summary is the first part of any business plan. It is a summary of the entire plan which should be one to two pages long. The summary is used to provide the company’s profile, as well as the goals which the business needs to accomplish. As a preview for the entire business plan, the executive summary has to include all details which are necessary for the business, such as business concept, financial features, and requirements, current company positions, as well as any major achievements.
2. Business or company description
A business description often begins with a short summary of the industry in question. It should detail the present outlook and all the future possibilities the company might experience. Additionally, the description needs to provide all the information regarding various industry markets, including new products and services which might positively or negatively impact the business. All the information needs to be based on reliable data and trustworthy sources. Be very precise with the description and make sure to describe the entire structure of your new business.
3. Marketing strategies
Marketing strategies are the direct result of a meticulously performed analysis of the current state of the market. Using market analysis, an entrepreneur has to become completely familiar with the aspects of said market, in order to define it properly and position himself in order in such a way to reap the most benefits. The market is defined in the terms of structure, size, prospects for growing, as well as the potential for sales and new trends. Just keep in mind that total feasible market is only a portion or the entire market which is available not only for you but also for your competitors.
4. Market analysis
Competitive or market analysis is the part of a business plan which goes over the business strategy and its relation to potential competition. The point of market analysis is to define all strong and weak points in your competition and devise strategies which will give you an advantage over them. These strategies can even include setting up obstacles which prevent your competitors from entering and operating in your market. The strategies you’ll end up using are directly related to the key skills and assets necessary to become successful in that particular industry.
5. Development plan
A development plan is used to provide potential investors with information regarding the design of your products, product development, marketing strategies and the development budget necessary to reach the goal. Once your market analysis is complete, goals regarding the development of marketing and organizational plans will become apparent. Every defined goal has to contain a set of characteristics, such as individual and distinct timelines, details regarding the way they bring success your business and the impact they’ll have on your company’s future.
6. Management and operations plan
Management and operations plan describe how your business will function on a daily basis. It should highlight all the organizational logistics such as tasks that the management team needs to perform, tasks which are assigned to each of the divisions within your company and expenses related to those tasks. Every operation plan contains three distinct tables which are used as a foundation for future financial rejections. These tables should detail the operating expenses, capital requirements and cost of the goods your company is offering.
7. Financial projections
The last item on the long list of business plan tasks are the financial projections. They are used to provide investors with an accurate representation of your company value at that moment, as well as statements regarding the flow of cash, income and overall balance. These statements should always be provided as they are because they adequately measure different aspects regarding your company’s financial state. All three statements are equally important, but it may be best to start with the income statement first.
Adding an appendix is optional when it comes to forming a business plan. Although most entrepreneurs don’t use them, they are an excellent way to provide useful information which otherwise doesn’t fit any of the sections mentioned above, such as resume information, leases, permits, etc. These are all the elements which need to be included in every business plan and taking the time to gather and present the information properly will help a lot when it comes to convincing potential investors to provide funding.
Sam Cyrus is CEO and co-founder of Agseosydney, a Digital Marketing agency from Australia. Sam is also a creative writer and likes to share his insights on entrepreneurship, business, online marketing, SEO and social media. He currently collaborates with Nirmal Web Design Sydney.