Basic Business Plan for Dummies

25 Jun

Developing an effective business plan can pose a few challenges for the beginner as well as the experienced. There is no specific content for a business plan; rather, the type of audience and the goals that the company aims to achieve determine the content. However, preparing a business plan can be simplified by using the following format as your guide.

Essential Elements of a Business Plan

  • Executive Summary

An executive summary is the first thing that your audience, perhaps an investor or lender, will read. Because this will leave an impression and a great deal of influence to your audience, make it concise and interesting as possible. However, you do not need big words to include in this section. Rather, a simple summary of the entire business plan consisting of a couple of pages would be enough. Include in the executive summary the highlights of each aspect of the business in order to provide a good snapshot.

  • Company Description

An investor or lender would be interested to learn about your company. If you were in their shoes, you would also want to learn about the person whom you will be giving money. Whether you are still starting or you are already on an expansion process, providing the necessary information will provide a sense of confidence.

  •  Products and Services

Showcase your products in this aspect. Highlight the unique features and benefits that your product or service will offer to customers. Moreover, provide realistic and important information, such as the product life cycle, delivery methods, packaging and other relevant tidbits.

  •  Market Analysis

Analysing your product market will provide you with a good grasp of the market situation that you will have to overcome in marketing your product. Determine the demand and supply levels of the product and see if there is a significant gap you can fill. Research the competition, too. Such information will help you in developing an effective market strategy.

  • Management Strategy

A strong management strategy entails determining the type of organizational structure the business needs. Moreover, each key position should be filled with people with specific capabilities in order to handle the business well. Specify the manner for recruitment, qualifications of employees, compensation strategy, etc.

  • Financial Plan

A financial plan is crucial in a business plan. This aspect includes the fundamental financial statements, projected for up to five years, and financial ratios, to determine the stability of the business. For start-up ventures, financial statements will mainly include projections. On the other hand, existing businesses should include their historical financial data and projected financial statements based on those data.

  • Appendix

This is an optional component in a business plan. The appendix will hold important documents, supporting forms and other relevant papers to support the plan. Examples of documents to include are permits, licenses, titles, and resumes.

A good business plan does not have to include business jargons and other hard-to-digest language. An effective business plan is one that involves simple, concise and direct language. Your purpose is to communicate your business goals and plans through this type of paper and develop a plan to guide you towards success. With a simple business plan such as this, you will be prepared to face investors and lenders.

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