Did you know that creating a business plan should be the first step when launching your business idea? Unfortunately, many of us start a business without having a clear picture of what exactly we want our business to be in future.
That’s why creating business plan is prudent. The plan outlines the route the business intends to take so as to achieve its yearly milestones such as revenue projections.
Developing a business plan serves as a roadmap that outlines the step needed for business success. As an entrepreneur, creating a business plan helps you make future projections of about 3-5 years on how the company or business is expected to grow.
Business plan comprises of different sections stipulating essential components of business success.
The following are the major sections of a good business plan.
1. Executive Summary
This section is the most important section of your business plan. Why? The section represents a summary description of your business idea.
Under this section, you are supposed to inform the reader about your company, its mission statement and why you also think that your business idea is viable. Proper presentation of the executive summary helps to grab the attention of potential investors who can provide the needed finances for startup.
If you already have an established business, the following parts should be highlighted;
• The mission statement
• Company/ business information
• Products/ services the company is dealing with
• Growth highlights and future projections
• Current financial position/information
• Outline of expected future company plans
Note that this section should be written as the last section of your business plan. This is because it gives a summary strength of your plan. Nevertheless, it should always appear first on your business plan documentation.
2. Company Description
Under this section, your business or company goals/objectives must be clearly stipulated. The reader of your business plan must quickly comprehend your business idea and its uniqueness.
When developing you company description, make sure to include;
• The nature of your company/business as well as the market need/demand that you want to respond to.
• Clearly stipulate how your products/services will meet the market demand
• Why you think your business will do well despite existence of other competitors
• Specify your target market or segment that your company is targeting
3. Market Analysis
This section helps you to illustrate your knowledge and experience in your target market. It should include your research findings as well as your conclusions.
The following are the essential components that you should include in your market analysis.
• Market/industry description
• Details about your target market segment
• Uniqueness about your target market
• Business regulations in that market segment
• Market competition analysis
• Prices and gross margin targets
4. Organization and Management
Under this section, you are expected to stipulate clearly the company organizational structure. Other important details are;
• Information pertaining the ownership of the company
• Details about qualifications and experience of your board of directors
• Management team profiles
The above details increase potential investors’ confidence to have trust on your business idea.
5. Service or Product Line
This section is where you get an opportunity to describe your business product/service. You should be able to convince the reader about the benefits that the product or service is providing to the target market segment.
The main focus should be to depict how your product or services are customized to fulfill the market need of your target customers.
6. Funding Request
This section is necessary only if you are planning to seek funding for your business idea.
When making a funding request, make sure to include the following details;
• Your current financial requirement status
• Projected financial funding requirements
• Breakdown of the funding needs and how you are planning to spend the money
• Your future financing strategy if any
7. Financial Projections
Formulate your financial projections when you are through with making market analysis and setting your business objectives. This helps you in making effective resource allocations.
Be sure to include historical financial data or statements if you already have an established business. It’s also important to include the prospective financial data.
Whether you are operating a startup business or a growing one, investors will be eager to know your future financial projections.
The bottom line;
Creating a business plan creates a roadmap of your company’s future growth. Therefore, it should be embraced by every entrepreneur who wants to accomplish great business ideas. The essential of a good business plan are;
• It should clearly state the objectives
• Outlined strategy on the exact product/ service you want to deliver to the market
• Clearly specify your market niche