Starting a business and becoming successful requires a relentless commitment and demanding process. Apart from the business idea and capital investment, it requires more proper planning and execution. Here comes an effective or powerful business plan which provides a solid foundation for building a successful journey in the business field. A business plan is a first and foremost priority for launching a business.
Business Plan: A business plan is a draft or document which has all the elements of a new business or venture. It acts as an indispensable and fundamental tool to run a successful business. It is also a living document that has been updated regularly every 3, 5, or 10 years for the existing company. It gives a foreseen perspective of changes and future growth outcomes in the business.
There are 5-key essential elements to constitute a powerful business plan that include:
1. Executive Summary: Executive summary should be in an elevator pitch that gives a brief overview of a business plan. The summarization should spark interest to the investors or for loan approval. The executive summary is written at last while documenting a business plan, but it must appear as the first section in the document.
The executive summary includes:
a) Mission statement, which talks about the company’s objectives, values, purpose, advantages, and unique selling proposition (USP) in the market.
b) Reason for launching a company, details about the company’s name and location, as well as professional biographies of the founders, board of directors, and executive members. If it is an existing company, it should highlight the current company’s growth along with the projection of future growth in the near and distant future.
c) Brief information about the products or services that are selling in the market and how they differ from competitors.
d) Brief information about the finance that outlines the company’s current capital and current investors.
2. Description of the company: This section describes the company and its business in detail. It describes the reason why we are in and what for the business. It also describes the products or services that are selling and how they are produced or served. It explicates who are their target customers, how they vie with the rivals and satisfy the need in the marketplace. It also explains the competitive advantage of the products or services.
This section also provides details about market analysis and competitive analysis of the business plan.
a) Market analysis: It is an assessment based on quantitative and qualitative research of the market in the industry. It is imperative to do market research. It provides detailed information such as size, value, and growth in the market. It also highlights the customer segment, customer attrition, buying attitude, and business environment.
b) Competitive analysis: It is an assessment that discusses the strengths and weaknesses of the potential competitors. It gives detailed information about their products, sales, and marketing strategies. The competitive analysis also helps to differentiate your business from your direct and indirect competitors.
3. Management and operations: This section illustrates how the company operates and manages its business. It highlights both the organizational and operational structure of the company and its business process. Through charts, it provides a visual representation of the founders, management team members, operation team members, and the total number of employees. It also showcases the responsibilities of executive members of different departments.
4. Marketing and Sales: This section explains how to find and create customers by setting out marketing and sales strategies. It illustrates how to identify your prospective clients, promote and propagate your products or services in front of the target customers, and implement your communication strategies both online and offline. It also gives details about the marketing budget
The sales part of the section describes the sales management team, sales strategies, and execution objectives. It also highlights a sales training program on how to create and attract customers and convert to leads.
5. Financial summary: It is the last section that gives information in detail about the company’s financial health and future outcome. It showcases expected gross income, profit margin, expected net income through graphical representation. It also highlights cash flow reports, balance sheets, income statements, etc. This section will be a critical part of the document if the company has a potential funding source. Information about the funding source should be current, accurate, and documented in detail.
Conclusion: A powerful business plan will be written in a cohesive, compelling, and persuasive way to attract business delegates, venture capitalists, investors, dealers, or other business personnel. It signifies the root of successful business planning. I emphasize Benjamin Franklin’s famous adage “If you fail to plan, you are planning to fail,” which applies to the business world.