In a time where the life expectancy of business has been drastically reduced due to the COVID pandemic, having a clear, defined, and well-thought-out business plan is a crucial first step in establishing a business and achieving long-term success.
The business plan is indisputably critical for any company to take off. It’s key to securing financing, documenting your business model, outlining your financial projections, and turning that business idea into a reality.
What is a business plan?
A business plan is a documented strategy for a company’s goals and plans. For example, describes the marketing plan, financial projections, market research, business purpose, and mission statement. You can also include the key personnel to achieve the goals and a timeline.
What is a business plan for?
The purpose of a business plan is threefold: it outlines the organization’s strategy for long-term execution, secures financing from investors, and helps forecast business demands.
A business plan serves to lay the foundations of an organization, be certain of what is sought and plan the company’s actions to achieve the goal. It is an excellent instrument that provides visibility and, therefore, controls the scenarios, variables and factors that come together for a company to bodrum escort succeed.
Purposes of a business plan
Chances are, someone writing a business plan is doing so for one or more of the following reasons:
Obtain financing from investors
Since its content revolves around how businesses succeed, break-even, and make a profit, a business plan is used as a tool to raise capital. This document is an entrepreneur’s way of showing potential investors or lenders how their capital will be used and how it will help the business prosper.
All banks, investors, and venture capital firms will want to see a business plan before they provide the money. Investors typically expect an ROI of 10% or more on the capital they put into a company.
Therefore, these investors need to know if and when they will get their money back (perhaps hoping to earn something more). They will want to know the company’s process and strategy for achieving those financial goals; This is where the context provided by the sales, marketing, and operations plans comes into play.
Document a company’s strategy and goals
A business plan should leave no stone unturned.
Business plans can span dozens or even hundreds of pages, allowing their writers to explain a company’s goals and how it will achieve them.
To show potential investors that they’ve addressed every question and thought through every possible scenario, entrepreneurs need to thoroughly explain their marketing, sales, and operations strategies, from acquiring a physical location for the business to a tactical approach to marketing penetration.
These explanations should ultimately lead to a business break-even point supported by a sales forecast and financial projections. The business plan writers will be able to clarify the underlying reasons for everything described in the plan.
Legitimize a business idea
Everyone has a great idea for a business until they put pen to paper and realize it’s not exactly doable. A business plan is an entrepreneur’s way of showing that a business idea is worth pursuing. As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, they are likely to run into a few hiccups that cause them to fine-tune their strategies and metrics, and that’s exactly what the go-to-market plan is for business.
It ensures firm steps for the entrepreneur before taking his business idea to the world. In addition, it reassures readers that the plan’s creator is serious about his work and spends hours thinking about the business idea, developing growth tactics, and calculating financials and projections.
Get an A in your business class
From personal experience, there is a chance that you are here to get business plan ideas for your class project. If that’s the case, we might suggest you check out this post on how to create a business plan.
Elements of a business plan
Subtitle
Every great business plan should have a good structure that starts with a compelling title and subtitle. Then, of course, you’ll want to make it clear that the document is, in fact, a business plan, but the subheading can help tell the story of your business in one short sentence.
Executive Summary
Although this is the last part of the business plan that you will write, it is the first section (and perhaps the only section) that stakeholders will read. The executive summary of a business plan lays the foundation for the rest of the document. Include your company’s mission or vision statement, value proposition, and long-term goals.
Company description
This short business plan section will detail your company name, years of operation, key offerings, and positioning statement. You could even add core values or brief company history. The role this section describes in a business plan is to present your business to the reader compellingly and concisely.
The business opportunity
The business opportunity should convince investors that your organization meets the market’s needs as no other company can. This section explains the specific problem that your company solves in the market and how it will solve it. In addition, you should include your value proposition and high-level information about your target market.
Competitive analysis
Almost every industry has more than one player in the market. So even if your company holds most of the market share in your industry or your business concept is the first of its kind, you still have competition. Therefore, you should objectively review the industry landscape in the competitive analysis section to determine where your business fits. A SWOT analysis is an organized way of shaping this section.
Target market
Who are the main customers of your business, and why? The target market section of your business plan describes this in detail. The target market should explain the ideal customer’s demographic, psychographic, behavioral, and geographic data.
Marketing Plan
Marketing is expansive, and it will be tempting to cover every type of possible marketing. Still, a brief overview of how you will market your unique value proposition to your target audience, accompanied by a tactical plan, will suffice. Again, think broadly and simplify: will you focus on a slow and steady process where you make an initial investment for organic customer acquisition, or will you generate many customers quickly using a paid advertising strategy?
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Financial Summary
Outlining a financial summary of your business and where you would like it to be in the future will support this section. Consider including any monetary information that gives potential investors an idea of the financial health of your business. Assets, liabilities, expenses, debts, investments, income and other economic details are valid here.
Team
You’ve already outlined some big goals, the business opportunity is viable, and the industry is ready for what you’re going to offer. Who is responsible for turning all this high-level strategy into results? The “Team” section of your business plan answers that question, so you should provide an overview of the roles responsible for each goal. Don’t worry if you don’t have all your team members on board yet, but knowing which positions to hire is helpful when seeking investor funding.
Financing
Remember that one of the objectives of a business plan is to secure financing from investors, so you must include the financing requirements that you would like them to meet. In addition, the amount that your company needs, for what reasons and for how long.
So, let’s remember:
Types of businesses plans
Every type of organization needs businesses plan that suits its needs. Below are some of the most common businesses plan types. Then, check out these 12 plans to help you write yours for even more examples.
Business plan for a startup
It is one of the most common business plans for new business ideas. It lays the foundation for the eventual success of a company.
The biggest challenge with the startup business plan is that it is written completely from scratch, so you will have to reference existing industry data and explain unique business strategies and go-to-market plans.
Acquisition businesses plan
Believe it or not, investors also use business plans to acquire existing businesses, not just new businesses.
A business plan for an existing company will explain how an acquisition will change its operating model, what aspects will remain with new ownership and the underlying reasons for any changes or transformations. In addition, the business plan should reflect the current state of the business and why it is for sale.
For example, suppose someone is buying a failing business. In that case, the business plan should explain why the business is being bought and what the new owner will do to change it, referencing past business metrics, post-acquisition sales projections, and a justification for those projections.
Business plan for repositioning
When a company wants to avoid acquisition, it resorts to repositioning its brand or trying something new, for which the CEOs or owners will develop a repositioning plan. This plan:
- Recognize the current state of the company
- Express a vision for the future
- Explain why the company should reposition itself
- Describes a process on how you will adjust
Expansion businesses plan
Expansion of a successful businesses venture to another location usually requires businesses plan, as the project may target a new target market and demand more capital.
Fortunately, expansion businesses plan is not like a startup businesses plan because it doesn’t start from scratch, but references sales, revenue, and successes of existing locations.
However, as good as these benchmarks are, it’s important not to rely too much on them, as this is still a new business that could make or break for myriad reasons.
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