Have you decided to start your own small business? If yes, congratulations! However, you should be ready to work hard and devotedly as the way to success is full of obstacles. One of the most important steps is creating a business plan for your undertaking. It will help clarify the path you intend to take with the business. This is a kind of journey that will be more productive with a guide called “a business plan.’’
A useful business plan
Actually, the plan is a document outlining the basics of your business, products, and services. It should include your target market, your goals and the way to achieve them. In fact, when you start a business, your plan is one of the most important plans such as marketing plan and financial plan. Your business plan should illustrate all the mentioned plans as one comprehensive document.
Reasons to create a business plan
There are certain reasons why a business plan is necessary for a small business. Therefore, a plan is required:
- When you are applying for a bank loan, get investors; bring in business partners to start your business
- To handle some research regarding your target group, level of competition, market demands, etc.
- Outline your current position, the point you want to get to identify the specific actions you need to take to reach there
- Provide essential background info about your business, strategy, culture to employees, including staff, managers, etc.
- To give basis of your business budget and useful tool for managing monthly cash flow
Traditional or one-page?
The types of business plans are of a great number. It may include start-up plans, internal planning documents, strategic plans, business plans, etc. Surely, they have different objectives but all are filed in two primary formats, either traditional (formal) business plan or simplified (one-page) business plan.A traditional business plan is rather a formal document which includes:
- The highlight of the most important information, i.e. the executive summary
- Your business location, the size of the company, your vision, all in all, the whole description of the company
- The products and services you sell
- A detailed market analysis including the summary of your target market and competition
- The structure of your business, the members and how it is managed
- Financial analysis such as details for financing your business, your ongoing operating expenses, etc.
For a simplified business plan, you need to get answers to the following questions:
- What are you creating?
- What are your mission and objectives
- The total amount of start-up capital to launch the business
- Your monthly expenses after the launch
- What income do you expect?
- Your future milestones
Creating a business plan step-by-step
After taking the above-described measures, it is time to get a thorough understanding of how to build a good business plan.
Determine the business plan
Time to focus on the type of business plan to file. As we have already mentioned, you can take a certain type of a plan suitable to your objectives. The mini-plan, working plan or a presentation plan is among them to choose.
After you choose the type of your business plan, it is essential to understand the basic elements of the plan. The focus should be on the description of the business, its market, products, organizational structure, and management. Don’t forget about the market and financial analysis.
Don’t forget an appendix
To complete your business plan, you should also include an appendix for additional information. In fact, potential investors might want some extra info before making any decision. The appendix may include financial statements, credit reports, business licenses or permits, certain legal documents, contract, CVs or bios of the key staff, etc. It is also important to mention risk factors influencing your plans.
Revision and editing
It may seem simple, but before confirming your business plan, you should review the spelling and grammar. Reading aloud will help you find the errors easily. Make a copy and give to another person (May it be a trusted friend or colleague) to provide feedback.
The last, but not least: the cover page
The cover page of your business plan will give an aesthetic appeal to it. It should include the phrase “Business Plan” centered and in large bold font. You should also write your company name, logo, contact info along with the title. Sound simple and clear.
If you don’t have a complete understanding of how to build your business plan, you should address to corresponding people, such as an accountant if you have questions regarding financial affairs. Surely, there will be also legal issues when you will need a good advice from a highly qualified attorney.As an entrepreneur being legally protected is a must to run a legally protected business.
In addition, any business success depends on structured and hard work. A business plan is a kind of ”leader” guiding you to organize a prospective business. Follow our instructions and build your small business empire with a professional approach.