What is a business plan?
A business plan is an essential tool for anyone wishing to start a business. It is a document that describes what you plan to do and how plan to achieve it. You should not start a business without a sound and effective business plan as it is a document which will guide you every step of the way. Likewise, banks and investors will not consider financing your business without a business plan. In short, a business plan is a description of the future of your business. You need to write it in a professional way.
Contents of a business plan
Business plans may vary due to the nature and the size of businesses; however each plan tends to contain the following information:
Executive summary is a comprehensive outline of a business plan. It focuses on the key points of the plan and is very often sought after by external stakeholders. As the term ‘summary’ suggests, executive summary should not be too detailed. However, it must be well written as it serves the role of ‘first impression’.
Business overview includes a summary of the keys to success, mission, aims and objectives, SWOT analysis, opening hours and so on. It gives you an opportunity to introduce the business to the readers.
This section is usually very broad. You need to provide a lot of information on market research, target customers, competitors, technology, pricing strategy, product strategy and so on. You also need to explain why customers should come to you while a lot of alternatives are perhaps out there.
Team & management structure
You should clearly outline the structure of your organisation. Responsibilities of the owner/s and manager/s need to be outlined as well. In this section, you can highlight your skills, experience, and qualifications which make you suitable to run the business. This is very important for investors because they would like to be ensured that they are not leaving their investments in unsuitable hands.
Financial budgets & forecasts
Any business involves some degree of risk. Investors are very interested to know when they will get return on their investment. They need to assess if their investment is worth the risk. That is why you need to be very clear on issues such as business start up cost, sales forecast, cash flow, and ROI. Your business plan must show a clear break-down of all costs and a convincing financial forecast.
The article publication date: June 2016
Finch, B. (2013) How to write a business plan, 4th edition, Kogan Page
Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.