What is Business Plan?
According to wikipedia, A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on the organization, the organization’s financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road-map (a plan) that provides direction to the business. This Guide will teach you How to a Business Plan
In learning How to a Business Plan that is Bankable and salable, here is a free guide for you from the Center of Opportunities. Remember, great planning often means the difference between success and failure and that’s why we are here to help your business succeed.
Here’s the best step-by-step template for writing a winning Business plan for your startup.
The following is a comprehensive guide to creating a great business plan. We’ll start with an overview of key concepts. Then we’ll look at each section of a typical business plan:
- Executive Summary
- Overview and Objectives
- Products and Services
- Market Opportunities
- Sales and Marketing
- Competitive Analysis
- Management Team
- Financial Analysis
Executive Summary :
What is an executive summary?
An executive summary is a brief introduction and summary of your business plan. It should describe your business, the problem that it solves, your target market, and financial highlights.
A good executive summary grabs your reader’s attention and lets them know what it is you do and why they should read the rest of your business plan or proposal. It’s not unusual for investors to make an initial decision just based on reading an executive summary, so it’s important to get it right. We’ll show you how to write an executive summary that sets your business plan apart from the rest.
Many people will read only the summary, no matter what. Others will read the summary first to decide whether or not they read the rest of the plan. The executive summary is essential in plans that are being written for outsiders.
Now if you’re writing a business plan solely for internal use you may not need to write out an executive summary. However, there are some internal plans ––such as an annual operations plan or a strategic plan—that can use a summary to highlight necessary information and showcase a digestible version of the overall plan.
It takes some effort to do a good summary, so if you don’t have a business use for the summary, don’t do it.
Overview and Objectives
According to www.inc.com Providing an overview of your business can be tricky, especially when you’re still in the planning stages. If you already own an existing business, summarizing your current operation should be relatively easy; it can be a lot harder to explain what you plan to become.
So start by taking a step back.
Think about what products and services you will provide, how you will provide those items, what you need to have in order to provide those items, exactly who will provide those items, and most importantly, whom you will provide those items too.
Consider our bicycle rental business example. It serves retail customers. It has an online component, but the core of the business is based on face-to-face transactions for bike rentals and support.
So you’ll need a physical location, bikes, racks and tools and supporting equipment, and other brick-and-mortar related items. You’ll need employees with a very particular set of skills to serve those customers, and you’ll need an operating plan to guide your everyday activities.
Sound like a lot? It boils down to:
- What you will provide
- What you need to run your business
- Who will service your customers, and
- Who your customers are.
In our example, defining the above is fairly simple. You know what you will provide to meet your customer’s needs. You will of course need a certain quantity of bikes to service demand, but you will not need a number of different types of bikes. You need a retail location, furnished to meet the demands of your business. You need semi-skilled employees capable of sizing, customizing, and repairing bikes.
And you know your customers: cycling enthusiasts.
In other businesses and industries, answering the above questions can be more difficult. If you open a restaurant, what you plan to serve will in some ways determine your labor needs, the location you choose, the equipment you need to purchase. And, most important, it will help define your customer. Changing any one element may change other elements; if you cannot afford to purchase expensive kitchen equipment, you may need to adapt your menu accordingly. If you hope to attract an upscale clientele, you may need to invest more in purchasing a prime location and creating an appealing ambiance.
Products and Services
In the Products and Services section of your business plan, you will clearly describe–yep–the products and services your business will provide.
Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended. Use simple terms and avoid industry buzzwords.
On the other hand, describing how the company’s products and services will differ from the competition is critical. So is describing why your products and services are needed if no market currently exists. (For example, before there was Federal Express, overnight delivery was a niche business served by small companies. FedEx had to define the opportunity for a new, large-scale service and justify why customers needed–and would actually use–that service.)
Patents, copyrights, and trademarks you own or have applied for should also be listed in this section.
Depending on the nature of your business, your Products and Services section could be very long or relatively short. If your business is product-focused, you will want to spend more time describing those products.
If you plan to sell a commodity item and the key to your success lies in, say, competitive pricing, you probably don’t need to provide significant product detail. Or if you plan to sell a commodity readily available in a variety of outlets, the key to your business may not be the commodity itself but your ability to market in a more cost-effective way than your competition.
But if you’re creating a new product (or service), make sure you thoroughly explain the nature of the product, its uses, and its value, etc.–otherwise your readers will not have enough information to evaluate your business.
Key questions to answer:
- Are products or services in development or existing (and on the market)?
- What is the timeline for bringing new products and services to market?
- What makes your products or services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages you will need to overcome? (And if so, how?)
- Is price an issue? Will your operating costs be low enough to allow a reasonable profit margin?
- How will you acquire your products? Are you the manufacturer? Do you assemble products using components provided by others? Do you purchase products from suppliers or wholesalers? If your business takes off, is a steady supply of products available?\
Sales and marketing
In learning How to a Business Plan, Sales and Marketing should not be overemphasized: These are two business functions within an organization — they both impact lead generation and revenue. The term, sales, refers to all activities that lead to the selling of goods and services. And marketing is the process of getting people interested in the goods and services being sold.
Sales and Marketing Responsibilities
sometimes grouped separately, sales and marketing functions overlap. Those businesses that recognize the critical areas of overlap may get more value out of their teams by combining efforts. After all, both sales and marketing have the same end goal: increasing sales.
Follow up. A key sales function is following up with the leads generated by a marketing department. Successful businesses usually develop a structured handoff process so that each marketing-qualified lead receives appropriate and timely follow-up from a sales team member.
Relationship building. The era of the “hard sell” continues to fade. Modern sales focus on relationship building to help create trust between a buyer and seller. Effective salespersons can understand the needs of the buyer and develop a persuasive—but not pushy—message to help differentiate the company’s product.
Closing. Most salespersons are judged by their ability to turn leads into customers. While some may envision a face-to-face meeting and handshake as the close of a sale, many businesses also close sales online or over the phone. This can broaden the responsibilities of closing a sale to more employees.
Retention. Sales and marketing have responsibility for improving client retention. By checking in with an existing client, a sales team member can help demonstrate an interest in long-term client success, not just a one-time sale. The ongoing effort to build strong relationships can help improve retention and lead to “upsells”—additional sales beyond the initial purchase.
Awareness. An effort to build awareness of a product or service is the first step in the sales process. A successful awareness-building effort may help a prospect recognize a brand or product name or may ensure a company makes the shortlist for purchasing consideration.
Engagement. Engagement efforts build on an initial awareness campaign to deepen a consumer’s connection to a company or product. Marketing materials aimed at engagement may be longer (e.g. a whitepaper or video) compared to a more superficial awareness piece (e.g. direct mailer or radio advertisement).
Conversion. A conversion is the critical transition of a potential customer from an anonymous person to a known lead. For marketing teams, a conversion may be the completion of a web form, the instigation of a webchat, or a phone call to a customer service line.
Retention. Even after a purchase, a marketing team can help a business grow its repeat customers. The retention function of marketing helps maintain awareness and engagement after a sale. This may include email newsletters or invitations to webinars that help a consumer get more value from a product. The retention function of marketing is especially critical for subscription services.
A competitive analysis is a strategy where you identify major competitors and research their products, sales, and marketing strategies. By doing this, you can create solid business strategies that improve upon your competitors. So, if you want to learn How to write a Business plan, you have to consider your competitors and analyze them properly.
The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability. Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory–all the stuff involved in operating your business on a day-to-day basis.
Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will run their businesses.
Your goal is to answer the following key questions:
- What facilities, equipment, and supplies do you need?
- What is your organizational structure? Who is responsible for which aspects of the business?
- Is research and development required, either during start up or as an ongoing operation? If so, how will you accomplish this task?
- What are your initial staffing needs? When and how will you add staff?
- How will you establish business relationships with vendors and suppliers? How will those relationships impact your day-to-day operations?
- How will your operations change as the company grows? What steps will you take to cut costs if the company initially does not perform up to expectations?
Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I’ve done with other sections, use the following to determine the key areas your plan should address:
Location and Facility Management
In terms of location, describe:
- Zoning requirements
- The type of building you need
- The space you need
- Power and utility requirements
- Access: Customers, suppliers, shipping, etc.
- Specialized construction or renovations
- Interior and exterior remodeling and preparation
- Production methods
- Service methods
- Inventory control
- Sales and customer service
- Receiving and Delivery
- Maintenance, cleaning, and re-stocking
- Licenses and permits
- Environmental or health regulations
- Patents, trademarks, and copyrights
- Typical staffing
- Breakdown of skills required
- Recruiting and retention
- Policies and procedures
- Pay structures
- Anticipated inventory levels
- Turnover rate
- Lead times
- Seasonal fluctuations in demand
- Major suppliers
- Back-up suppliers and contingency plans
- Credit and payment policies according to the business blog https://www.inc.com/
Management Team :
The definition of ‘Management team‘
The management team is also generally responsible for putting together the business strategy and ensuring the business objectives are met. The Management team is held accountable by the companies board of directors.
Some organizations may operate a fairly flat team hierarchy with one or just a few layers of management while other companies may operate with several layers of the management team.
Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a winning business plan.
This is the process of evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to warrant a monetary investment.
- If conducted internally, financial analysis can help managers make future business decisions or review historical trends for past successes.
- If conducted externally, financial analysis can help investors choose the best possible investment opportunities.
- There are two main types of financial analysis: fundamental analysis and technical analysis.
- Fundamental analysis uses ratios and financial statement data to determine the intrinsic value of a security.
- Technical analysis assumes a security’s value is already determined by its price, and it focuses instead on trends in value over time.
Financial analysis is used to evaluate economic trends, set financial policy, build long-term plans for business activity, and identify projects or companies for investment. This is done through the synthesis of financial numbers and data. A financial analyst will thoroughly examine a company’s financial statements—the income statement, balance sheet, and cash flow statement. Financial analysis can be conducted in both corporate finance and investment finance settings.
After learning How to a Business Plan, If you are applying for any loan or Grants such as The Tony Elumelu Foundation, this Guide will be of great help for you.