Business plan: its content and how to write it

A business plan outlines your business' financial goals and explains how you will achieve them over the next three to five years. Here's a step-by-step guide to creating a business plan that provides a powerful and detailed roadmap for your business.

1. Write an executive summary

This is your elevator pitch. This should include a mission statement, a brief description of the products or services your business offers, and an extensive overview of your financial growth plans.

Although the executive summary is the first thing investors read, it may be easier to write it last. This allows you to highlight the information you've identified as you create other sections that go into more detail.

Next is the company description. This should include basic information such as:

• Your business's registered name.

• Names of key people in the business. Make sure to highlight unique skills and technical expertise among team members.

Your company description should also define the characteristics of your company. business structure — sole proprietorship, partnership, corporation, etc. — includes each owner's percentage of ownership and the extent of each owner's involvement in the company.

Finally, write a little about the history of your company and the nature of your current business. This prepares the reader to learn about goals in the next section.

3. State your business goals

The third part of a business plan is an objective statement. This section details what you want to achieve both in the short term and over the next few years.

If you are looking for business loan Or for external investment, you can use this section to explain how the funding will help your business grow and how you plan to achieve your growth goals. The key is to clearly explain the opportunity your business presents to the lender.

For example, if your company is launching a second product line, you might explain how the loan will help launch that new product and how much you think sales will increase over the next three years as a result. I don't know.

4. Describe your products and services

This section details the products and services you offer or plan to offer.

Must include:

• A description of how a product or service works.

• Pricing model for the product or service.

• The typical customer you serve.

• Supply chain and order fulfillment strategies.

You can also discuss any current or pending trademarks or patents related to your products or services.

5. Conduct market research

Lenders and investors will want to know what makes your product different from your competitors.inside you Market analysis section, explain who your competitors are. Discuss what they do well and point out what you can do better. If you serve a different or underserved market, please explain that.

6. Outline your marketing and sales plan

Here you can consider how to persuade customers to buy your products or services, and how to foster customer loyalty that leads to repeat business.

7. Perform business financial analysis

If you're a startup, you may not have much information about your business's finances yet. However, if you have an existing business, it's a good idea to include an income statement, a balance sheet listing assets and liabilities, and a cash flow statement showing cash in and out. company.

accounting software You may be able to generate these reports. It also helps calculate metrics such as:

• Net profit margin: Percentage of revenue retained as net income.

• Current ratio: Measuring your liquidity and ability to repay debt.

• Accounts receivable turnover rate: A measure of how often accounts receivable are collected annually.

This is a great place to include charts and graphs to help those reading your plan understand your business' financial health.

8. Make financial projections

This is an important part of your business plan if you are looking for funding or investors. This outlines how your business can generate enough profit to repay a loan or earn a decent return for investors.

Here you will provide monthly or quarterly estimates of your business' sales, expenses, and profits for at least three years. This also includes future numbers assuming you take out a new loan.

Accuracy is important, so carefully analyze past financial statements before making projections. Goals may be aggressive, but they also need to be realistic.

9. Summarize how the company operates.

Before the business plan concludes, it summarizes how the business is structured and outlines each team's responsibilities. This helps readers understand who performs each of the functions described above (manufacturing and selling products and services) and how much each of those functions costs.

If any of your employees have exceptional skills, it's a good idea to include them in their resumes to illustrate the competitive advantage they bring to you.

10. Add any additional information to the appendix.

Finally, attach any supplementary information or additional materials that did not fit elsewhere. It may include:

• Details of your personal and business credit history if you are seeking a loan.

If your appendix is ​​long, consider adding a table of contents at the beginning of this section.

Business plan tips and resources

Here are some tips for creating a detailed and compelling business plan.

Avoid excessive optimism. If you wish to apply, please business bank loan Or if it's a professional investment, someone will have carefully read your business plan. Providing an unreasonable sales quote can hurt your chances of approval.

Proofreading: Spelling, punctuation, and grammatical errors can make it jump off the page and turn away lenders and potential investors. If you're not good at writing and editing, we recommend hiring a professional business writer, copy editor, or proofreader.