If you want to start a business, it’s important to have a solid business plan in place. This document will outline your goals, strategies, and how you plan on achieving them.
Without a business plan, it will be very difficult to make your business successful. In this blog post, we will discuss the key elements of a successful business plan.
1. Executive summary
The executive summary is a brief overview of your business plan. It should include your company’s mission statement, as well as an overview of your products or services.
Make sure to keep this section concise and clear, so that your reader can easily understand what your business is all about.
The executive summary is one of the most important aspects of your business plan, so make sure to take the time to craft a strong one.
Remember to keep it clear, concise, and focused on your company’s mission. With a strong executive summary, you’ll be well on your way to writing a successful business plan.
Some things to write about in an Executive Summary-
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What your business does
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Your company’s mission statement
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An overview of your products or services
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Why your business is unique or special in some way
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The goals you hope to achieve with your business
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How do you plan on achieving those goals
2. Description of your product or service
Here you will go into a deep overview of your products or services. You will need to describe what your product or service is, how it works, and why it is needed.
Make sure you go into detail here, so that your reader understands exactly what you’re offering. You should also include information about your target market, and how you plan on reaching them.
Make sure that you are clear about how your products or services work so that you don’t confuse the reader with too much information. Whilst this section is important, make sure you don’t try and sell it too much here as whilst your passion will come across to investors, they are mostly interested in how it will make money, not how pretty it is.
If you are targeting a gap in the market, explain what that gap is and why your product or service would fill that gap. If you are entering a market with competition, it makes sense to explain why your product or service differs or improves upon your competition
Make sure to include the following in this section-
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A clear description of your product or service
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How your product or service works
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Why your product or service is needed
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Your target demographics
3. Market Research
For your business plan to stand out you will need to conduct market research which shows how your product will work and be financially viable. This means that you will have to research your target market and find out what their needs are.
You’ll also need to look at your competition, and find out what they’re doing right and wrong. This will help you to position your product or service in the market, and make it stand out from the crowd.
Market research must be thorough for it to provide any value. There’s no point making up numbers that you think work if there is nothing to back that up. Often that means putting in the hours and finding out-
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What your prospective clients want
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What they’ll pay for your product
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How many of them there are
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Who the competition is
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What the competition is doing right and wrong
4. Sales & Marketing Strategy
You have a product or service but how are you going to sell it. You may think you have the best idea since sliced bread but unless people know about it, why would they buy it?
Marketing a product can be a daunting minefield for many and not every sales platform will work for your business. It is important to do some research and see where your prospective clients currently reside. Here are some helpful hints for different marketing platforms-
Online Platforms
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Linked In- A great platform for any business-to-business services
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Instagram- A younger demographic with shorter attention spans. Great for visual products
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Facebook- The Social Media platform. Great for building a brand
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Snapchat- Used by a younger demographic
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Tik Tok- Great for viral marketing
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Email Marketing- If you offer information services a newsletter can be a great way to distribute it.
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Website- A must for any modern business. A shop front for all your products and services. There are many ways to generate traffic to your website including SEO, Google Ads, Facebook Ads and so on.
Traditional Platforms
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Billboards- Expensive but great for brand awareness, particularly for drivers and commuters.
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Leaflets- Can be distributed in a wide range of places, shopping centres, through doors or at events.
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Tv Commercials- Can be expensive but has a wide reach.
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Radio- often overlooked but can have a captive audience.
Aside from where you are planning to promote your business, you must also consider how you plan to showcase your product. Will you take great photos of your product or perhaps a video to show how it works?
What’s your pricing strategy?
When it comes to setting prices for your products or services, there are a few things you’ll need to take into consideration. First, you’ll need to find out the cost of goods sold (COGS). This includes the cost of materials, labour, and overhead. Once you have your COGS figured out, you can start thinking about how much profit you’d like to make.
Next, you’ll need to consider your target market. What are they willing to pay for your product or service? If you’re selling to other businesses, you’ll want to make sure your prices are competitive. If you’re selling to consumers, you’ll need to find a balance between what they’re willing to pay and what your product is worth.
Once you have an idea of your COGS and target market, you can start setting prices for your products or services. Remember, it’s important to review your prices regularly and make adjustments as needed. With a well-thought-out pricing strategy, you can ensure that your business is profitable and sustainable in the long run.
5. Operational Planning
This section is all about how your business will run on a day-to-day basis. It includes information on your business location, hours of operation, and staff.
You’ll need to think about things like your office space, equipment, inventory, and shipping. If you have a brick-and-mortar store, you’ll also need to consider things like parking and foot traffic. All of this needs to be taken into consideration when putting together your operational plan.
In this section, you will look at the cost of the overheads and the day-to-day of your business. It’s important to be as thorough as possible so that you have a good idea of how much capital and how much cash flow is required.
In addition, you’ll need to think about the people who will be running your business. This includes employees, contractors, and suppliers. You’ll need to develop job descriptions for each position, as well as a process for onboarding new employees.
Your operational plan should be detailed and specific to your business. By taking the time to put together a well-thought-out plan, you can ensure that your business runs smoothly and efficiently.
6. Risk Management
No business is without risk, but there are ways to mitigate those risks. In this section of your business plan, you’ll need to identify the risks that your business faces and develop a plan for how to address them.
Some common risks that businesses face include financial instability, legal issues, and bad publicity. However, there are many other risks that your business could face. It’s important to take the time to identify all of the potential risks that your business could encounter.
It is important here to create variables that may happen and create scenarios for how they will affect the finances, e.g. a downturn in sales by 25%, what does that look like in the profit and loss sheet?
Once you’ve identified the risks, you’ll need to develop a plan for how to address them. This might include things like insurance policies, safety protocols, or contingency plans.
You can read more about Risk Management in our post: Navigating the Unknown: The Role of Risk Management in Business Planning for Start-ups
7. SWOT Analysis
A SWOT analysis is a tool that can be used to assess your business and identify areas where you may need to make improvements. This analysis looks at your business’s strengths, weaknesses, opportunities, and threats.
When you create a SWOT analysis, you can get a better understanding of your business and what needs to be done in order to make it successful.
There are many different ways to conduct a SWOT analysis. However, one of the simplest methods is to use a SWOT template. This template will help you identify and assess each element of your business. Once you’ve completed your analysis, you’ll have a better understanding of where your business might be improved and where it may contain issues to generating a profit.
An example of a SWOT Analysis for your business might look like this:
Strengths****Weaknesses-Product is unique and fills a gap in the market -Strong marketing team -An experienced management team-High cost of goods sold -Inexperienced sales team -Lack of brand recognitionOpportunities****Threats-Expanding into new markets -Developing new products -Forming partnerships with other businesses-Competition from larger businesses -Changes in consumer trends -Economic recession
8. Strong Financials
The most important aspect of any business plan is finance. This is where you will show how you intend to finance the venture and also how you intend to make money out of it.
Good financials will show a detailed look at
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Your start-up costs
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How you will generate revenue
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Your profit margins
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Your cash flow projections
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The viability of your business idea
If you are seeking investment then your financials need to be rock solid as this is what potential investors will look at first. They need to see that there is a clear path to profitability and that their money will be safe.
If you don’t have any experience in putting together financials, it’s important to seek professional help. This doesn’t mean that you have to hire an accountant, but it does mean that you should get some advice from someone who knows what they’re doing.
Putting all of this together yourself will require a lot of research and detailed analysis and we’ve put a post together on how long does it take to write a business plan. The good news it that you don’t need to put this all together on your own and Square Plan can help you craft the perfect business plan.