6 elements of a great business plan
A successful entrepreneurship starts with a bright idea. But is that all? Not really. You should convert your ideas into a well-organised format in order to attract investors. This is called a business plan. A well-crafted business plan not only gets you investors but also gives you a better idea about your business and its possibilities.
An effective business plan needs to have a few components – here are a few to name.
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This is the most significant part of your business plan and the part where you grab your reader’s attention. So your executive summary should be well-scripted, crisp and clear. It should be written in a way that prompts a potential investor to read the entire business plan. It is better to write the entire business plan first and then come back to the executive summary. In short, an executive summary is a brief synopsis of your entire business plan.
Investors would like to know about your company before they invest their money in your plan. So your company should have a well-defined goal/mission statement. A proper analysis of the strengths, weaknesses, threats and opportunities facing your enterprise are to be mentioned. Investors would also like to know about your organisational structure and the experience and competency of the people at decision-making levels.
Description of your product or service
Describe the product/service which you are going to provide and what makes it unique. Give a strong reason which would make people prefer your product/service over those provided by your competitors. Details like product life cycle also could be mentioned in this part. If your product/service is based on an entirely new concept, then you should explain the problem or need that it addresses. If the concept is interesting, stress on what extra benefits your product or service will bring to the table.
The selection of your target market is very critical to the success of your business. Proper market research has to be done to ascertain this. Details like projected market share, targeted customers and main competitors in the industry are discussed here. Present size, growth potential and trends in your target market are studied in detail.
Sales and marketing plan
Once you have your target market defined, you should devise your marketing strategies with your target market in mind. Marketing mediums, timing of marketing campaigns and other strategically important decisions are to be mentioned in this section.
We all know that ultimately, every business is about making money. So proper revenue projections, break even analysis and cash flow analysis have to be done and documented. This will instil confidence in the minds of potential investors. Assumptions made while making financial projections should be clearly explained.
Important points regarding all the issues discussed in the business plan should be mentioned briefly in the executive summary, as in most cases, the investor would just glance through your executive summary.
So don’t just keep your ideas inside your head. Convert them into compelling business plans and get going!