Do you know what a business plan1 is? There can be found many different definitions of the term "business plan", and most of them will be correct. In fact, it is not so important how you define the term. It will be enough to understand what it means and to be able to write a business plan in case of need.
A good business plan consists of several important sections: executive summary, company description, market research, organization and management, product line and/or service line, funding request, and financial projections. We do not mention a title page and a table of contents, but you realize that you cannot go without them. Of course, you can make some changes and add appendices, but most business plans include the above mentioned parts.
Now we are going to explain you how to write every section of your business plan.
This part is probably the major section of your business plan. The executive summary is your main opportunity to interest a potential investor in your project. That is why you should clearly explain here why your ideas are worth paying attention to them.
As a rule, the executive summary includes the following key points:
The mission statement
Examples of the company growth
Services and products
Summary of your future plans
Try to be concise and keep the executive summary to one page. If you are establishing a new business, focus on your own professional skills and experience. Let a potential investor know that you know the market and convince him that you are able to succeed in it.
Though the executive summary is the first part of your business plan, you should better write it at the end.
Description of Your Company
In this section you have to provide a very detailed review of all aspects of your business. The following elements should be included in this part:
Description of your project's nature.
List of the market needs that you are going to satisfy.
List of the potential clients.
Explanation of the advantages of your business that will help it to succeed.
You can add more information to the description if you think it will be useful for readers.
In the section of the market analysis you should demonstrate your knowledge in the area. Include the following points in the market study:
Information about the industry
Description of the target market
Explanation of the identifying characteristics.
Definition of the pricing structure.
Add some more points if necessary.
Organization and Management
This section includes the following information:
The organizational structure of the company.
The company's ownership.
The management team's profiles.
The board of directors' qualifications.
In general, you should explain who is who in your business. Why do you want to bring these people into it? What are they going to be responsible for? What are their qualifications? Provide the information about the owners.
In the next section of the business plan you describe what products or services you will offer to customers. This part usually includes data about the following points:
General description of the products and/or services.
Explanation of the product life cycle2.
Information about intellectual property.
Marketing and Sales
In this part of your business plan you need to focus on the future marketing and sales strategy. Explain a potential investor how you are going to enter the market, develop your business, establish channels of distribution, etc.
In the section of the funding request you have to explain how much money your business needs right now. Provide information about future requirements. Tell an investor how you are going to spend the money (capital expenditures, debt retirement, working capital, acquisitions, etc). Explain every point in detail, because investors will be very interested in it.
This section of your business plan should be written after you have thoroughly analyzed the market. Include in the plan both historical and prospective financial data. At the end, add a brief analysis of the financial information.
Now you know how to write a business plan. Of course, these are just general recommendations but they will be useful for you.