A business plan is an essential roadmap for business success for yourself. In case you wish to raise funds, it would be a document that would convey to the bank or investor what you intend to do in complete detail. This document generally projects 5 years ahead and outlines the route a company intends to take to grow revenues with all calculations.
The executive summary is often considered the most important & first 3 pages of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest. The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document. If you are an established business, be sure to include the following information:
The Mission Statement – This explains what your business is all about. It should be between several sentences and a paragraph.
Company Information – Include a short para that covers when your business was formed, the names of the founders and their roles, your number of employees, and your business location(s).
Growth Highlights – Include examples of company growth, such as financial or market highlights (for example, “XYZ Firm increased profit margins and market share year-over-year since its foundation). Graphs and charts can be helpful in this section.
Your Products/Services -- Briefly describe the products or services you provide.
Financial Information If you are seeking financing, include any information about your current bank and investors. A short table of cashflow, investment, breakup of loans, equity/margin may be clearly indicated.
Summarize future plans – Explain where you would like to take your business.
This section of your business plan provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business and its unique proposition. What to Include in Your Company Description :
• Describe the nature of your business and list the marketplace needs that you are trying to satisfy.
• Explain how your products and services meet these needs.
• List the specific consumers, organizations or businesses that your company serves or will serve.
• Explain the competitive advantages that you believe will make your business a success such as your location, expert personnel, efficient operations, or ability to bring value to your customers.
The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions. This section is usually presented after the company description.
• Industry Description and Outlook – Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.
• Information About Your Target Market – Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:
• Distinguishing characteristics – What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?
• Size of the primary target market – In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group? For more information, see our market research guide for tips and free government resources that can help you build a market profile.
• How much market share can you gain? – What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.
• Pricing and gross margin targets – Define your , gross margin levels, and any discount that you plan to use. When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.
• Competitive Analysis – Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:Market Share, Strengths and weaknesses,How important is your target market to your competitors?,Are there any barriers that may hinder you as you enter the market?,What is your window of opportunity to enter the market? ,Are there any indirect or secondary competitors who may impact your success?,What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?
• Regulatory Restrictions – Include any customer or governmental regulatory requirements affecting your business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business.