Your business plan is unarguably one of the most effective tools in getting the desired business result. It is a written document that best describes your business idea, planned future, and how you intend to get there. When effectively done, your business plan is capable of providing a useful roadmap for your business, while also serving as a financing tool. So, regardless of the nature of your business, and its size, preparing and maintaining a business plan is important.
As you plan to craft your business plan, you must note that there is a certain format that is expected from a standard business plan. This format required from your business plan includes the seven (7) key components listed as follows:
- Executive summary
- Business description
- Market strategies
- Competitive analysis
- Design and development plan
- Operations and management plan
- Financial factors
What Areas Should Your Business Plan Address?
In addition to these sections mentioned above, there are certain underlined areas that you should seek to address with your business plan. Addressing these areas squarely, and effectively proves to investors, partners and even associates how grounded you are about the business idea. These areas include
Most entrepreneurs make the common mistake of not developing a Sound Business Concept as they step out to begin a business. Picking up a business idea randomly and running with it is a sign of “potential crack-up”. You must have a strong foundation and knowledge about your prospective business, and it must show in your business plan. With a carefully written business plan, show investors that you understand that gap between a fine business idea and reality.
Understanding of Your Market:
Another area to address is your understanding of the market. Great ideas are not guaranteed success in the market. Various factors contribute to the failure or success of a product in the market. Do you know these factors? Under your market strategy section, you will need to prove a point – you are not trading in unknown waters.
You are about to build a business, and management is an indispensable part of every business. While investors go through your business plan, part of their concern is the ability of the management team. Ensure your team of management is made up of smart people who possess’ unique qualities of turning weaknesses into strengths. The fact is anything built on incapable management is bound to crash. So, ensure your business plan address this area as it should.
Able Financial Control:
You should understand that importance is attached to your ability not just to generate funds/profits but to control/manage it effectively. Qualification and skills in accounting, computer software and cash flow management will serve as an advantage for you as the entrepreneur. However, in a case you don’t have such background, build a financially qualified team. Your team will help in the evaluation of your best options for utilizing retained earnings.