What is a business plan? In brief, a business plan overally explains your business goal, strategies you’ll use to reach them, potential problem you’ll face and how to overcome, organizational structure, and the amount of capital required to finance your company for at least keep running until it breaks even.
Some people think that they don’t need a business plan unless they’ll look for sources of capital, like investor, or banker, crowdfunding, etc. But business plan is not only a pitch for financing, it will guide you meet your business goal and avoid some common small venture mistakes.
How to start? A business plan consist of 7 components:
1. Executive Summary
It conveys what kind of your business. It describes your product or service. Because it’s the first part that reader sees, it must be short but has a good direct impression. It contains outline of your business plan like: its legal form operation, the amount of capital required, repayment term and its share, market value, estimated value and pricing.
2. Business Description
It describes your industry with its trends and opportunity. It also explain your product or service with emphasizing the unique features that make it appart from others.
3. Market Strategies
It defines your market: size, structure, growth prospects, and potential sales. Explain channel to reach them and relationship approach you’ll choose. Make sure that your product or service has a high acceptability. Not only set a goal, but also the strategies to fulfill them. It could be strategy of: pricing, distribution, marketing, customer engagement, and sales itself.
4. Competitive Analysis
State your position in the industry, capture insight about your competitors, take a distinct advantage from analyze their weakness. Realize that you are going to jump into real competition will make you think harder to make your business stands out.
5. Design and Development Plan
It describes the product’s design and development, especially if you have an idea that haven’t done, or if you plan to improve an existing product or service. Set a schedule to show what to do time by time.
6. Operation and Management Plan
It will describe how your daily business activities done by management team. Describe the titles and responsibilities assigned to each person. Make a system to make sure that they will collaborate in running the business effectively.
7. Financial Factor
It show how profitable your business will be. It projects such items as revenue, expenses, capital, and cost of goods. You should project those items for the business’s first years. It can be breaked down into monthly projecting especially revenue and expense stream.
Some or even many people think that it’s not easy to do this financial section. The option is: hire an accountant or look for a good spreadsheet application.
What should we do after make a business plan? Execute it. Refer to it often to guide you in when you’re on the way to your goals. Review your achievement regularly, based on your plan. When you have successfully hit the target, update your plan and grow your company bigger and bigger.