How To Write A Business Plan For Your Small Business
What’s a business plan? It’s a written document containing almost every detail about your business. It includes details like what you are dealing with, how you would proceed, how much capital you require, what you aim to do, who your target audience is, your targeted annual turnover, etc. It also outlines your venture’s financial objectives and how you plan to attain those objectives keeping the current market environment in mind.
Most importantly, you can use a business plan as a tool to rake in the business capital. If you aim to start a business of your own and don’t have the necessary knowledge to create a business plan. Read on to learn more about creating a business plan for your small business here.
Types of Business Plan
All business plans have one common objective. A business plan describes the purpose and structure of a particular business, assesses the market conditions, and brings forward cash flow projections. Generally, there are three types of business plans – the mini-plan, the working plan, and the presentation plan.
The mini-plan is the starting point. The mini-plan is a shorter plan and is usually less than ten pages and helps in first understanding the potential interest of your venture and then exploring a concept. The working plan carries all the details of your mini-plan. Therefore, it is the full version of the mini-plan. The main purpose of a working plan is to outline how to build a business and carry it forward. You can refer to the working plan as your business progresses towards achieving the objectives.
The third is the presentation plan designed for people who are not the owners or are active business operators, like the bankers or the potential investors. Essentially, it can be a working plan, but the stress is on using proper language and terminology and a marketable presentation. The owners refer to the working plan while writing the presentation plan.
Understand the Basic Structure
You need to understand the basic structure of a business plan. This applies irrespective of whether you have large working capital or you are starting small. The three basic components of a business plan are the business concept, the market analysis, and the financial analysis. Discussing the business concept, you should focus on your business description, the products, and the market it aims to capture. Besides that, you should also cover the structure and arrangement of your organization.
In the market analysis part, you will run your business within a specific marketplace. Therefore, it becomes crucial to understand customer demographics, customer needs, preferences, purchasing patterns, etc. Also, you need to look at the competition you have. If it’s a new business, estimated cash flows, capital expenditures, and the balance sheet will be available in the financial analysis. Aside from that, it will also comprise forecasts regarding when your business will reach the break-even point.
If you don’t have proper financial education or have not been a business owner in the past, this process could be confusing. However, it does not have to be impossible that you would want to drop your business idea. It always helps to take the assistance of a professional to build your business plan. For instance, you can hire a financial advisor or an accountant to help you with financial analysis.
Remember that the financial analysis is the third major structure of a business plan and needs ample attention. The three components mentioned above break down into more components, i.e., company description, market analysis, organization structure and management, products and services, marketing and sales, and funding request.
Put an Appendix at the End
Add an appendix at the end. This will come in handy just like you add an executive summary at the start to provide additional business information. Your potential investors will not just find it easy, but also useful to understand your business.
Adding an appendix is important as it will contain vital information the investors would need before deciding whether to invest in your business or not. In the appendix, you should put in financial statements, business permits, legal documents, credit reports, and biodata for the key people. Additionally, you should also mention the risk factors in the appendix portion.
Don’t forget to go through your business plan before submitting it. Make a thorough check for possible spelling, grammatical, factual, and numerical errors. A business plan should present a clear picture of your vision and how you plan to approach your objectives.
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