Running and building a successful business requires a huge amount of time, effort and resilience. A survey showed that one third of small businesses get started with less than $5,000 and furthermore only 56 percent of business only make it to their fifth year without closing their doors.
When asked about the reason for their failure 42 percent that said that it was due to a lack of market needs. 29 percent said it was due to lack of cash and 23 percent said it was because they hired the wrong team.
Despite of all these bad experiences, failures and misfortunes it is important to know that your new business can still achieve huge amounts of long-term success if you are strategic, organised and well aware of the direction that you want your business to take.
Having a well written business plan that is structured effectively has huge potential to help your business succeed.
In order to help your business, succeed here is a list of the twelve sections that you should include in a business plan.
- Cover Page – Small but important, it should include the name of the business and your name and contact information.
- Table of Contents – It should allow readers to quickly skim or flip through to get to the included topic they are most interested in.
- Executive Summary – An executive summary is a brief but formal explanation of what your company is, how far is going to reach, and why you believe that it is going to be successful. An executive summary should be no more than one page and it should include the mission statement of your business, the description of the industry and the market environment, an explanation of its unique selling points as well as competitive advantages. The financial potential and anticipation of risks, the core team and the stage of the business, especially for those ones that are not starting from scratch, are also vital. Finally, the capital that is requested should be clear and straight to the point.
- Business Description – An in-deep overview of the proposed venture. The final aim is to make potential investors quickly grasp the concept of the business and its value proposition.
- Industry Background – This section will include past and current data about the shape, size, trends, and critical features of the industry you are trying to get in. What is the industry? What is the industry outlook? Who is competing in this industry? What are the industry’s barriers to entry?
- Competitive Analysis – This section will consist of a look at the current and prospective rivals and competitors. Who are your competitors? Which are your competitors’ strengths and weaknesses? What distinguishes your business from theirs? What is the competitive outlook for the industry?
- Market Analysis – This section will focus on your customers, their likes, desires, needs and demographics. The aim is to demonstrate that there is really an opportunity for your venture in the market.
- Management Summary – Introduce your team and the description of how are they going to rock it together. Every business is a risk, especially when there are no precedents to evaluate. This is why the knowledge, skills, and ability of the team to work together as a capable unit, is one of the first elements that would be evaluated by possible investors. Friends and family, despite their love and trust in us, are not always the wisest choice.
- Operations Plan – Focus on the daily business activities and the strategies that will support them. With the use of charts, graphs, or tables, you can show complex information such us your breakeven point, your sources of supplies or your manufacturing and distribution process.
- Marketing Plan – A marketing plan will consist of a detailed strategy of how are you going to sell your product or service. Focus on the opportunity that your business is bringing, and the costumer’s buying behaviour are primary considerations of a successful marketing strategy. Closely followed by spotting the value that each customer is bringing to your business.
- Financial Plan – A financial plan will include a current and future projections of your business financial performance. In short, every financial plan should focus on the following key components. The capital requirements should reflect on how much money you need to raise, how are you going to use the money or how much you need from investors.
Assumptions in terms of growth or internal components of your business should always be backed with strong evidence and expert opinions. The income statement as the forecast of your business for the coming three to five years and the balance sheet generally prepared by your accountant. And finally, the cash flow statement showing weather your company is successfully turning its profits into cash.
- Attachments and Milestones – This part of the plan will include any additional documents that can provide valuable, additional information to the business plan.
