As an entrepreneur, you have probably heard the expression, “failing to plan is planning to fail.” This sentiment is especially true for small businesses. Many small business owners only write a business plan when they are trying to secure funding from banks and investors, but this is a big mistake. Every company needs a business plan, even if it is just a simple one. Here are the top ten details your simple business plan must include:
- A table of contents.
- A business overview that describes your company’s products or services and the niche you will fill in the marketplace.
- A statement of purpose that explains why you think the business will succeed.
- A brief biographical sketch of yourself and any managers or partners who are starting the business alongside you. This is the first thing most investors review and much of their decision about whether or not to extend a loan is based on your experience in your industry.
- A marketing strategy that describes your industry, target customer, business location, projected development schedule, competition, and the trait that will set you apart from competitors.
- Provide a marketing plan that discusses the ways you will advertise your business and the costs associated with each of them. This can include a combination of traditional and guerrilla marketing tactics, including trade shows, press events, social media marketing, search engine optimization, networking, print or media advertising, digital marketing, and so on.
- Discuss the pricing strategy for each product or service you plan to offer, including any promotions associated with those goods.
- Explain how each product or service will be sold (brick and mortar storefront, wholesale, online store, in-home consultations, etc.) as well as your target customer’s buyer cycle.
- Long-term strategies: discuss goals, corporate philosophy, pricing and distribution, growth strategies, marketing and sales schedules, the evolution of product lines, development schedules and planned growth.
- A financial plan: often considered the most important part of any business plan, this section should include three years’ worth of financial statements and a projection of expenses that details your budget, bottom line, fixed assets, cash flow estimations, start-up costs, equipment costs, hiring schedule, future plans for expansion, and other overhead costs.
- Possible exit strategies that may allow an investor to divest with a profit, such as a public offering, merger & acquisition, liquidation, etc. While the term exit strategy has a negative connotation, it’s actually extremely smart to have one ready before you start your business. An exit strategy is a plan to optimize a good situation, rather than to simply get out of a bad one, and it allows you to focus your efforts on running your business. Of course, in the event that a market crashes or a natural catastrophe occurs, an exit strategy can also keep you from losing everything.
- Additional resources for credit or capital. List partners and investors you may already have, along with details about their investment, ownership and control over the business.
- A summary of potential risks and solutions to keep those risks from developing into problems for your business in the future.
Writing a business plan does not have to be a long, arduous task. Take the time to put together a simple plan and practice pitching it to potential investors before you take the plunge. With patience, time and practice, you can be well on your way to getting funding for your business venture.
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