It is commonly attributed to Benjamin Franklin, the 18th-century inventor and politician whose belief in the value of preparation was strong enough that he once made a list of more than 12 character traits around which he planned to structure his life. Many of the most successful entrepreneurs in the United States were known for their careful strategy. Rockefeller, the oil magnate whose name became synonymous with wealth in the late 19th and early 20th centuries, used to talk about “our plan” when he created Standard Oil Trust. The last part of a business plan is the executive summary.
This is where you state what you want for your company in clear and concise language. If your company is a startup, focus on your background and experience, as well as those of any partner, to show the company's foundations. If you're better established, be sure to include details such as when the company started, the names of the founders and their functions, how many employees it has, and where its operations are located. It's crucial to understand the market you're planning to enter.
Find out who your competitors are, analyze their cash flow and profit margins, and research technological developments in the industry that could change the rules of the game. Part of describing your customers is having a general idea of how much they spend and when. For example, Black Friday got its name because it kicks off the lucrative holiday shopping season that leads many retailers to achieve year-round profitability. If your company is facing a similar challenge, you'll want to ensure that it has the resources and cash flow to withstand operating at a loss for 11 months a year.
The executive summary should head your business plan and appear directly after the cover. Ideally, this document should be no more than one page long and should provide a good synopsis of the entire business plan. List the previous achievements of your company, the current position in the market, and the financial characteristics in which these elements are applied. For example, if you are a fledgling graphic design company but have already worked for well-known and renowned clients, include proof of this in your executive summary to highlight the positive connections established by your company.
The purpose of this section is to provide a roadmap for your company's location in your industry and the expected trajectory. Market analysis should also analyze the industry's competitors: who they are, the percentage of the market they occupy and their strengths and weaknesses. Talk about any obstacles you may face in entering the market, such as existing competitors or lack of resources. With a solid executive summary, you'll be well on your way to writing a successful business plan.
For your business plan to stand out, you'll need to conduct market research that demonstrates how your product will work and be financially viable. This means that you'll need to research your target market and find out what their needs are. Market research must be thorough to provide any value; there's no point in making up numbers that you think work if there's nothing to back it up. Often, that means spending hours and figuring it out.
Here it is important to create scenarios about how variables may affect finances; for example, what does a 25% drop in sales look like on the profit and loss sheet?In its simplest terms, a business plan is a blueprint or guide that shows the objectives of your company and your detailed plan for how those objectives will be met. With a well-thought-out pricing strategy, you can ensure that your business is profitable and sustainable in the long term. While this might initially seem to generate less money for the company, the boost it gives to customer value is likely to increase demand and revenues for the company in the long term. A marketing strategy is also essential; it's a global business plan that will help you determine exactly how you will generate revenue and increase your customer base.
The section of your business plan that addresses your management team is where you have the pleasure of introducing the people who drive your business forward. This is where you talk about essentials such as previous objectives achieved by your company or any awards won by its members. It's important to take time to identify all possible risks that could face your business; you have time to find them and reflect on how you want to meaningfully incorporate them into your business plan. Be sure to highlight any competitive advantages you have; it could be anything from a special machine or location of your business or even a talented chef! A business plan serves as an essential basis for starting and managing any new business; its elements are one of the first things people will consider when deciding whether or not to finance it.
For example, some businesses hire people to stand on busy sidewalks and promote products ranging from watches and wallets to cheesecakes! Of course, every company is different; however, there are eight essential elements every business plan must include in order to be effective: an executive summary; market research; pricing strategy; marketing strategy; management team; risk assessment; competitive advantages; and financial projections.
