What Is A Simple Business Plan?
A simple business plan is a sales document, which helps potential investors and management teams find out the long-term feasibility of a business idea. A proper business plan will help the management team work towards a common goal. A great business plan will not only ensure the successes of your business but it will surely save you from losing money before starting a business. A clearly defined business plan will also increase your chances to be found by potential investors.
How To Create A Simple Business Plan?
As a roadmap, the business plan must be simple, short and clearly defined. Before creating a business plan you must collect all types of data regarding your industry and your target audience. Data means all P’s in the business like price, promotion, people and place. All corporate business houses conduct a thorough research before starting a new business or a new branch of an existing business and most of the time they even appoint some relevant outside agencies to get a clear picture about the market, where they are planning to enter.
Remember, the purpose of a business plan is to be read and understood by people like investors and co-partners. Investors are busy people who might not have much more time to spend on a single business plan, so keep it interesting, concise, relevant and easy to understand.
If you are creating a business plan for fundraising, then the chances are very rare that a potential investor will be an expert in your industry. Hence, avoid all jargons particularly the ones related to your industry. The important things you should include in your business plans are executive summary, opportunity, execution, financial plan, and exit strategy.
An executive summary is the starting point of a business plan and here we should provide details about the business, its objectives and concepts. Business objectives mean the goals you want to achieve in the future for your business. Clearly define your realistic business goals and this will determine who you are and where you want to go. The executive summary is an important section as it determines the goals of the business and rest is the plan to achieve these goals.
This section is the most concise part of the business plan that describes all the important things about your business as an overview. Business overview consists of the founding stories, about the management team, legal structure of the business, locations, and vision and mission statements. A mission statement includes the principles which lead you towards the defined goals. This section is mostly meant for external people to get an overall idea about your business.
About the startup
This section describes all the details about the background of the startup. Here you should describe the background of the founders, what problems you are going to address and why you selected this particular problem as an opportunity for your startup. If there is any background story connected to your real life experience, then don’t forget to put them in writing. This section reveals a little bit about your target market and competition.
Products and Services
Here is the section where you have to detail out your service or products and its uniqueness. One of the most important characteristics of a business plan is genuineness, so be realistic and provide details about the strength and weakness of your product or services. If there are any disadvantages to your product or services, then mention how you are going to change it into an opportunity.
This section covers the details of the industry you are entering into. To make this chapter perfect, you should do a proper research regarding your industry and find out what hurt other players and how it is going to impact your business. A good investor always wants to know how much knowledge you have about the industry in which they are going to invest. So it is your duty to convince the investors about how your business will be a suitable addition to the industry.
The elements included in this section are size, growth, competitive players, business strategy, competitive analysis etc.
Not everyone is your target audience. So, create some buyer personas which are suitable for your product or service. In this part of the business plan, you should describe your plans to take your product to the right target audience. Marketing strategy is an important subject to address. You can go through the following article to know more about marketing strategy.
About The Market
This is a brief about the market and its potential for your products or services. Include this chapter with the growth, customer behaviour, buying cycle and willingness to adopt new products or services of your target market. Show some data from trusted sources to convince your potential investors about the growth and stability of your target market. Here you need to establish how you are different from the competition and hence more relevant to your customers.
Operation plan means all the details about day-to-day executions, production plan, HR policies, and locations. Here you should mention all the physical necessities, its cost including a feasibility report. In this section, you have to demonstrate the process involved in the production of your product or the delivery process of your services.
This section should depict whether your business will be viable or not. This is not only meant for your investors, but it will also help you evaluate the business month after month by putting real numbers in the financial statements. Usually, financial plans include balance sheets, income and expense statements, cash flow statements and break-even analysis for the coming three years (projected financial statements).
A great exit strategy will make a business plan more attractive. It is about how you will leave your business in the future from day one. Every investor would like to exit the business after making a reasonable profit and usually, they do it within 3 years. So plan a business exit strategy that aligns with the legal structure of your business. Some exit options include the full or partial sale to a third party, corporate partnerships, joint ventures, employee stock ownership plans, IPO (initial public offering) and selling or transferring ownership to family members.