After going through this article you should have a clear
business plan definition and core principles geared towards its development.
Business plan definition
There are different business plan definitions but I have
summarized them to: - A business plan is a document that is developed to guide
the operations of the business. It outlines the business objectives and goals
and how they can be achieved it will also assess pitfalls that the business may
encounter and suggests mitigation measures in case the risks are realized or
encountered. This document may be developed for purposes of both capital
acquisitions in case you need investors or just to guide you in running your
business.
A business plan just like all formal documents adheres to a
structure with regards to content. It is basically a research paper on your
business and seeks to answer different questions with regards to the business
operations.
Cover page
This section will outline general particulars of the
business such as the name, location, and contact information.
Executive summary
This outlines your purpose for the business plan whether it
is written for purposes of loan acquisition, investor funding or customer
information. It also seeks to address the issue of financing the funds acquired
and if you consider selling a section of your business to partner. It is
basically a pitch to would be financiers or stakeholders. The summary will
include the services or products, sales and profits or projected value in case
of a start up, the capital or funding required for the start or expansion and
other highlights such as patents.
Business description
This will include the industry and how your business fits in
and how it will be a beneficial venture to pursue. This is a very sensitive
section because you will relate facts of your business to the industry’s
developments. Benefits of your venture will be measured against these facts so
it is advisable to carry out thorough research. You will be required to show
the size of the market and target customers.
Product/service description
Here you will describe the product and or services you offer
and how they are beneficial to your targeted customers. You will also be
required to state if there exist similar products or services and how the ones
you offer are different or better than the rest.
Market analysis
This is basically information that outlines how you will
position yourself within the market in terms of distribution channels,
marketing and pricing. It will also outline your target market and niches to be
filled or are unsatisfactorily serviced by your competitors.
Competitive analysis
This is the section where you detail your SWOT analysis
against your competitors. This will point to your strengths and weaknesses,
opportunities that you have over your competitors, threats or risks that your
competitors pose depending on their strategies versus your own.
Operations
This will outline how your management team will handle the
different operations as necessitated by the business. It also shows your day to
day activities including expected money in and money out as determined by
expected operations.
Financials
Income statement, cash flow statement and balance sheet are
the three financial statements that are required. The income statement determines whether the business has made a profit
or a loss by subtracting expenses from income generated and is accompanied by
an analysis. Cash flow statement
which just shows if the company has enough cash to meet its operations
requirement a business is required to have enough cash when crossing over to
the next month to show it has been able to meet all its obligations and still
remains profitable into the next month. Balance
sheet assesses the net worth of the business by analyzing assets against
liabilities and equity accumulation.
No comments:
Post a Comment