Business Plan: The Road Map to Success
Managing a company involves making decisions that impact the company's results, employees, customers, and vendors. Therefore, business plans are essential. They allow us to make informed decisions in advance, so we know months ahead what actions we need to take. What exactly is a business plan and why is it important?
A business plan acts as a roadmap for our company, enabling us to set goals and plan how to achieve them from marketing, financial, and operational perspectives. It is a written document and, despite the various models and types available, it generally should include the following sections:
- Executive Summary: This is a summary of the company’s basics, such as the mission statement, leadership, employees, operational aspects, and location.
- Description of Products and Services: This section outlines the company's offerings and could include additional aspects like pricing, consumer benefits, production processes, R&D processes, and other relevant details related to products and services.
- Market Analysis: This section provides information about the target market and main competitors. Some useful tools include the SWOT model, Porter’s Five Forces, the VRIO Framework, and the PESTEL analysis. It will also specify consumer demand for the company’s products and services.
- Marketing Strategy: This describes how the company plans to attract and retain customers, including distribution channels, advertising strategies, marketing campaign plans, and the types of media that will be used.
- Financial Planning: This includes detailed financial planning and projections, complete with financial statements.
- Budget: This demonstrates how all the previous plans will be funded. It’s important to outline the budget and include costs related to human resources, manufacturing, sales and marketing, and any other business-related expenses.
3 Reasons to Create a Business Plan
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Guidance: A business plan serves as a map for managing your business. With a business plan, you can anticipate what you need to do, where, when, and how to do it over the next few years. Without a business plan, you may find yourself making random decisions and falling behind competitors.
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Funding: A business plan acts as a written document to show to investors or banks when seeking funds. Potential financiers need assurance that their money will be used wisely and that they will be able to recover their investment with interest. A well-prepared business plan demonstrates that you know what you are doing and that their money is in good hands.
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Efficiency: Writing a business plan doesn’t require a significant amount of time. It is not a complex tool that demands extensive time and resources to implement. There are many free online templates and different approaches available.
How to Start?
Now that you understand what a business plan is and its importance, how do you start writing your plan? The best way to begin is to research the various tools and models available for writing a business plan. Easy-to-use models that can help include the Balanced Scorecard, the CANVAS model, and the Hoshin Planning model, all of which are available online. For a more structured approach, there is plenty of free online software specifically designed for writing business plans. Go ahead, write your business plan, and leverage the best out of this tool to manage a successful business.
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