A business plan is an essential document, if you really want to attract funding for your business or business idea.
A well-written business plan has different sections including the two most important, in my opinion, the Executive summary and the financial projections/summary.
A good business plan is what connects you and your business to the investment needed for growth.
The business plan must have the following sections
The executive summary is a shortened version of your full-length business plan. It must contain pieces of all the vital sections the full business plan. It summarizes the entire document to readers in a page or two. Usually less than 5 pages. It contains the problem definition, solution to the problem, market size, revenue streams, competition, marketing and sales strategy, customer retention strategy, management team and the capital required
The promoters, shareholders, board, and advisors must be clearly shown with details. It’s important to let investors know the people in and behind the company. You must also include the products and services, the long-term aims of the company, its objectives and importantly SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis of the business.
Your market analysis section must show your target market, the total market valuation, and your targeted share of the market. It must also indicate market trends and anticipated trends, competition and profile of major competitors, your competitive advantage and benefits you offer to clients.
The business plan must clearly indicate its revenue model and income sources, marketing strategy, pricing, advertising and promotion, and sales strategy.
Research & Developments
R&Ds are not common with many smaller businesses, but it’s very important if you want to remain innovative and competitive. Show how you would develop and improve products and services, and how you will use this to your advantage.
Staffing and Operations
Outline your company’s organizational structure, and identify the management team by including an organizational structure with descriptions of departments and key employees. An operational plan is very important. You must show how business operations will be carried out. Training programs and staff development plans should be included in this section.
Investors are very much interested in this section of your business plan. This section should be developed with a professional accountant after you have completed a market analysis and set your organizational goals. Important financial statements that should be part of this section are
- Historical financial information: This includes income statements, balance sheets and cash flow statements for the past three to five years
- Projected financial information: Forecasted income statements, balance sheets, and capital expenditure budgets for the next five years
- A brief analysis of your financial data, featuring a ratio and trend analysis for all financial statements.
Outline the risks that your business faces or will face in the future and what measures you have put in place to mitigate the occurrence or effects of these risks. A tabulated presentation is preferable here.
This is the section where you state in clear terms the amount of funding required for your business. It must also show what the funds will be used for, why those spending and the expected return on investment. It must also state how investors or lenders will recoup their money. A repayment schedule or dividend plan will be a good guide.