A business plan shows you your business journey from your starting point and how you are going to reach your 3 year objectives.
By planning ahead you'll be able to show yourself and your lender exactly how you are going to make your profits, what products or services you are selling and the profile of the customers who are going to purchase these products.
Your business plan has two main sections - your tactical plans in the first 12 months and your finances.
Even in TV investor shows such as "Dragons Den" they always ask for turnover and profit projections by year for the first 3 years -- then they'll ask you how much each product or service costs to make or develop and the selling price; providing your profit per item sold.
If you can develop these and know how many you need to sell then you are almost there in terms of your plan.
Then it's down to marketing and attracting the right customers in volume for them to know about your business and to actually purchase your products.
That's business in a nutshell but most people skip past these sections and believe that customers will purchase their products just by them offering them for sale.
Your business plan format should follow the following contents that every business plan :
- Executive summary
- External Analysis
- Internal Analysis
- SWOT Analysis
- Your products and services
- Target customer demographics
- Strategies, Objectives, Plans
- Marketing plans
- Management Team and staff
- Finance forecasts
Those are fairly straight forward categories to work on. External analysis is important because generally these are areas you have no influence on at all. Economic trends and trends in your own industry are at the macro level and it's unlikely you'll be able to influence those.
For internal analysis - this is your business where it's only you that can influence how your company behaves.
Once you have this analysis you'll be able to undertake your SWOT (strengths, weaknesses, opportunities and threats) - the first two are from your internal analysis and the last two from your external analysis.
The SWOT is important because it shows where you have highlighted potential gaps in the market place that you'll going to exploit, those products that people want but are perhaps not in the market and how you are going to satisfy those needs.
Then it's up to you. You know how you are better than your competitors and how they behave. You can then develop your own plans on how your business is going to capitalise on the opportunities you have seen.
Put all of this into one document and you have created your own business plan.
