Planning ahead is always better than winging it.
When it comes to businesses, preparing an extensive business plan is always worth it.
Profits, sales, management, marketing- everything becomes seamless when a plan is at hand.
In this article, we discuss the key elements that you must incorporate into your business plan.
6 Key Elements of a business plan
As a business grows bigger, the tasks at hand might become more overwhelming.
Let’s take a look at the primary elements of a business plan.
1. Market and trends research
No matter how good your business idea is, the most vital aspect before launching any company is minutely researching the market it will be a part of.
Knowing the market for your product and how well your product will perform is one of the most important aspects to consider before creating a business plan.
Thoroughly researching market trends and the average income of the target buyer to understand if they will be able to afford your product is vital.
Before launching your product to the market, it is crucial to understand how others with similar ideas like yours have fared and if there is anything you can improve upon.
It is important to outline every piece of information that either you or your team has uncovered and analyze its impact on your business.
2. Competitive analysis
If you want your business to thrive, it is important to pit it against your most successful competitors.
An effectively structured business plan will show a comparison between your business and your competitors, both direct and indirect.
To succeed in your venture, it is important that you minutely observe their strengths and weaknesses and understand where you can improve to stay ahead in business.
By analyzing your competitors’ performance over the years, you will be able to understand if your business has the strength to jump right into the market.
This is where making an analysis of your competitors will help you determine several things about your company before you introduce your company to the market.
3. Proposal templates
A business plan needs to be proposed to potential investors and this proposal generally includes an introduction about the services being provided, and a problem and solution slides.
To make your business proposal look more effective and genuine, including an estimated budget might be a good idea.
Besides this, case studies of customer success stories and the guarantees that your company gives to its customers can also be included
The best way to make such a business proposal is by making a presentation. However, designing a presentation can be painstakingly difficult and giving the same effort to something else might reap better results.
Hence, free proposal templates are a great way to save time. These templates already have everything ready, including the design and the structure of the information. You simply need to select the proposal template that looks the most appealing to you and edit a little to create an excellent business proposal.
4. A SWOT analysis
A SWOT analysis means identifying and understanding the strengths, weaknesses, opportunities and threats that might be or already are a part of your business journey. This needs to be done minutely, with a very keen eye towards your competitors.
Uncovering the strengths of your company will open your eyes to the several positive factors in your business and will improve your outlook on it. At the same time, having a thorough knowledge of your weaknesses will provide you with clarity regarding the aspects you will need to improve upon.
While strengths and weaknesses are internal factors, opportunities and threats are both external factors. Opportunities will determine the areas where your business has the potential to grow while threats are the barriers that exist beyond your control.
For example, correctly analyzing your business market will reveal if another business in your niche has already built a barrage of loyal customers and you will have to find a way around this.
5. Financial plan
Business and finances go hand in hand, one cannot do without the other. If your company seeks funding from investors, creating a solid financial plan is of the utmost importance. Solicitors understand your business’s viability for investments and effectively identify its future worth.
A company’s financial plan includes a reflection of the financial forecast of your company, cash flow and income statements and expenditures. An effective financial plan minutely documents the history of your company’s expenditures and its financial trends to better understand the potential it has in the market.
Using graphs and charts to explain the financial plan is an excellent method to increase the effectiveness and the interest of investors. To sum it up, a financial plan is used to develop a company’s budgets, expenditures, and future decisions.
6. Executive summary
The executive summary, as the name suggests, is an overview of your business and the elements that you have implemented in it. It has been included as the very final point because often, it is easier to write a summary of your business after you have taken all the other details into consideration.
For the perfect executive summary, the mission statement of the business should hold prime importance. The summary should effectively outline why you began your business in the first place, the aims and goals of your company, and your plans to achieve them.
The mission statement should thus ideally outline the 5 W’s of your business, namely- Why, Who, What, Where, and When. The mission statement that your company comes up with should guide the goals and actions of everyone participating in it.
Whatever goals that a company might wish to achieve become a lot more accessible because they provide guidance in the right direction. However, a business plan can always be altered.
A monthly review of the business plan can be implemented to understand its effectiveness and how it can be improved. The business plan is supposed to alter with the change in business because it is supposed to cater to the several minute changes brought about.