Creating a sound business plan is not just for Silicon Valley start-ups
Preparing a proper business plan is not the top priority of most new business owners- especially small ventures. Many are so excited to jump into the business that they overlook the strategic importance of a business plan as a first step.
Why write a business plan at all?
Some may think- I already know what my business will be, why do I need a plan? But regardless of your internal certainty, getting your thoughts on paper and creating a business plan has several benefits:
Evaluate your business ideas.
A business plan can make an idea more tangible, helping you see if it’s truly viable. By starting with an objective self-evaluation, you get a much clearer picture.
Plan for your next phase.
Whether your goal is to start a new business or scale an existing business to the next level, a business plan can help you understand what needs to happen and identify gaps to address.
Scope the necessary work
Without a concrete plan, cost overruns and delays are all but certain. A business plan can help you see the full scope of work to be done and adjust your investment of time and money accordingly.
Raise funds
Securing funding for your business, whether from venture capital or a bank, is one of the most common reasons to create a business plan. Banks will not give you a loan without it.
What should a business plan contain?
- Executive Summary
The first section should be a concise overview of your business. Your goal is to draw readers in so they want to learn more about your company.
Though this section appears first, consider writing it last, after you have worked out the details of your plan and can summarize your thoughts succinctly and accurately. The executive summary should include:
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- Your business name and location
- Products and/or services offered
- Mission and vision statements
- Company description
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- This high-level view of your business should explain who you are, how you operate and what your goals are. The company description should feature:
- The legal structure of your business (corporation, sole proprietorship, etc.)
- A brief history, the nature of your business, and the needs or demands you plan to supply
- An overview of your products/services, customers, and suppliers
- A summary of company growth, including financial or market highlights
- Outline of your short and long-term business goals, and how you plan to make a profit
- Products and services
Clearly describe what you’re selling, with a focus on customer benefits.
Articulate your unique selling point. How does it benefit your customers and what makes your offering different?
- Marketing, sales and competition
Your goal in this section is to describe how you will attract and retain customers. This is the heart and soul of every business. The market analysis should include:
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- Outline of targeted customer segments, including size and demographics of each group
- A detailed evaluation of your competitors, highlighting their strengths and weaknesses.
- The promotional plan
An explanation of how you will promote your business to customers and enter the market
- Organization and management
Tell your reader how your company will be structured and who will run it.
Describe the hierarchical structure of the business. An organizational chart can also be included.
Poor management has been attributed as one of the main reasons for small business failure. You want to make sure you avoid this.
- Funding request
This is usually one of the most pragmatic reasons for having a business strategy. If you are asking for funding, this is where you will outline your funding requirements.
Your goal is to clearly explain how much funding will be needed over the next few years and how the funds will be used. The more detailed, the better.
- Financial projections
Supplement your funding request with financial projections. Your goal is to demonstrate that your business is stable and will be a financial success.
If your business is already established, include income statements, balance sheets, and cash flow statements for the last two years.
Develop your business plan now
Most entrepreneurs and start-ups tend to put off creating their business plans, until they have no choice. Windmill, FACE, and Business Development Bank of Canada- BDC all offer loans to immigrant entrepreneurs and small businesses.
Your business plan is the first stage in the application process.
The power of the written word cannot be underestimated. Transcribe your thoughts, ideas, and strategies into a sound business plan. You can get started right away, and prepare your business plan now, using this template– or this.
Show the world, starting with yourself that your business exists beyond your mere imagination.
References:
NFIB
SBA
