3 Tips on What to Include in Your Business Plan
You have this great business idea and you want to go for it and make your dreams a reality. You have been told by friends and family, financial institutions or government programmes that you should have a business plan. But what really is a business plan used for and how should one write a business plan.
According to Investopedia, a business plan is a written document that describes in detail how a business defines its objectives and how it is to go about achieving its goals. Essentially, your business plan is your roadmap. It enables you to think through all the facets of your business, from the marketing to the operations to the finance, etc. To identify where there could be gaps in your thinking and to address those gaps. To demonstrate to yourself as well as others who have an interest in your business, that you have thought things through and there is a pathway to success.
Below are 3 tips on what to include in your business plan:
Tip #1: Understanding what the reader is looking for – Some may think that all they need to do is just write one generic business plan and they can give that to anyone and everyone; however, that’s not true. Different people will be looking for different things, it is important that you emphasize/highlight those areas in your business plan to make it easy for them to find the information they are looking for. For example, if you are presenting your business plan to a traditional bank to get a loan, they will be looking at the business’s cashflow and how likely it is that you will be able to repay them. If you are presenting your business plan to a government agency to get funding from one of their programmes, they will be looking for the business case and how your business meets the criteria of the specific programme. If your business plan is just for you to map out the direction you want to take the business then it should be focused on your current situation in order for you to identify the gaps and what the steps are that you need to take to achieve your goals and where you will need help along the way. Understanding who the business plan is for is important and tailoring it so that it is easy for them to see how it meets their requirements can be the difference between you getting what your business needs vs not.
Tip #2: Clearly stating what your business proposition is and who is the target customer – What problem is your product or service solving for the customer? Is there already a solution in the market to solve the problem? If so, why is your solution better than the alternative? Answering these questions is important, as it will help you communicate the perceived benefits and assist in making your case about why someone would buy your product/service. Developing a customer profile and then gathering data to establish the product’s/service’s potential market size is critical in order to demonstrate the potential revenue your business idea could generate. Quantifying the market will prove to the reader that your intention is to start this business and not just have a hobby.
Some questions to help you develop your customer profile are:
Who would benefit most from your solution to the problem?
Who would engage with your product/service more?
How would your solution be delivered?
What would they value?
Where would they be located?
Tip #3: Clearly explain how your business idea will make money – This is key to all business plans because at the end of the day it is all about making money. For example, where will your income come from? The price of a product, will it be made on subscription fees, or on advertising space? Demonstrating how you plan to monetise the business idea along with how much you would have to sell to turn a profit and how long it would take to do so are all important elements to communicate to the reader. Therefore, including a realistic and well substantiated income statement (aka profit and loss statement) as well as revenue projections will be vital in determining if the business venture is worth undertaking.
We hope you found this article helpful. If you have any questions or need help with your business plan, please don’t hesitate to contact us at info@joycegrp.com
Thanks for reading.
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