BUSINESS STRATEGY & GROWTH • September 26, 2016
1 minute Read
The standard metaphor for a business plan is that of a road map. It’s an outline of the route you’ll take over the next three to five years, as you travel from one point to another. But it’s not set in stone. A good business plan is a living document, which means it can adapt to the changing business environment.
The challenge, however, is that a successful business plan must be solid enough to keep your business on track and your goals in sight, yet still allow for flexible actions. To help you achieve this dynamic combination, here is a checklist of seven essential components to any business plan.
Executive summary – This introduction to your vision should be the first thing potential investors see. This is where you tell people what your business is and what it will achieve. The most important thing to remember is to be concise and specific.
Industry description – Here you give an overview of the overall industry you’re about to enter. Identify the industry’s needs, problems and outlook. Perhaps the most crucial aspect of this part is outlining any unmet demand that your business would fill.
The competition – Who’s out there, on what scale are they operating, and what might their projected growth be? This is important because the more you know about your competitors, the more you know about your business.
Development – The essential question is: How will your business grow? If it’s a product you are making, what will production look like? How will you get your goods to market? If you’re providing a service, how will you respond to the competition and market yourself?
Operations/management plan – This is where you offer a glimpse under the hood of the car. What are the components that will make your business run? You can include bios and highlight career achievements of the management team, and you’ll certainly want to outline the structure of your business.
Finances – This section needs to contain an outline of financial requirements and an assessment of the capital needed to operate your business. In addition, what many investors want to see is evidence that you have the funds to operate for the first year.
End goal – Three or five years down the line, where do you hope to see your business? Based on everything in your business plan, what are your sales forecasts and when do you plan to start turning a profit? Think of this statement as something like a guide post to keep your sights on throughout both the ups and downs.
There is no such thing as a one-size-fits-all business plan, and yours will look different from all others. However, by going through this list, you can start on your way toward producing a solid, strategic document.
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