What you should include in a business plan for your start-up or scale-up
Whether you are looking to start a brand-new business or scale your existing company to the next level of growth and performance, you will need a business plan. This can help you refine your strategy, identify threats and opportunities, and set realistic goals. What’s more, banks and investors will usually ask to see your company’s business plan before they offer you financing.
Planning can be time consuming, but the benefits of a well thought out business plan will always give you a good return on investment.
If you are starting from a blank canvas, you will need to do a little homework. Bring your business to life with these three steps to guide you into executing your business plan.
Five key segments for your business proposition
Craft a business proposition that can elevate your success.
- Company overview
- The industry and opportunity
- Strategy and implementation
- The management team
- The financial plan and forecast
Let’s take a closer look at each of these items.
1. Company overview
Start off with an overview of your company and what makes it different from your competition. Some points you should cover include:
Company and industry. Give your audience an understanding of what your company does. Provide a glimpse into what products and services it offers, who its customers are and why it is uniquely positioned to address a need in the market.
Mission, vision, and values. Ask yourself, “What am I trying to achieve and how will I do it?” Then write a mission statement that tells the reader what you stand for and what you aim to do for your market, investors and employees.
Legal entities and ownership. List who legally owns the business and what name your entity operates under. Also, indicate the type of business you have registered. For example, a private company or a partnership.
2. The industry and opportunity
The next segment of your business plan is where you can talk in more detail about the opportunity you are targeting. Include the strengths of your value proposition.
Give the reader an overview of your industry, who your competitors are, the size of the market, and the gaps you hope to address with your products and service.
If you have insight into any industry trends that will benefit your business, you should highlight them. You should also talk about the structure of the market and your planned relationships with partners such as wholesalers and retailers. Depending on who is reading your business plan, they might want to see a SWOT (strengths, weaknesses, opportunities, threats) analysis.
3. Strategy and implementation
This is where you talk about your aim to compete in your market. Delve into how you’ll position your brand, whether you’ll have a niche offering or not, your pricing model, and how you are different to your competitors. This is also where you would include details on your business model.
Marketing: You should include information on your product positioning and offering, pricing and distribution strategy, and promotional activities.
This is also a good place to talk about how you will put digital marketing channels to work. Your first steps should be to register a domain name and build your website.
The one thing potential clients will do is look for your company website to find out more information. List any promotions or activities you have in mind that will help generate leads and get your name out there.
Sales: You can generate leads from your marketing strategy, but your sales approach is how you seal the deal. One of the most effective ways to convey your sales approach is through a process flowchart.
A sales process flowchart gives you guidance but leaves room for flexibility when you pitch to potential clients.
4. The management team
If you are writing a business plan to impress an external audience, this is one of the most important sections. Lenders, investors and other potential business partners don’t back ideas or products, they back people. Write this section to showcase the strengths of your founders and key team members – their relevant experience, achievements, and the part will they play in the business.
Go into some detail on the daily running of the business and where specific responsibilities lie within your team.
Depending on the size of your business, it might be helpful to include an organisational chart to convey a visual representation of your team. If you plan to expand in the future, include those potential organisational structures as well.
5. The financial plan and forecasts
Your financial plan is one of the most important components of the business plan. This is where you get into the nitty-gritty and the rands-and-cents of your business venture. It requires thorough research and thought. Unless you are a financial person, you will probably want to ask an accountant to help. Essentially, your marketing plan should show how you will support the fulfilment of your financial targets.
You should put together a comprehensive set of financial statements and forecasts. These may include:
- A balance sheet
- An income statement
- Cash flow projections
- Profit and loss projections
- A break-even analysis
- Working capital and start-up cost requirements
- Asset register
Visuals such as pie graphs and bar charts can help bring the numbers to life for discussions with your internal team or with external people such as lenders and investors.
Wrapping up
As a rule of thumb, you should not spend more than one to three pages on any of these sections in your business plan, especially if it is primarily for an audience outside your company. You can use an appendix if you want to include supporting materials such as customer testimonials, marketing collateral, bank statements, financial forecasts, product photos or press clippings.
Another tip: now that you have written your business plan, top it off with an attention-grabbing executive summary and tail it with a killer conclusion. This ensures the reader won’t forget your most important messages. You should also proof-read the business plan carefully to ensure there are no glaring typos or grammatical errors.
Your business plan is a living document. You can refer to your plan to see if you are on track or if you need to change your assumptions. You can also adapt it to different audiences and reshape it as your business evolves. Once you have your plan in writing, you can keep researching, recording ideas, and analysing data with a clear view of where your business started and where you hope to take it in the future.
This article has been adapted from an original piece by Tiffany Servatius
Image by: Background photo created by mindandi - www.freepik.com
