When negotiation, the first step is to put all your ideas in writing. And once developed and in order you can outline a business plan that, in the end, is nothing more than a detailed summary of the business adventure you want to undertake.
A business plan is an expanded version of the famous r ascent discourse because, among other things, it serves to arouse the interest of potential partners, or that of investors and banks when you need capital for your project. But above all, its greatest utility is that it will serve as a guide to stay focused and realistic with your plans and aspirations.
Elements of a business plan
In the following guide we indicate the elements that must be present in your business plan:
- Executive Summary
- Business Description
- Products and services
- Market analysis
- Marketing plan
- Management and organization
- Financial viability
- Annexes
Executive Summary
The executive summary should be the most solid and compelling element of your business plan. And not only because it is the first part that anyone who consults this document sees, but because it also fulfills a function by itself.
In previous lines we mentioned the raising of capital. Well, your executive summary is in charge of doing the «hard work» to get it. Or put another way, it is the piece of information needed to capture the interest of investors.
In this section you should provide a detailed summary of the business plan. Explain each of the elements of your business plan in a few sentences – business description, products and services, market research, etc. – in a way that piques the reader’s interest and invites them to continue reading. It should be brief, interesting and of a maximum length of two pages.
Although it is the first thing we have explained, the executive summary is curiously the last thing you should write. Your executive summary will top your business plan, but you won’t know what information to include in it until you finish completing the following sections.
Company description
The first thing you should write is a description of your business. This part also has to be quite clear.
Start by writing the name of your company and that of its founders with their professional profile and experience. Include data such as the year and place of the creation of your company, the needs it intends to cover and its main mission. Also describe your products and services, but briefly, without elaborating too much, you will already do that in the next section.
If one of your goals is to get capital from potential investors, you’ll need to explain the stage your company is currently in, the main achievements you’ve made in the past, and those you’re proud of. Accompany this information indicating your future objectives and the plan you intend to carry out to meet them. A good idea is to present them chronologically, either by quarters or by years. Remember that your shareholders, your investors and those you want to attract, want to know how you intend to grow your companyto .
Products and services
List and explain in detail your products and services and those you plan to launch in the future. Anticipate any questions that may be asked by someone who does not know them or who even has no relation to your sector. Answer these questions extensively without leaving any loose ends.
If you’re still developing your idea, describe what stage you’re at and the steps you’re going to take to move forward. Include diagrams, product images, and any visual examples you deem necessary.
Finish this section by explaining the pricing and pricing strategy indicating what the fixed and variable costs will be, the final price of your product or service and the profit margin you expect to obtain for each unit.
Market analysis
This is one of the most extensive sections of any business plan as it is composed of eight parts. In it you must carry out a market study, draw conclusions about it and write a complete analysis on the following points:
- Sector Overview:Analyze the market in which your business will operate (health, wellness, education, etc.) by assessing the current situation of the industry and the changes it may experience in the future. It also analyzes the main market players and their current offer.
- Competitor Analysis:Analyze your top competitors and how you plan to compete with them. Include in this section a complete SWOT analysis that indicates the weaknesses, threats, strengths and opportunities of all your competitors.
- Barriers to Entry:Explains the difficulties a new company might have in entering the market. It could be the costs of starting, material or a specific equipment or the registration of a patent.
- Target audience:Describe what your target audience is like in the sector or market where you want to operate. Indicate their size, demographic characteristics, etc.
- Evaluate your business:based on the above points, evaluate the advantages of your business and if your product or service can meet the needs of your target audience.
Marketing plan
Having a business idea is one thing, and another thing is to sell and get your product to your potential customers. This section is where you have to explain in great detail how you plan to do it.
The starting point is to have a brand. Start by consulting this guide to creating your marc identity that will give you an idea on how to develop yours – from how to choose your most suitable colors and fonts to how to create a good online identity.
With your brand created, the next thing is to explain your marketing and advertising plan with their respective budgets. This includes thecreation of a web page to present and sell your products or services, and all the social channels you need to reach your customers.
If you have successfully launched your product or service, sales will not be long in coming. The reason you should think about all this in advance is because you need to know how to handle any sale that occurs. It explains, therefore, everything necessary (labor, equipment, warehouse, etc.) to sell and ship a product or provide a service.
Management and organization
In this section you should talk about the human team of your company, from the founders and the management team to anyone involved in the operation of your company. The latter group is made up of the Board of Directors, the team of advisors, department directors, middle managers and other members of your workforce.
If some of these people have not yet been hired, it is important to indicate the organizational profile that your business will have when they join on board. A good idea is to include an organizational chart that visually reflects the position and responsibility of each of them.
Financial viability
It is always important to know how you are going to guarantee the financial viability of your company, not only for the good of your business but also for that of your investors.
This section should answer questions such as the following:
- How much capital do you need to start your business?
- How much capital should your investors invest?
- When will you start making a profit?
- What benefit do you expect to make a year from now? And 3 years? And 5 years?
In addition, you must be able to manage the finances of your business by adjusting to your budget and controlling your income and expenses. This is essential to know your level of liquidity and be able to meet your tax obligations.
Annexes
For the final section of your business plan, include any additional information that will help readers get a complete picture of your business. If you have illustrated your business plan with infographics, graphs, statistical data or links, in this section you can include any source or data that supports them.