Writing a business plan is both an art and a science. A good business plan can mean the difference between getting funded or never getting off the ground.
So what makes a great business plan?
This post will outline six things that every good business plan must have.
- A Clear Description of the idea and vision for the business
- Market Research
- Competitive Analysis
- Detailed Financial Projections
- Marketing Plan
- Background/information about the founder
1. A Clear Description Of The Idea And Vision For The Business.
First impressions are critical. The first part of a good business plan is usually a business overview.
Are you selling widgets or providing a service?
Where will your business be located?
Who buys your product or service?
All of these questions are answered, in brief, in the first business overview section. In later sections, you will dive into the details, but you first have to provide the reader with a general idea of what to expect in the rest of the business plan.
The business overview section sets the tone for the rest of the plan. The last thing you want is for the reader to be confused about the type of business you are running, so you should present the value proposition early and concisely.
2. Market Research For Your Plan
Another essential section for any business plan is the Market Research section. Readers want to know that you have a good understanding of the market you will be operating in.
Is the market shrinking?
Is it growing?
Is it a mature market or an emerging market?
By the time the market research section is complete, the reader should answer all of these questions and be confident that you – the founder, have a good understanding of the market you are entering.
3. Competitive Analysis
Do you know who your competitors are?
This competitive analysis not only lists your competitors but also demonstrates how your business will compete.
Another critical question that readers will want to know is how your prices compare to the competition?
Does your business offer a lower-cost option in the market, or do you have premium products or services?
Being clear on what sets your business apart from your competitors helps your readers have confidence in your ability to profit in the market. This section demonstrates your in-depth knowledge of your customers, competitors, and value proposition.
4. Detailed Financial Projections
Investors or lenders need to see how the Company will make money. The financial projections section outlines all the expected sales, expenses and profits.
When writing this section, it’s essential to provide enough detail so the reader understands how you got the numbers and what assumptions you are making and how reasonable the projections are.
A solid financial plan builds confidence in the overall business plan. If the numbers are “too good to be true,” the reader will not trust the plan, resulting in a denial of the loan or the investment.
This section can be challenging to complete but is worth doing it well. It could mean the difference between a successful plan and one that doesn’t go anywhere.
5. Marketing And Sales Plan
Who is your ideal customer, and how will you reach them? A comprehensive marketing plan is a critical success factor for any business.
In this section, you want to demonstrate what marketing channels you plan to reach your customers. For example, will you be running google advertisements, Facebook and other social media advertising or an old-school print marketing campaign?
How will you “sell” to your audience? Will you have sales staff taking calls?
How much will you spend on your marketing efforts?
What are your key marketing messages?
How will you know if your marketing efforts are successful?
All of this information is critical to launching a successful marketing campaign. Doing this section well impresses lenders and investors and forms a fantastic framework for when you launch your business.
6. Background/Information About The Founder
Here is where you get to brag! In this section, you want to talk about yourself and why you are the right person to start this business?
Who are you?
What do you and your family and friends say about you, and how would you answer their questions?
What are your experiences, education, accomplishments and proven results?
Why do you believe you will succeed?
Sometimes it’s difficult for people to write good things about themselves, but it’s not bragging. It’s building confidence with the reader that you are the perfect person to start this business.
Bringing It All Together
Remember that a business plan is designed to build confidence in the founder and the business idea. Readers of your business plan want to hear your vision and how you plan to make it happen.
The six sections discussed above are crucial, and hopefully, you now have a better idea of what should be included in them.
Happy Planning 😊