The Value of a Good Business Plan
All companies need to have a plan but new businesses can particularly benefit from having a clear, well structured business plan from the get go. In this short article we’re going to show you the key components of a sound business plan and why it will benefit your new business.
A good business plan can be very beneficial for a small business for a number of reasons. Whether you’re an existing business or are planning to set up a new business a good business plan is a key predictor of future growth. It can remind your employees what the company mission statement is and it can also convince outside investors that you’re a safe bet when looking at investing in your business.
A business plan is a working document that outlines the goals and direction of your business. It also involves cash flow, sales and marketing along with ways of measuring your progress.
It’s generally accepted that a business plan is made up of 7 key components which include an executive summary, description of the business, market analysis, competition analysis, execution plan, marketing and sales strategy and lastly financial projections.
The executive summary should provide an introductory overview of exactly what your business does. It also mentions the overarching financial statistics of the business.
The business description section is relatively self-explanatory but must include very specifically what you provide to customers and how you differ from similar companies.
The market analysis should sum up what opportunities you see in the marketplace and how you intend to capitalize on them.
By contrast the competition analysis focuses on what your competitors are doing and how you intend to compete with them.
The execution plan section explains exactly how you’re going to implement the work necessary to deliver on this plan. It can include hiring strategies along with sales and revenue forecasts.
The marketing plan describes in detail the channels of marketing that you’re going to focus on and what budget is needed for each. Time frames and Return on Investment (ROI) are good to include here.
When it comes to financial projections you need to try and produce an accurate report of your business activities and report all the finances required to run your business.
A business plan shouldn’t just be put in a drawer and forgotten about; it should be referenced and used often going forward. Keep your business plan at hand, and use it to inform decisions and guide your team in the years ahead.
If you’d like to download a free business plan template click here