A business plan has many functions and serves several purposes, not the least of which is introducing your company to potential investors. As such it should be well organized and answer some pertinent questions. It is also a place to organize your ideas and set up some management guidelines.
That being said, lets review each section of a business plan.
Is your Executive Summary compelling, concise and clear? It must succinctly outline what your business does and who the customers are. It is important to talk about how big the market is and how quickly it is growing. Finally make sure it highlights why you are the best company for the job.
Basics in the Company Analysis. All of the basics should be covered in this section including the date of incorporation or formation, structure, physical location and stage of growth. This is also the place to talk about past successes and again how your company is unique to the market.
Properly identifying the industry, in the Industry Analysis. Market share, growth rate and business trends should be illustrated within the industry analysis. Confirm this data with information from one independent research firm, if not more than one.
Identify your customer segments in the Customer Analysis. You want to cover customer need, decision making, demographics and psychographics in this section.
Is your Competitive Analysis complete? Are you considering both indirect and direct competition? Outline carefully each of their strengths and weaknesses, as well as how you will overcome them. Make sure you talk about your largest competitor and any publicly traded competition as well.
Marketing Plan Basics. This should detail how you will deliver your product and serve your customer base. There are four P’s to remember: Products/Services, Places or locations, Prices, and Promotions.
How will your customers be retained? Do you have strategic partnerships you can leverage? Both of these should also be covered in the marketing plan.
Long term and short term processes belong in the Operations Plan. Are you fully illustrating all of these points? Your short term processes are those activities that are performed on a daily basis and essential to the operation of your company. Think manufacturing, distribution and RD) Long term processes, on the other hand, are milestones you hope to achieve like a new product release, exit strategies and revenue benchmarks.
Management Team section needs all bios for your team and board members. Complete bios are important as well as explanations of any gaps in team positions.
Is the Financial Plan based in reality? Assumptions and projections must come across as realistic if you want investors to take you seriously, especially since this is the section they will focus on the most. Provide charts and prose to give a full picture of the following:
- Sources of revenue
- Pro forma- future revenue streams
- Market share
- Operating margins
- Employee numbers
- Additional funding information
- Exit strategy
The Appendix should contain the proof of everything stated in the rest of the plan. Pertinent documentation such as patents, additional financials, diagrams and schemata should all be contained within.
How does it all look? Believe it or not appearance is important. Is the plan less than 30 pages long? Have you checked the formatting so that it is readable and clear? Include a cover sheet complete with company logo. A business needs to be credible, not flashy, but it should still appear neat and tidy.