A business plan is a written description of the future of your company. Often they used by entrepreneurs seeking to communicate his vision to potential investors, or companies that are trying to attract key employees, suppliers or simply to understand how to better manage your business.
In short, a business plan conveys its objectives, strategies to be used to launch the market, potential problems that may affect you and how to solve them, the organizational structure of the business (including titles and responsibilities) and, finally, the amount of capital needed to finance it and keep it going.
There are three main parts to a business plan
The first is the concept of business, where the industry to which it belongs is specified, the structure of the company, its products or services, and how it will get to be a success.
The second is the market section, which describes and analyzes potential customers: who they are and where they are, etc. Here also, it described the competition and how you will position your firm to gain an advantage.
Finally, the financial section contains the income statement and cash flow, balance sheet and other financial indicators. This part may require the help of an accountant and a good software program.
These three sections can be broken down into seven key components
1. Executive Summary
2. Business Overview
3. Market Strategies
4. Competitive Analysis
5. Design and development of the plan
6. Operations and Management Plan
7. Financial factors
In addition to these sections, a business plan must also have a title, a title page and a table of contents.
What is the length of a business plan?
It depends on the company and the reason why you are using. A useful business plan can be of any length, from a doodle on the back of an envelope to a document of over 100 pages. But normal is 15 to 20 pages.
Much will depend on the nature of your business. If it’s a simple concept, you will be able to express it in a nutshell. On the other hand, if you are proposing a new kind of business or a new industry, may require an explanation largest.
The purpose of your plan will also determine its length. If you want to use your plan to capture a significant amount of funding you will need space to explain and convince your potential investors. If you’re only going to use the plan for internal purposes, a much-abbreviated version is correct.
Who needs a business plan?
The only person who does not need it is one that is thinking of starting a business. But anyone starting a new business and expect to make a profit from it, time to develop some kind of plan should be taken.
Startups. The classical writer of a business plan is an entrepreneur looking for funds to start your new business.
Most books on business planning seem to be directed to the owners of startups. However, it is a mistake to think that only startups need business plans. The business plan may find useful during all stages of the existence of your business, either because they are looking for financing or trying to figure out which product should invest more capital.
Established businesses for help. Many business plans are written by and for businesses that have gone far beyond the stage of initiation. These middle-stage companies can draft plans to find financing and help its growth and expansion as new companies do, although the amounts may be seeking larger and more willing investors. Or it can be a valuable tool used to convey the mission and the prospects for the company to customers, suppliers or others.
When should you update your business plan?
1. When you are about to begin a new financial period. You can update your plan annually, quarterly or even monthly if your industry is changing rapidly.
2. When you need funding or additional funding. Lenders and other financial needs an update to plan funding decisions.
3. When there has been a significant change in the market: changes in customer tastes, trends etc.
4. If your company develops or is about to develop a new product, technology, service or skill. If your business has changed a lot since you wrote the plan for the first time, it’s time to do an update.
5. When there has been a change in management. The new managers should get fresh information about your business and your goals.
6. If your company has crossed a threshold. If you reach a certain number of benefits or employees.
7. If your plan does not reflect the reality of your business. If your plan seems irrelevant, do it.