Thinking of becoming an entrepreneur? Great idea, there are important things you should know about small business plans before finalizing on what business to kickstart.
To properly address the focus of this article, it is good you know what a business plan is, the purpose of small business plans, its importance, and how to create a small business plan.
After reading through this article, you will be able to come up with a proper and an active business plan because you would have been able to utilize the necessary information required for writing a small business plan.
What Is A Business Plan?
A business plan can be described as a written document that gives a detailed summary of all that your business is about. It tells of your products and services, your targeted market, goals of your business, and the approach that you intend to employ to achieve the set goals.
It is an important plan that every intending entrepreneur must have before setting up a business. Your business plan shoulders the other plans which are the financial and marketing plans.
Your small business plan can be referred to as the map that guides you on the business journey from the establishment phase all through each growth stage.
Reasons For a Business Plan
There are several reasons for having a small business plan which may vary from business to business. It is determined by the type of venture you intend to embark on, how you intend to startups, and also make use of the business plan. Yet there is a similar and peculiar purpose of a business plan for all businesses.
Here are some of the common ground all businesses share on the purpose of a business plan.
For Financial Support
If you are planning to apply for a loan from a financial institution, an investor, or business partners that you will be running the business together in the future, you cannot do without having a business plan. With a business plan, an investor, future business partner, or a bank can easily understand what they are going into and things that they stand to benefit when they choose to be a part of the progress of your venture.
Acts As a Guide In Decision Making
A small business plan helps you to know the point you have reached, where you intend to be, and the mapped out strategies to get there. The financial aspect directs you on how to manage your cash flow periodically.
Acts An Information Bank
A small business plan presents to you the necessary information about the business strategy, culture to your staff and managers in the long run.
There are different types of the business plan, the type of business you venture into will determine the one you will employ. The various business plans include strategic plans, startups plans, internal planning documents, operations plans, and business plans that focus on growth.
All these plans have different objectives yet can be categorized under two major bodies. We have a simplified business plan is also known as a one-page or lean business plan and the traditional business plan also referred to as the structured or formal business plan.
The simplified business plan can be referred to as a brief or streamlined business plan that can be used as a start-up for a traditional business plan. You will still require certain information about your business that can help you come up with a detailed and useful business plan.
In writing your one-page business plan, the following questions will guide you.
Vision: What products are you offering to the public? How do you intend your venture to look like in the nearest future of say two, five, or ten years?
Mission: Why did you decide to come up with the products or services? What do I intend to achieve with them?
Objectives: Are your highlighted goals specific, measurable, achievable, realistic, and timely? How do you know when you are making success or how do you measure success?
Strategies: What are the approaches that you intend to employ in achieving your set goals? What makes you different from your competitors, how do you break through to get your targeted market?
Capital: How much do you require starting up the business and how do you intend to raise the capital?
Expenses: How much expenses have you projected for the business within a stated period like one or two years of the life of the business.
Expected income: How much do you envisage as your monthly income for a specific period after start-up based on your targeted market.
Action plan: What steps do you need to take presently to achieve the projected future of the business and what are the approaches to get there.
Having thoroughly answered these questions, you will have in your hand a business plan to start up with though you still have more important things you should know about small business plans that I will still be highlighting under the formal type of business plan.
A formal business plan that is also referred to as a traditional business plan is one that requires a lot of research and takes much time to be completed. Unlike the lean type of business plan, It gives well-detailed information about the structure of the company
In writing the traditional business plan, the following must be included:
This should contain the most essential information about the business because it may be the only page that will be used as the ground for making decisions.
This should contain the vision and mission, the location, size of the company, and what the company does currently.
Products: What does the company deal in? Detailed information about the product or service of the company should be provided along with the value clients or customers will get for their money.
Market Analysis: A summary of the market that you intend to trade your products and services along with a detailed summary of your targeted customers
Marketing Approach: This aspect talk about how you intend to introduce your products to the market, your promotion style, and your product or service price
Management Summary: Here you give information about the structure of your company, those involved in managing it, and the approach used to manage it.
Financial Analysis: This shows how the business is being currently financed, the cost of the ongoing operations, and what will be required in the nearest future.
Having read through the important things you should know about a small business plan, making a decision, and carrying out the necessary actions should be the next step.