Creating a Business Plan Outline: The Essential Guide
January 20, 2020
January 20, 2020
Do you know the hardest part of launching a business? You need to write a sensible business plan. You must have already come across the much repeated Ben Franklin quote, “By failing to prepare, you are preparing to fail.” This is even more applicable to entrepreneurial dreams, where things might not go as planned.
Your business plan is a vital document. Why? Because it can convince a lot of important people about the seriousness of your intentions and the validity of your business idea. These people could be:
- Potential partners or investors
- A big company like Google, if it wants to acquire you in the future!
- A large bank, from which you might need a loan
- Your parents and relatives, to show you are very serious about your dreams
- Yourself, to stay motivated in achieving your goals.
When you are just starting out, a business plan acts as a roadmap. It gives you an opportunity to research market conditions, conduct competitor analysis and find potential pitfalls that you might be unaware of. In short, you gain much better insights into whether your business idea is viable. Science has proven it. Research says that entrepreneurs who take the time to create a business plan are 152% more likely to start their business, while 129% of them are able to move it beyond the start-up phase.
Have we convinced you yet? If yes, then let’s get down to it.
What Should the Business Plan Include?
Among all the business plans we’ve seen (and we’ve seen hundreds), we’ve found that the best ones cover the following:
- The market: You need to convince investors that there is good market demand for your product/service. Remember, most investors want to put money into a market-driven, rather than service or technology-driven, product. Cash flow is king.
- User benefits: How will your product make life better? What problems does it solve for the target customer?
- Investor needs: Show your financial projections, so that investors can be convinced that their investment will reap their rewards. It will help them decide whether they want to fund your venture and how much they are ready to commit.
- Facts and figures: Do your research so that you can give realistic numbers, whether it’s in terms of expected revenue, potential customers or future roadmap. Bigger is not always better here.
- The company’s purpose and vision: Describe management responsibilities, marketing plans, current and future competitors, number of people you will recruit and overview of your business goals.
Business Plan Outline
When you get down to actually writing the plan, a typical business plan usually includes the following elements:
- Executive summary – A snapshot of your company.
- Objectives – What you do and what you aim to achieve
- Products and Services – What is the product or service, and plans for any future product
- Market analysis – Competitors and demand analysis, market size, industry size.
- Marketing and Sales – Which channels do you aim to target, pricing, promotion plans, distribution.
- Financial projections – Revenue models, funding requirements, use of funds.
- Management structure – Board members, management teams, recruitment plans
- Appendix – Supporting documents, such as income statements, cash flow statements and balance sheet.
Wondering how detailed the document should be? It is completely dependent on the amount of time you spend in planning. Consider at least touching on each of these points briefly. At the same time, the trend these days in business plans is “less is more.”
Overall, a holistic document should result from this exercise – one that is adaptable, according to the audience.
Mistakes to avoid:
- Grammatical errors
- Sloppy presentation
- Incomplete plans
- A 1000-page plan
- Too much jargon (this especially applies to all the techies out there)
- Mentioning that you have no risks
- Not mentioning existing competition
- Failing to illustrate your points with good graphics
Creating a business plan is hard work but it really pays. Can’t face it? We hear you. PitchProper’s expert team can work with you to craft, prepare and design a winning business plan. Kerching!
Contact us today to know more.