A business plan is a vital document used during either the startup or growth phase of a business. While there are no official formats for a business plan, there are commonly accepted conventions, particularly for the financial industry. Those conventions recognize vital business planning areas, like the business’ mission and goals, its financial realities, how it will be marketed, and how it will be staffed and operated. Additionally, business plans have a variety of purposes including for seeking financing. Because of the varied uses, business plans can stress various things for different needs.
No matter what form the plan takes or what it’s being used for, there are 3 things every business plan must have.
1. A Business Plan Should Have Financial Projections
No matter how simple or complex, a business plan should contain financial projections. Some of the simpler financials are a startup budget, pricing menu, and sales projection. Business plans should also include an income statement for at least 12 months if not longer. Plans for more complex ventures can include cash flow projections and balance sheets.
2. A Business Plan Should Have a Rigorous Marketing Section
Marketing is what brings customers in the door; thus, a business plan should examine marketing carefully. The marketing section of a business plan should include two elements – identification of who the target customers are and details on how they will be reached. The first section defines who the intended customers are in terms of demographics and other characteristics along with where they are located. The second section details what methods of promotion and advertising will be used to reach them and examines the costs of that advertising.
3. Every Business Plan Should Have a Competitive Analysis
A business plan should contain a competitive analysis because marketplace realities are reflected in what the competition is doing. Competitive analysis uncovers everything from pricing, to what products and services are in demand, to how those offerings are provided. Competitive analysis can also reveal opportunities that exist that were otherwise unnoticed.
No matter where you are in the development of your business, a good business plan is a vital tool, especially if you are seeking financing. If you need assistance with preparing a business plan for seeking start-up capital or financing an expansion, contact Dhanani Funding.
