As an entrepreneur, you may have an idea that is ready for a business plan. You have spotted a gap in the market and you have the necessary skills to make it profitable.
No matter how big or small your idea is, a business plan is an effective tool that increases the chances of success. A study by Andrew Burke, Stuart Fraser, Francis J. Greene shows that companies that plan grow 30% faster than those that don’t plan.
In this article, I will highlight the overview of making a business plan that works. I will also point to which stakeholders are interested in your business plan. I will finally share the process of making a business plan.
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What is a business plan?
A business plan is a written document that provides key information about a business and describes how it is going to achieve its goals. It shows the structure of the business operations, finances, and marketing programs.
Business plans are important for internal and external audiences. For example, a business plan helps to source funding to invest in a business or project.
The external audience in this case may be a bank. A business plan is also an important internal document for executives to be on the same page on operations.
This also allows them to track their success and progress towards the desired outcome.
Why should I create a business plan?
A business has different types of audiences, operations demands. So you need a document that is a solid foundation for the business. This will help you make the necessary adjustments on the way to reaching your business goals.
Have a full picture
Starting a business is exciting, but like anything in life, it has its risk and rewards. A business plan gives you an overview picture of your business idea. You need to see if the business idea is workable and if the reward is worth the risk.
A business plan is important for you to see potential challenges and address them before the project starts.
A business plan helps entrepreneurs test out ideas and invest their resources with the least possible risk. This saves you the heartache of investing resources into something that is not worthwhile.
Securing funding and loans
If you approach a bank or credit facility for a business loan, you will be required to share your business plan. This also applies to potential investors in your idea; they need to know what they are getting into. A business plan shows that you have done your research and that you have the needed expertise to succeed in the market.
Your business plan needs to show that the business has the potential to grow and produce a healthy return on investment. After all the investors and banks want to be confident that there is a high chance of getting their money back.
How to make a business plan
1.Set Smart Goals
Set goals that are Specific, Measurable, Attainable, Relevant, Time-Bound. Smart goals help you achieve the desired outcome. Whether it is to grow the business’s return on investment or launch a new product.
2.Data Research & Analysis
Research is essential for any business investment project. It helps calculate the potential risks and opportunities in the market at a given time. Research and analysis give you a road map business to achieve growth.
3.Financial Projections
Your business model will inform your financial projections. Finances are the heart of your business. To truly safeguard your investment, you need to work with a professional to tailor the best financial plan for your business. Expect to have five-year financial projections for an income statement, a balance sheet, cash flow statement.
4.Develop Business Plan
A business plan should be crafted with intent. Who is the audience and stakeholders for this plan? Stakeholders for business plans include directors, investors, project teams, and bankers. This why using templates is not a good idea because they are based on assumptions that may not be relevant to your business or goals.
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Key takeaways
- A business plan should be set on SMART goals.
- Research is essential to your business growth.
- Finances should be done by a financial professional
- A business plan should be crafted with stakeholders in mind.
Making a business plan suitable for your business and market can be challenging. We understand that. We empower you with the tools need to start, grow and lead in the market.
