The first step in taking your business from start-up to successful enterprise is creating a good business plan. In today’s post we discuss 5 very vital elements a good business plan should have for success.
A good business plan is key to startup success. It will take you from the initial stages of your business right through to becoming a well-established company. A business plan allows you to take a step back and look at the picture as a whole before getting knee-deep in the everyday operations. A good business plan defines your destination so you know where you’re headed every step of the way.
Unfortunately, many entrepreneurs attempt to draw a business plan up but end up failing miserably at the task. It doesn’t have to be this way though because if you break a business plan down then writing one certainly is possible – and very doable too!
The following 5 Key elements if present in your business plan will help you to turn your dreams into reality by giving you that all-important structure and template to establish the foundations for every aspect of the startup process.
1. Executive summary
An Executive Summary is an ingredient that distinguishes a good business plan from a great one. If you’ve never read a business plan before, then you might be wondering what the point of it is.
Business plans are big, long documents that outline the goals and strategies of your company and their expected organization into the future. An executive summary is the last opportunity you will have to make a solid first impression on investors, banks or employees.
Your executive summary should give the reader an overview of a company’s background, its opportunities in the market and how it solves the problem it intends to. it needs to be engaging, provide a sense of the market, and convincingly pitch the benefits of your product or service while meeting all the requirements of the reader most likely an investor.
2. Business description and processes
Instead of just writing a waffle-wrap copy for your business and calling it a day, consider ways to provide information to potential investors that will help them better understand your business.
Without a firm grasp on how your proposed business will function and the organization that will support it, you won’t be able to convince your target reader. You might also run into roadblocks when the time to start building out your business plan. You want to know where to start, how to grow and how to handle any obstacles that might arise.
Extrapolate on your Mission and Vision and put forward good reasons why you’re providing goods or services. Also describe your processes for providing services or manufacturing goods. And what sets your business apart from the rest. Make a good case for your business from an organizational standpoint – you want to come across as someone who has done their homework and is ready to hit the ground running.
3. Market research and strategies
A thorough understanding of the market is required to provide the basis of any strategic plans. Your business plan should outline the organized process for analyzing and adjusting to market conditions while being proactive with preparations for future changes and emerging opportunities.It must include the research, SWOT analysis, marketing strategy and review of finances, time management and financial forecasts that would help your business gain the competitive advantage in the target market.
4. Human Resources and Business Management
There are many aspects to a successful business, but one of the most important is your HR and business management plan. It is important you let your reader know you’ve hired the right people to help you keep the business running smoothly. Knowledgeable but creative people can also prevent disastrous situations which arise in companies which means less risk for the investor – making it one of the critical factors investors look at when evaluating prospecting business.
Furthermore, it is very important to have a solid health and safety plan in place. It is not enough to simply hire staff and give them responsibilities.A good business plan should contain a Workplace Health and Safety Management plan. Everything from fire safety and property damage, right through to employee retention and creating a culture that promotes a positive work experience. Remember, no one likes a negligent business owner. Certainly, no one wants to be associated with a business with a bad reputation, heavy fines and liabilities due to poor workplace health and safety reasons. A good system for management of WHS can help employers meet compliance, allow employees to understand their rights, and protect both the employer and employee against large fines. Include this in your business plan and you’re sure to impress investors.
5. Financial management
In order to successfully plan your business, the key financial components are critical to its success – your estimated sales revenue, total costs for starting, operation and maintenance; estimated number of employees that will be needed; a cut-off date to ensure business failure or survival; and a method of raising capital if need be.
Before you begin writing a business plan for your new venture, there is one element you must consider: financial projections. The key word here is projections. As a business owner or entrepreneur, you will never know exactly how things will turn out. The fact of the matter is, no one knows exactly how the economy will end up performing. Your best bet is to put together a business plan that takes into consideration various possibilities and gives you the best chance at either avoiding disaster or taking advantage of it. Without this, it is hard to know how much money you can afford, what challenges your business will face and how best to solve them.