Hello Readers, Welcome once again to Business with a purpose, today we will be exploring the topic of business plans. If you have attempted to get a loan from a bank or applied for any grant or trying to raise money from investors, you would have encountered the need to have a business plan.

A good business plan communicates what the company is about, how the company operates, how it does and where it is going. If you are a business owner or a part of the top management of a business, it is important to understand the business plan of your organization.

A good business plan communicates what the company is about, how the company operates, how it does and where it is going. Click To Tweet

A business plan is a written description of your business’s future. It is a formal statement of your business goals and how to reach them.   tweet

The components of a business plan are.

1.Executive summary

This is the first thing you see on a business plan, but it’s often written last. This is your 5 minutes elevator pitch. It includes a table of contents, company background, market opportunity, management overviews, competitive advantages, and financial forecasts.

2.Business description and structure

In this section, you explain what your business is offering and why you are in the business. In Business, you are either selling a product or providing a service. If you sell products, describe your manufacturing process, availability of materials, your inventory, and other operational details. If you provide services, describe them and their value proposition to customers. Talk about your strategic partners, administrative issues, intellectual property you may own, expenses, and the legal framework of your company.

3.Market research and strategies

Market research is very key in any business, it will be foolhardy to assume your customer needs. So do your market analysis and define your marketing strategy. How many sales do you want to achieve, when you want to achieve them, how will you position yourself better than your competition, and how will you go about advertising your product. This is very key to getting your products or service know to your customers.

4.Management and personnel

On this section, you talk about your team, provide the biography of your company’s executives and explain how their expertise will help your business reach its objectives. A management team with a lot of experience is a boost to your company profile. As a business generally, investors seek to analyze and evaluate risk Investors need to evaluate risk, A team with lots of experience may lower the supposed risk.

5.Financial documents

Business is all about the numbers. This is the most important part of your business plan to an investor and also to you. It shows you everything you have written about your organizational and marketing plans in numbers. Your financial document should have realistic projections of your profit and loss statements, balance sheets and your cash flow statement for the next three years.

6.Keep your business plans updated.

A business plan is a formal statement of business goals, Just like every day and every year we set new goals for ourselves, so likewise our business.  Keeping business plans updated in real time may seem very difficult, but it’s really ideal. It allows you to act quickly when you need funding or if you need to sell your business and it makes your business plan more useful as a roadmap because it keeps you on top of things at all times.

Have a great weekend

Oluwadara Adekunle

dara@lifegiva.com

If you loved this, check out these other useful tips on business,

Business With A Purpose: Idea Creation

Defining Your Business Model – Business with a Purpose

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