How to make a business plan

A business plan is a written document that outlines a company's objectives, strategies, market analysis, financial projections, and operational plans. The purpose of a business plan is to provide a clear roadmap for the company's future and to serve as a tool for communicating the company's vision and goals to investors, employees, and other stakeholders.?A well-written business plan can help entrepreneurs secure funding from investors, obtain loans from banks, and attract potential partners or collaborators. It can also be used as a management tool to guide the company's operations and decision-making processes. Furthermore, a business plan helps entrepreneurs evaluate the feasibility of their business idea, identify potential risks and challenges, and develop contingency plans to address them. It also provides a framework for measuring the company's performance and progress towards achieving its goals. Overall, a business plan is a critical document that helps entrepreneurs navigate the complex landscape of starting and running a successful business. It provides a roadmap for the company's future and a tool for communicating its vision and goals to stakeholders.

Any business plan has a dual function:

1.??????Internal: ?Providing management and staff with a clear map, complete with signposts and milestones against which progress can be monitored and evaluated.?

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2.??????External: Presenting the investment case to an outsider. This key function provides the focus for this note. Essentially, business plans are sales documents. What they are selling is your business idea, your product or service and, above all, you and your track record. But in selling these things you are also competing. Figures from the venture capital industry indicate that roughly 85% of all business plans are rejected almost at once, 15% are given serious consideration but only 5% reach the negotiating stage. Your target is that final 5%.

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As with any sale, you should start by asking yourself:

Who is my target customer?

Banker, venture capitalist, private investor or a prospective family backer?

What are my customers’ needs?

Return on investment and eventual exit option for a venture capitalist, security for a banker, etc?

What exactly am I selling?

Equity, a business opportunity, a license?

What do I want from my customer?

Equity, loan (secured or unsecured), expertise or advice?

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The framework for a business plan typically includes the following sections:

1.??????Executive Summary: This is a brief overview of the business plan, highlighting the company's mission, objectives, and key strategies.

2.??????Company Description or brief history: This section provides a more detailed description of the company, including its history, management team, legal structure, products or services, and target market.

3.??????Product or Service Line: This section provides a more detailed description of the company's products or services, including features, benefits, and unique selling points.

4.??????Market Analysis: This section provides an analysis of the industry and market in which the company operates, including market size, growth potential, and competition.

5.??????Marketing and Sales Strategy: This section outlines the company's plan for reaching its target market, including pricing, distribution, and promotion strategies.?

6.??????Management and Operations: This section describes the company's organizational structure, management team, and operational plan, including manufacturing or production processes, staffing needs, and key performance indicators.

7.??????Financial Projections: This section includes financial statements, such as income statements, balance sheets, and cash flow statements, as well as projections for future revenue, expenses, and profits.

8.??????Funding Request: If the company is seeking funding, this section outlines the amount of funding needed, how it will be used, and the expected return on investment.

9.??????Risks and Challenges: This section identifies potential risks and challenges that the company may face and outlines strategies for mitigating them.

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specific framework for a business plan may vary depending on the industry,

company size, and target audience. However, these sections provide a solid

foundation for developing a comprehensive business plan.

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Your business plan is, first and foremost, a sales tool. It is essential that it looks good and reads well. Professional presentation is critical. Beyond this you should observe the following guidelines:

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1. The text should be cogent, concise and clearly laid out.

2. Focus on key issues, avoid extraneous details. Knowing what to leave out is just as important as knowing what to include.

3. State clearly what makes your product different or better and exactly where you intend focussing. Trying to do too much is indicative of a poor understanding of what you could do best.

4. Formulate objectives that are unambiguous, consistent, credible and compatible with industry experience.

5. Show that you really understand how your target market operates, what your customers want, how you will distinctively meet these needs and on what basis you will compete successfully.

6. Display a clear understanding of your investor’s needs and interests.

7. Avoid complete infatuation with your product and how it will be produced.

8. Demonstrate that the team you have assembled has the balance and the track record to exploit the market opportunity as well as the determination to stick with the venture.

9. Openly address risks and problems, explaining how you intend dealing with them.

10. Ensure that the plan is intelligible and complete in itself, having no need of additional data or explanation. Think also about how you could most compellingly sell your plan in a ten minute oral presentation.

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Finally, never lose sight of your audience. Remember that there may not be a single, homogeneous audience. Tailor your plan to meet the needs of your different audiences. Write your plan for a specific audience, not for yourself.