If you have dreams of creating your own startup or new business, a well-crafted business plan is essential to understand the viability of your idea and whether it’s achievable, the profit margins and financial milestones you can expect to hit and when, and where your target audience are so you can reach them more effectively.
This step-by-step guide explains what a business plan is and why you need one, and outlines all the elements your business plan should include in order to be a successful business.
What is a business plan?
A traditional business plan outlines your business strategy by explaining and exploring your startup roadmap, objectives, business goals and milestones you aim to achieve. It’s a document which is applicable for all types of businesses, and it is advised that all small business owners have one to ensure they have a clear idea of what they’re doing and are able to stay on-track.
Why do you need a business plan?
If you’re starting your own business and looking to secure funding from potential investors, a good business plan is essential.
Before starting any official partnerships, investors or lenders will want to see a fully realised business plan to feel confident that the business owner knows what they are doing, understands what they’re selling, who their target customers are, and the market they’re moving into, and have evidence for long-term success through competitor analysis and market analysis reports. Anyone putting money into a new venture wants to know that they will see returns. This is what the business plan should assure them of.
Even if you’re not seeking funding, creating a business plan is still worthwhile as it gives you a template and a clear direction of which to follow when launching your startup.
Key elements to include in your business plan
A business plan is a comprehensive guide to your company, giving a 360-view of your output externally as well as how you’re run internally. It includes a detailed company description from every business angle, making clear what you’re trying to do and how you’re going to achieve it.
Below, we discuss each section of your business plan and what it should include.
Executive summary
The executive summary is a detailed company description which explains your business and its goals. In there, you should include your mission statement detailing your company purpose and why you created the business.
You should also include a short overview of your company and the problem or consumer need you’re trying to address, a description of your products or services, information on your current financial standing, and how you plan to grow.
Organisation structure and management team
Potential investors want to know about the team members involved in your business, as it’s your internal stakeholders who will drive the business forward.
Outline who your management team are, what their experience is, and any plans for new roles once funding is secured.
Market analysis and opportunities
By carrying out market research into the industry you’re trying to launch into, you’ll gather evidence on the validity of your business model and the projected success you could reach with your new product or service.
Understanding the industry also enables you to understand the demographic of your target market which you should include in your business plan. Knowing where your audience is will make it easier for you to find them with your brand.
Products or services you’re selling
Your business plan should include an in-depth explanation of what product or service you’re selling. You should be able to detail why your offering is unique and what customer needs it will be fulfilling, as well as plans for future improvements or further offerings.
In this section you should also lay out your pricing strategy, what you need to start distributing your product or service, and whether you currently own or are progressing towards any patents.
Competitive analysis
Understanding your competitor’s products and their business operations will give you the ability to develop a competitive advantage in the market. You should be looking to differentiate yourself, your brand, or your offering, so you can convince customers over to you.
Having a competitive analysis will enable you to see where the gap in the market is and allow you to create plans to position yourself as the one to fill it.
Marketing and sales strategies
Promoting your business with a marketing strategy is essential as it will enable potential customers to connect with your brand. There are many options available with marketing and sales, so you must ensure you’re maximising your current budget and making sure any investment will be used to its full potential.
You could use social media to develop a brand identity and share your value proposition, create press releases and circulate them to news outlets in your industry, or hold a series of educational webinars. Different activities work better for different products.
Financial plans and analysis
Potential investors want to know that they’ll make back their money and more by injecting cash into your new idea.
In this section, you should include a detailed financial projection, as well as a balance sheet, cash flow statements, and income statements if you already have them. Your financial statements should detail your incomings and outgoings clearly.
Learn how to develop your business idea into a solid plan
If you’re launching a small business or a new product within an existing business, Wrexham University’s 100% online MBA Marketing will set you up for career success.
In this course, you’ll gain a thorough grounding in business principles and will understand what each area of a business does. You’ll be equipped with the ability to carry out a SWOT analysis on a new idea, create detailed financial forecasts, and participate in strategic planning of a new startup or product launch. With a marketing specialism, you’ll understand the importance of a good marketing plan and will learn to identify key opportunities for getting your brand in front of your target audience.
This degree is taught part-time, enabling you to keep working while you study. You will graduate from this course within 24 months, making your career progression closer than you think.
