The five essential elements you need to include in your business plan
Need to put together a business plan for your new venture? Here are the five elements you need to include.
As an aspiring entrepreneur, you probably want to get your business up and running as quickly as possible. After all, the faster you launch, the quicker you can start making money.
Unfortunately, in a rush to get started, many ambitious individuals forget to create a full business plan.
Writing a business plan might not be the most exciting activity for entrepreneurs, but it is one of the most important. It’s more than just a tool for attracting loans and investors; the right business plan acts as a compass to guide you through each step of building a successful venture.
Here are just some of the essential elements for your business plan.
1) Your mission statement
A mission statement is essentially the “why” behind your company. Every business has a reason for existing that goes beyond the simple desire to make money. Apple wanted to create a new kind of computer company that made technology more accessible. Google wanted to help the world share and find useful information.
Ask yourself what you want to accomplish with your organization. Where would you have to be ten years from now to say you were “successful” in your goals?
Once you have your mission statement, place it in an executive summary at the front of your plan. This summary will give you a clear picture of what your brand is all about and help you easily broadcast it to the world later on.
2) A financial plan
Nowadays, it’s much easier to launch a business with minimal investment. If you’re selling a service, like local SEO or marketing skills, you don’t necessarily need an office to get started. You can work remotely from your laptop or smartphone, choosing the hours that suit you. This makes running your company a lot more affordable.
However, no matter which route you take to bring your business to life, you’re going to need some kind of investment.
Ask yourself how you’re going to find the cash to pull your company up off the ground. This could involve taking out an online business loan, selling shares to investors, or even asking your customers to crowdfund your idea.
Make a plan for the expenses that you’ll need to prepare for. It can include the cost of labor from your employees, supplies, and raw materials. Create tentative projections for how much income you need to generate to stay profitable and keep operations running.
3) Market demand and analysis
How do you know that there’s a need for the product or service that you’re selling? The worst thing you can do as a business owner is to jump straight into building your company, without double-checking that you can make money.
Conducting in-depth market analysis helps you to see whether there are customers out there that will be interested in your brand.
Market analytics will also help you determine where you stand in terms of competition. If there is a demand for whatever you’re selling, there’s a good chance that another company is already offering the same thing to their customers.
A little bit of competition is excellent, but too much could mean that you have to invest more into your business than you currently have. Analyzing your competitors will also help you find a unique point of differentiation to set your company apart from the crowd.
4) Execution and operations
The execution and operations section of your business plan helps you figure out who will be responsible for what in your company.
Sometimes, you’ll find that you don’t have the right skills or knowledge to do everything on your own as a business owner. This means reaching out to professionals who can handle specific tasks for you.
Although many entrepreneurs start as a jack of all trades, managing multiple parts of their business, they eventually discover that it’s much more efficient to outsource for some help. You might decide to hire a professional accountant to manage your books, for instance, or reach out to a marketing team for assistance getting your company the attention it needs.
Even in small businesses, it’s helpful to have a list of staff members on-hand, complete with descriptions of what everyone does.
5) Disaster recovery
Finally, in an ideal world, your business will run smoothly without any problems or issues. Unfortunately, most entrepreneurs will fall victim to some issues on the road to success. A disaster recovery plan helps you implement reliable measures to protect yourself and your company if something does go wrong.
Asking yourself what kind of issues your company might face makes it much easier to prepare yourself for anything.
Your recovery plan might include a cloud storage system for backups of all of your essential files or tips on how employees can work from home if they cannot visit the office during a disaster.
Having an action plan will help you get your business up and running quickly should something go wrong. How fast you respond to a crisis is essential; according to FEMA, 90% of small businesses that don’t reopen within five days will shut down within a year.
The more comprehensive your plan, the better protected you’ll be. Don’t forget to create a list of who will be responsible for what in your team when creating your disaster recovery plan.
Don’t neglect your business plan
A business plan is one of the most powerful tools you can have as an entrepreneur. It maps out the exact direction you’re going in with your business. This means that you can make more informed decisions that drive you towards your goals.
At the same time, your business plan protects you from eventual issues and shows potential investors that you’re well prepared.
With a well-structured business plan, you can show anyone interested in your company how you plan to attract customers, beat the competition, and protect yourself from unpredictable events.
Need help to write your business plan? Find out how our Business Plan Masterclass guides you through the process and even gives you a template to follow.
Michelle Laurey works as a VA for small businesses. She loves talking business and productivity, and share her experience with others. Talk to her on Twitter.
