How to Write an Effective Business Plan?
Introduction
Are you planning to start a new company? Are you looking for some angel investors for your future company? Do you know you can start any company as per your choice and decision? To start a new company you need an idea, money, service or product, system and manpower.
When you will meet your investors then you have to share an effective business plan. In simple words, a business plan is the collection of information related to your future company. In this document, you will have to share information about your plans and how you are going to achieve your targets.
The business plan is extremely helpful and guides us during the initial formation of the company. It will act as a roadmap and eliminates unnecessary elements from your business. So, allow me to share some major points related to how to write an effective business plan.
Make A Good Summary Of Your Business
Just like books contain prologue the same way an effective business plan should contain a summary of your business. This should be the first part of a business plan.
In a nutshell, you are going to describe your idea, mission statement, target audience, product, management structure, marketing etc. A good business summary or proposal will help you in attracting the right kind of investors. Many good investors get an idea about a company just by reading a summary of the business.
Describe Your Target Audience And Market In Detail
In the second part, you will have to describe the market and industry trends. For this, you have to do research. You need to identify your competitors in the market. You have to look at their strength and weakness.
You will have to understand your ideal target audience in detail. Why they behave in a particular manner and where you can found them? Although the opinion of senior members matters but believe in the data
Give Details About Your Management Structure
Having a well-defined management structure and their roles will give more confidence to your proposal. Give in detail what kind of company it will, i.e partnership, joint venture, limited partnership etc.
Use the organizational chart to show your data correctly. In this section, you must include what kind of background and specialization each member of the team possess. It will be better if the resumes of key members will be included.
Write Information About Product, Services And Suppliers
If your company is product-driven then you should share details about your raw materials and suppliers. This is important because investors are well connected with many businesses and if they know someone better then they can guide you.
Share what kind of products or services you intend to offer. How this will be better than competitors? What are the chances this product will be hit in the market? Share research how you came out with this idea, product or services.
Share Your Marketing Plans, Sales And Budget
At the end of the day, investors are always interested in knowing how you are going to make sales. Share with them customer touchpoints and what kind of typical funnel a customer will go through.
Explain to investors how much budget you will need to allocate for marketing and sales activities in a month. What kind of marketing strategies you will follow? Whether you are planning to hire any advertising and communication agency for branding? Your marketing activities should be flexible and could be changed as per the occasion.
Write About Return On Investment (ROI)
At the end of your business plan include a detail report about the return of investment. If you have done your research properly then this shouldn't be a difficult part to prepare. You have to remember every company takes some time to reach breakeven. Some company can take up to three to five years depending upon the size of the company.
Provide detail projections for the next three to five years. If you can include any kind of income statements like cash flow statements, expected capital expenditure, marketing budget then it will be good for the investors. Remember investors love data more than opinions.
Conclusion
In this article, I have shared a way to write an effective business plan. But yes, if you are working on some big project you will have to fill them with concrete data. More data mean you will have better chances to attract the right investors. And if you can attract the right kind of investor, you can think of other important steps. Writing a complete business plan is an art and it takes time to develop. Don’t forget to take the help of a chartered accountant in case of financial matters.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Vikram Brahma
