Business Plan Essentials
What is a business plan, and why do we need one?
A business plan outlines a business’s goals and strategies for achieving them. It includes the most important information potential investors need before assessing its viability.
Different textbooks, blogs will detail different information you need to include. Key elements include:
- Market Research: Understanding the target market and competition
- Financial Projections: Budgets, cash flow forecasts, and break-even analysis
- Operational Details: Staffing plans, production processes, and legal requirements
- Marketing Strategy: Plans for promoting the business and attracting customers
- SWOT Analysis: Identifying strengths, weaknesses, opportunities, and threats
- Contingency Plan: Strategies for addressing unexpected challenges
Business plans typically span 5 to 6 pages, or if it drags longer than that, with an executive summary highlighting key points for quick review by stakeholders.
| Aspect | Description |
|---|---|
| The Business | – Name, address of the proposed business (for new businesses) – Cost of premises, start-up costs etc – Details of the owner, past business experience – Type of organization (ie. sole trader or partnership) – Goals, objectives of the proposed business or project |
| The Product | – Details of goods and/or services being offered – Show why consumers will pay for goods/ services – Equipment, production processes – Suppliers, raw materials, costs of production |
| The Market | – Key trends, growth potential – Expected no. of customers or forecast level of sales – Market type, ie. customer profile – Expected growth of the market in the foreseeable future – Competitor analysis, market share, SWOT |
| The Finance | – Financing/ funding source – Break-even analysis – Security (financial guarantees) in case of default on loans – Cash flow forecast and plans in case of cash flow problems – A detailed financial forecast, including P&L/ balance sheet/ rate of return for investors |
| The Personnel | – Number and job roles of the workers – Organizational structure of HR – Remuneration |
| The Marketing | – Market research, test marketing – Distribution plan (channels, mediums of sales) – Promotional mix used to target customers – USP |
Read here for more on the Introduction to Business Management