A business plan is a written document created by a business, usually a startup business, which includes its objectives and goals and how it plans to meet them. The business plan includes marketing, financial, and operational objectives. Sometimes, the business plan also provides for the budget of a business. A budget is a business plan created by accounting specialists or analysts based on income and expenditure. It identifies the available capital, estimates the business’s spending, and helps the business predict its sales revenue.
Business plans for startups are essential because they attract potential investors even before the business has created a proper track record. A business plan is also a great way to motivate managers to align with targets. The business plan should be renewed and reviewed at different stages of the business, even when the business is stable, profitable, and performing well. Sometimes, a new business plan is created for a tricky business to be expanded or moved in a new direction.
Companies that decide not to create a business plan while starting the business fail due to a lack of direction or a proper plan. Even if you think a business planning to run on a tiny scale will survive without having a business plan, you could be wrong. Some new business owners find it hard to understand the requirements of business plans, so here are ways you can create a business plan.
Determine What Format You Want to Follow
There are two formats: a traditional business plan and a lean startup plan. There are no rules for what format type you should follow; ensure it is the correct format for your business to meet your needs. Traditional business plans use a standard structure and are shared. Lean plans are not common, but they also follow the legal structure. A poor business plan summarizes the essential points and the critical elements in the plan.Here is the Format of the Traditional Plan
Executive Summary and Company Description
The first step is to write up the executive summary. It includes a little information about your goals to make your business successful. The company description should contain detailed information about your business’s operations.Organization and Management
Write down the structure of your organization and mention the roles of people who will manage it and how they will do so. Describe the legal structure of your business and what type of corporation it is.
Marketing and Sales
Mention all your marketing strategies and how you will carry them out. This step aims to create a plan about how you will reach out to your customers and how you will attract them to generate sales revenue.
Fund Requests and Financial Projections
It usually means new businesses are looking for financing sources, so they must include this step in their business plan. They should mention why they need the loan and the business’s requirements. Financial projections are vital for convincing your investors and lenders to provide funds. If your business has started its operations and created some financial statements, then this step requires you to include those.
In a lean startup plan, only crucial information is involved, such as partnerships, activities, resources, value propositions, customer relationships, customer segments, channels, cost structure, and revenue streams. This format is used when the business wants to provide a brief and quick summary of its business plan. This format is used by companies with simple operational systems that do not require complicated information. The lean startup plan gives an overview of the value of your business and points out the fundamental facts about your business.
It would help if you also looked at examples of these formats or found templates to understand them better. These details are to help you understand the requirements of a business plan.
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