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If you are planning to start a business, you should have a realistic business plan. It is a document which describes your business, its objectives, strategies, target audience and financial forecast. It also contains your vision and mission for your business. You should have a rock solid business plan if are applying for business loans, grants, attracting external investors, potential partners and also anyone who is interested in buying your business in the future. Above all, when you have a good business plan in place, you will know what your goals are, the growth process of your business and the milestones.

Primary Parts of Business Plan

If you have a good business plan in place, it will do wonders for your business. However, it has to follow certain guidelines. A good business plan has mainly three parts:

  1. Your business concept- Talk about the industry in which your business falls in, define your business structure, and discuss your products/services. You can also describe how you will make your business a success.
  2. Your target market – This is the segment of your business plan where you mention who you are; who and where your audiences are; and why they should they buy your products/services. Describe how you will tackle your competitors, your unique selling proposition and how you wish to position yourself in the competitive market.
  3. Financial section – This is the last segment of your business plan. This part of the document contains your income and cash flow statement along with the balance sheet and break-even analyses. Hire a reputed accountant to help you make this part of your plan.

Key Components of a Business Plan

The primary segments of the business plan can be further divided into key components. They are:

  • Executive summary – This passage is vital because it contains the overview of your business. Potential investors and lenders make their judgment based on this section.
  • Business description – Gives an idea about who you are, what your products/services are, why you chose them and to whom you will sell to.
  • Sales and marketing strategies – Mention the benefits of your product/services that will attract your potential customers, and how you plan to market them in a competitive market when the economy is reviving after a downturn.
  • Your team – Show off your management team and skills to better understand why your business will be a success.
  • Operations – This section tells about the premises of where you want to conduct your business and the facilities of where you will be managing your business.
  • Financial plans – This is nothing but your financial plans. How much capital you need from external sources, the security you offer lenders, how you plan to repay and how soon. Also, mention your source of income and revenue to invest in.

Who Needs a Business Plan?

Anybody planning to start or extend a venture needs to have a good business plan in place. This is because you are putting in a significant amount of money, energy and time and you expect a profit in return.

  • Startups - Corporations were all once a startup. It takes some convincing with investors to put money into their business but it is doable.
  • Established companies - Many established firms also need a solid business plan. That is when they decide to diversify the business, make huge changes in their business operation strategies or want to convince their investors to invest more money. If they plan to sell their business, established firms seek help of reputed business advisors to chart out a plan which will appeal to their potential buyers.

Remember, that it is just not the start-ups, or the cash starved firms that need a business plan. Anyone who wishes to open and operate a business needs to have a full proof business plan.

Flickr image by nmlphotography

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