When you are planning to start your own business, you have to make sure that you have a proper plan that will guide you when you are starting your business and will also be your business future guide.
You therefore have to have properly structured components of a business plan. The plan will look into several things and will include things like
- Marketing strategies
- Products and services
- Management team
- Future plans
These are just but a few things that should be included in the components. Below are 10 essential business plan components
You have to have a budget of what it will cost to start up the business. Break it down into sections so that you can have clear figures on how much will be spent where, for example show how much will be spent to buy the first stock, how much will be spent of transport, how much will be spent on rent and many others. Before you work on your budget, you have to make sure that you conduct research on costs so that you can have accurate estimates.
2. Business Description
Write a brief description of what your business will be dealing with, indicate which industry you will be operating in and also highlight the important areas that you will be focusing on. You have to be as specific as possible.
3. Mission Statement
This is where you indicate your mission on why you are starting the business and the objective; show what you aim at achieving through your operation in that industry. Your words should be attractive to encourage people to come for your products and services. Highlight your strengths and reasons why people should opt for your products and services.
4. Team Bio
Write brief bio about owners, managers and investors in the company. Show their positions and contacts. You can have brief history about places they have worked and their previous achievements.
5. Daily Operations
Indicate how day- to- day activities will be conducted, show the manager in charge and also have a budget that will be followed if you will be buying operation materials daily, depending on the type of work you will be doing. Name the main suppliers and vendors that you will be working with, and anywhere else where you will be purchasing your products. You also need to have a worked out and agreed payment terms and conditions. These should be agreed between the company and the suppliers.
6. Marketing strategy
Show how you intend to market your product so that you can reach your target market. For the first few months, you may need to have sales people who will be walking door to door with your products, if this is the marketing strategy you will use, you have to have a budget for it. Choose the best marketing strategy that will benefit your business. You can even opt to use two or more strategies at the same time, so that you can connect with your target market. It is important to know who you are targeting with your product so that you can effectively identify the best marketing strategies that will reach them.
7. Three Year Plan
Work out a simple spread sheet that will show the money expected out and into the business. Work out a three year plan of your expected expenditure and your income. Anything more than three years will be a wild guess and will probably not be accurate because of changing cost of doing business caused by many factors including inflation.
8. About the Product/Service
Give a brief description of your products and services. Show why they are special compared to what is currently available in the market.
9. Analyze Your Competitors
Talk about what your competitors have to offer and what you have to offer that beats your competitor. If there is a challenge that your competitors face, talk about it and show how you are handling the challenge.
10. Mode of Business
Which mode of business are you going for, are you going for sole proprietorship, or partnership or looking for investors. If you are into partnership business, have their names written down and their positions in the company. If you are going to be working with investors, indicate what they are bringing into the business.
Pushing Your Business Further
Once you have the components of a business plan written down, it is time to put together all the things you will need before you start doing business. Make sure that all your directors and managers understand your business plan and most importantly, they are aware of what is expected of them when it comes to achieving the set goals. The team should be able to work together without having any disagreements.
Some of these business plans have to be discussed with the concerned parties before they are included in the business plan. For example, it is important to have a meeting with the suppliers/vendors and talk about mode of payment and you can also agree on how often they should be bringing supply. This will make your business run smoothly without having to run around looking for persons who will supply you with goods that you will need to use immediately.
The components of a business plan are supposed to be used as a guide to your business. The components will help you see if you are making profits or losses. It will help in accessing the business and it will be easy to identify areas that need to be improved of changed completely as you go forward. It is important to keep an eye on your competitors so that you can make sure that you are not left behind in that business market.
Make sure that your components are accurate and to the point. If you are writing your budget, you have to be sure that you have the correct estimates; they should not be too low or too high, because that can end up messing other budgets. In your 3 year plan, you will probably need to adjust as each financial year begins depending on the changes that are there in the cost of doing business, be sure to retain your original records so that you can also know the changes in the cost as years go by.