With the unpredictability of business, it is very vital to plan ahead to ensure everything works well, or at least works according to plan. It is one of the most vital aspects of strategizing for a business and has played a very vital role in the successes of several businesses. In a nutshell, a business plan is a document highlighting several aspects of a business used as a checklist as well as a strategic plan for businesses, mostly those that are start-ups. Established companies can also write down business plans for other reasons including ensuring sustainability and stability of their operations. A business plan contains several key components, which vary from one business to another, but which include:
Mission plan and statement
This is a description of what the company intends to achieve. It is best written as a sequentially planned progress with specific timelines. Entrepreneurs and start-ups are advised to research a lot in this area to ensure they kick-start their business with well-defined goals that adhere to strict timelines.
Company product or service
This is a brief description of what the company intends to deal with including their suppliers and supply schedules.
Market research and analysis
Getting into a new market may be challenging for entrepreneurs. It is therefore very vital that entrepreneurs do extensive research on their markets to understand what kind of niche they seek to satisfy.
Company management structure
Every company requires a hierarchy of management to ensure the flow of resources and accountability. It is therefore very vital to include such components in the business plan. This particular information should include the experience and areas of specialty of members of staff.
Company strengths and weaknesses (SWOT analysis)
Analysis of a company’s Strength, Weaknesses, Opportunities, and Threats (SWOT) is very vital for any business in any level of growth. It will make the entrepreneur understand what exactly to expect in terms of challenges and how to overcome them. The analysis will also shed light on how the business stands out in terms of strengths as well as opportunities.
Financial research and analysis
This includes cash flow statements, financial sources, revenue projections and any other financially related document for analysis. This will ensure the entrepreneur understands why exactly he is getting into the business whose sole purpose is profit-making.
This component of a business plan summarizes the entire business details. This will include the executive summary, which is usually at the beginning of the plan, which basically contains a brief summary of all details in the business plan.
A business plan greatly reduces the random costly decision making that comes with starting up a business. Other uses and benefits of a business plan include:
· To attract financiers who can look into your plans and assess if they are worthwhile.
· Serve as a management tool to ensure everything is done at the right time.
· Can be used to bring on board team members who bring in different valuable inputs.
With the said benefits, a business plan is one of the most vital documents a business owner can have, be it a business idea pre-conception, a start-up, an established business or even a struggling business.