Akinpelu Babatola Guest Writer
As an aspiring business owner or potential startup partner, you have probably come across the term “business plan.” If you have not, well, now you have.
So what is a business plan? And what’s the big deal about it?
Well, let’s find out together, shall we?
What is a business plan?
Simply put, a business plan is a guide for your business. It outlines all the aims and objectives you have for your business and how you intend to achieve those aims and objectives.
You can also think of it as a roadmap for how your business will operate.
You might be worried about business plans being technical and super formal. But that’s not the case. If you have plans for your business written down anywhere, you have a written a business plan.
Those jottings on the napkins, scraps of paper or the corner of your journal all qualify as a basic business plan.
If you are going to present your plans to others though, these won’t do. You will need a much more detailed or formal business plan. Investors, banks and any other person interested in your business will be expecting a formal business plan and not just a napkin.
What goes in a formal business plan?
As already mentioned, a formal business plan is a more detailed plan than usual. It is usually filled with several subsections that discuss different areas of operations of your business. The most common elements of a formal business plan are
An Executive Summary: this is a brief description of why you are writing the business plan; whether to seek a loan for remodelling or funds to launch your business.
Overview of the business: this is where you talk about what your business is all about, what industry you operate in and what things will look like going forward. You can also talk about your products under this section or choose to create an entirely new section just for that.
Marketing plans: how do you intend to break into the market? Who are your competitors? What edge do you have over them? You will answer all these and more marketing questions in this section. Some business plans choose to do competitor analysis separately from their marketing plans. Choose whichever option is more convenient.
Overview of operations: You will need to discuss your business’s operation and management in this section. It will cover anything and everything from logistics to team member responsibilities.
Financial analysis: this is perhaps the section most investors pay attention to the most. After all, it is where you tell them how your funds will be used, how much income they should expect, and any other finance-related sections of your business or startup.
Based on your unique circumstances, you may be required to write more in your business plan. But these are the essential elements of any detailed business plan. Learning about business plans can be daunting. But there are reasons for it.
You and your business need at least one business plan, and here are some reasons why:
- To better understand your business goals
- To show others, particularly investors, that you are serious about your business
- To plan for uncertain events
- To better understand your market, competitors and your consumers
- To present the feasibility of your business idea
- To better estimate your costs and budgeting.
Now you understand why you need a business plan, so why not let us at the Xpress Train help you get started.