A realistic and professional business plan is a crucial tool for attracting funding for a new or growing business. It should be more than that too, though.
Beyond helping you raise funds, a business plan is like a blueprint for a successful business. It defines your goals for the business and, at a high level, specifies how and when you’re going to achieve them.
What to include in a business plan
Business plans vary in the ways they’re organised and laid out – but all effective business plans include certain information.
Start with a page that lists the name, address and contact numbers for your business, as well as your contact details. This verifies that your business is a real entity, and makes it easy for potential investors to get back to you.
Ideally, follow a cover page containing contact details with an executive summary. This is a short, snappy overview of the business plan. It should hook the reader’s attention, and make it clear to potential investors why they should be interested in your business.
In the executive summary, include this information:
- your business concept
- the current turnover of the business, if it’s already operating
- your projected turnover (a realistic estimate of how much the business could make)
- the needs of the business in terms of funding, and what this funding would allow.
After an executive summary, provide key information about the current status of your business.
Are you trading as an individual or have you registered a company name? If you’ve registered a business, specify the registration number.
Provide the full details of the business owner or owners. If you have one or more business partners, specify what percentage of the business is owned by each party.
In this section, also aim to include:
- your company’s vision and mission statement
- details of existing debtors and creditors
- a competitor analysis, identifying your key competitors and their strengths and weaknesses
- a SWOT analysis, briefly outlining your company’s particular strengths and weaknesses, and relevant external opportunities and threats.
What your business is offering
Provide a clear description of the product(s) or service(s) your business offers, emphasising unique features that could give the business a competitive advantage.
An analysis of your industry
Describe your industry and the market(s) you’ll be targeting, and explain what opportunity this presents for your business.
For example, answer questions like these:
- What is your market and how big is it?
- What gap in the market will your product or service address?
- What caused this gap and how did you identify it?
- How fast is the market growing, and what trends is it showing?
This is where you describe how you’ll go about capitalising on the opportunity you’ve identified. At a high level, explain what will allow your business to meet the goals you’ve set.
What’s special about your business? What will its key focus be, and how will it succeed against the competitors you’ve identified?
Either in a separate section or as a subsection, also provide a clear overview of your marketing strategy. This involves considering what marketers traditionally refer to as the “4 Ps” – product, place, price and promotion.
First consider “product”. What about your product or service is of potential value to your target market? How will you position your product or service? In other words, what value can you offer customers to make your business stand out from its competitors.
Next is “place”. Where will customers be able to buy what you’re offering? What distribution channels will you use?
Third is “price”. What is the right price for what you’re selling, given all the factors that influence this?
Finally, explain how you’ll promote your product or service. What mix of marketing activities will you use to do this?
Finally, include a detailed financial plan that shows where your business is now (from a financial perspective), where it hopes to be and what funding it needs to get there.
Consider hiring an accountant to prepare your financial statements. These are complex business plan components that benefit from professional input.
Details to provide about the current financial status of the business include the following:
- start-up costs and working capital
- a balance sheet
- a month-by-month profit and loss projection
- a longer term profit and loss projection (for example, covering three years)
- cash flow projections
- a break-even calculation
- a list of assets held by the business
- a gross profit calculation.
Tips for creating a convincing business plan
As far as possible, the focus in a business plan should be on “hard facts”. Where you can, provide actual statistics, numbers, calculations and graphs, to support whatever claims and projections you make.
Putting together this kind of plan is hard work and takes time – but it pays to do a good job. Even just going through this process can help ensure that your business is a success because it forces you to think through your goals and how exactly you plan to achieve them. So don’t skimp on homework or skip steps.
If you’re uncertain how to structure the actual document, don’t panic. Many free and low-cost business plan templates are available online. For example, try one of the free templates recommended by Business News Daily, or try this template from Standard Bank Bizconnect.
At The Workspace, we can’t help create business plans, but we can make office space more affordable and effective, for both individual professionals and small businesses.
At our branches nationwide, we provide affordable serviced office and coworking space, with with shared business infrastructure (such as high-speed internet, meeting rooms and video conferencing facilities) and a range of on-site business services.