A study conducted by the US Bureau of Labor Statistics revealed that almost 20 percent of new businesses fail during the first two years of operations, while 45 percent fail during the first five years. Many entrepreneurs fail to plan their business operations well, thereby leading to company failure. According to the latest studies regarding business growth and survival, the first step of starting a company involves creating a comprehensive and well-thought business plan. This is because your business plan is undeniably the foundation of your business.
Apart from this, a well-written business plan guides you through each stage of the business cycle – may it be an introduction, growth, maturity, etc. Besides this, a business plan is a roadmap that helps you attract investors' attention towards your business, thereby enhancing your business growth prospects.
By now, we know that a thorough business plan is an ultimate need for your startup. Not sure how to make an end-to-end business plan that can help take your operations to the next level? Don't worry; we have your back!
#1 Executive summary
It is no secret that one of the essential parts of your business plan is the executive summary. It lets the readers know what your business is about. Apart from this, many investors base their decision according to how compelling and convincing your business plan's executive summary is.
Still not sure how to write an executive summary? Here are a few expert tips and tricks that can help:
- Include a brief product description along with what customer needs does it fulfill.
- Add a brief description of the traits, characteristics, and attitudes of your target audience.
- Explain how your business will differentiate itself from other competing players in the market, i.e., the unique selling proposition.
- Include a brief description of your financial goals, such as sales forecast, etc.
- Add a summary of the future milestones that your business hopes to achieve.
#2 Mission statement
The research revealed that mission-driven workers are more likely to stay for five years at a company. Besides this, 30 percent of such workers are more likely to become high performers of the organization. This means that to keep your workforce motivated and focused, you need a well-written mission statement for your business. This is because a mission statement guides your business forward and helps ensure consistency.
Apart from this, it helps convey your organizational culture and gives your business a sense of direction. However, while writing the mission statement for your business, make sure it's concise and conveys your business essence to your audience and other stakeholders.
#3 Marketing strategy
It is a well-known fact that your marketing strategy can either make or break your business. It guides all your marketing efforts. Apart from this, your marketing strategy helps position your business in your target audience's minds, thereby establishing your brand identity and ensuring brand credibility.
As a result, your business plan should include details regarding your marketing plan concisely. Some of the details include:
- Who are your direct and indirect competitors?
- What marketing mediums will you leverage, such as digital marketing?
- What promotional tactics will you leverage?
- What will be your branding messages?
- What will be your pricing strategy?
- How will your product be distributed?
#4 Operational plan
The operational plan entails the day-to-day tasks involved in running and managing your business. For instance, which tasks are to be undertaken daily? Who is responsible for them? What is the deadline for a certain project?
Such details help you and your employees stay focused and track the progress easily. Besides this, a detailed operational plan helps identify where you go wrong in case of unachieved targets.
#5 Management hierarchy
This part of your business plan includes a hierarchical chart of the management of your company. This helps showcase how authority and power flow within your organization. Besides this, it explains who reports to whom within your company.
Some other benefits of a management hierarchy include:
- It provides a clear understanding of the employees regarding their roles and responsibilities.
- It encourages a culture of loyalty and motivation among employees as they can relate to the organization.
- It clarifies reporting within the business, thereby avoiding any room for confusion.
- Everybody knows clearly what is expected of them.
#6 Fiscal planning
Without effective financial planning, even the most well-thought business idea can look unattractive to the investors. The fiscal details are essential pieces of your business plan that encourage investors and other stakeholders to collaborate with your business.
Unsure what to include in the fiscal plan? Here's what you need to know:
- The cash flow analysis includes details regarding what your business sell vs. its expenses will.
- The profit and loss overview entails what you've earned and your business expenses for the year.
- The breakeven analysis.
- The crucial ratios that tell the profitability status, the extent of leverage, the liquidity status, etc., of your business.
- The revenue predictions of your business.
#7 A summary of the business stakeholders
Finally, this part of your business plan will mention the details regarding the most important stakeholders of your business, including clients, employees, suppliers, retailers, digital marketing experts, consultants, growth advisors, etc.
The bottom line
A well-written business plan plays a significant role in helping your business grow by several folds in a nutshell. Apart from this, a comprehensive and logical business plan invites your investors to know you better, thereby attracting funds for business growth.
So, if you want an impactful and convincing business plan, you should make sure that you include the components mentioned above in it.
