What is a Business Plan?
A Business Plan is an outline of the company, who you are, what you do, what you are trying to achieve and how are you planning to achieve it. There is no right or wrong way to prepare a Business Plan and you don’t need an accountant. Frankly it might be better to prepare it yourself as you know your business better than anyone else. You might need a professional to build you a model for your financial forecast (Profit and Loss account, Balance Sheet and Cash flow forecast). But as a start-up, you might not have the cash to hire a professional and I will give you some tips on how to create forecasts. It is essential to have a min of 3 years, I would suggest 5 years.
As mentioned in my article 11 Steps to start a company, Business Plans are essential for any start-up company. It is not just for investors, it is for you!
Business Plans tips
I will not give you a Business Plan template, there are a lot of templates out there if you need one. I want you to think about your business and make the BP relevant, concise, realistic, well-researched and backed by strong financials. Do not any information just to fill the pages and make your business plan look more ‘professional’. Frankly, I dealt with many investors and banks and they are only interested in the relevance of the content. Don’t add general information! It only makes you look unprofessional and amateurish, stick with SMART objectives (Specific, Measurable, Achievable and Timely).
Remember! Investors invest in the idea and the founders of the business!! It is very important to remember that! And if you are at the stage where investors are looking at the BP, they’ve already seen you Pitch Presentation and they are already interested! Don’t ruin your chance with a bad BP!
What to include in a Business Plan
So, what do you need to have in a BP? It is completely up to you but the most common chapters are:
1. Executive summary
2. Company summary
3. Products and service
4. Market Analysis Summary
5. Target Market Segment Strategy
7. Strategy and implementation summary
8. Competitive advantage
9. SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)
10. Risk and sensitivity analysis
11. Marketing Strategy
12. Management Summary
13. Start-up Funding
14. 3-5 years Profit and Loss forecast
15. 3-5 years Balance Sheet forecast
16. 3-5 years Cash flow forecast
17. Break-even analysis
18. Graphs and tables
Once again, you don’t have to add it all, only what is relevant to your business!
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