Entrepreneurs dream of the day when brilliant ideas yield enormously successful businesses and financial freedom. It's not so simple though; hard work is definitely required to make that dream a reality. An essential step forward is creating a solid business plan.
What Is a Business Plan?
A business plan is a comprehensive overview of the business idea. It outlines what the business will do and how it will be launched, covering everything from sources of funding to potential competitors. Business plans are especially useful for startup companies looking to attract and convince prospective investors.
How Do I Get Started?
Start preparing for your business plan by asking yourself some key questions. Will your business be a corporation or LLC? Where will you get the money to launch and run your business? What market need will you be satisfying?
According to Entrepreneur Magazine, a typical business plan should have the following seven sections:
1. Executive summary: Just like it sounds, it's a summary of the basic idea and should catch the reader's attention.
2. Business description: This section provides the framework for what the business is all about.
3. Market strategies: After exhaustive research and analysis of the target market and its needs, talk about it in this section, along with how you plan to position the new business.
4. Competitive analysis: Discuss competitors, their products and strategies, and how the startup will have a competitive edge.
5. Design and development plan: What will the new service or product look like and function? How will it be produced, packaged, and marketed?
6. Operations and management plan: This section covers the basics of how the business will operate on a day-to-day basis.
7. Financial factors: This last section includes income and cash flow statements.
Many potential investors expect an appendix including the resumes of the leadership team, market research results, etc.
While the idea of starting a business is exciting, doing the homework is critical. The US Small Business Administration offers an online tutorial on writing a business plan to help budding entrepreneurs prepare adequately.
Putting together a well-researched business plan will help communicate your vision and lay the groundwork as you prepare to launch your own business. Good luck!
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