Whether you draft the document yourself, or hire a professional writer, there are 12 key components that all successful business plans should include. Every business owner should have a plan written down. But, it is not just for posterity. Your plan will be the paperwork that determines if you can get a small business loan or attract entrepreneurial investors.
So, before the plan is ever written and after you think it is absolutely perfect, make sure it includes:
1. Vision Story
2. Marketable Idea3. Products or Services
4. Long-Term Benefits
5. Strategies and Goals
6. Target Market Details
7. Competitive Advantage
8. Employees
9. Quality Controls
10. Financial Projections
11. Show Profitability
12. Personal Investment
You are basically crafting a written portrait of your business. At a glance, small business investors and commercial lenders can judge the merits of your money making venture, and decide whether you are worthy of their financing.
Vision Story
One of the main aspects of a good business plan, that everyone will want to see before making a monetary determination is the vision for your business and the story behind its inception. Why did you choose this business? Why now? What is your mission statement? Why do you believe your business is bound for success, when so many other new businesses cannot keep their doors open?
You need to be enthusiastic and excited! You have to show that you believe in yourself and those in your inner circle to make this a successful small business. Your attitude should be very clear to the people who are thinking about giving you their money to make this happen.
Marketable Idea
Now is your chance to sell those seasoned businesspeople on your marketable idea. Generally speaking, your future customer has a problem or need, and they are looking for help. You have the answer in the product or service you are providing. Why will your idea outshine the competition? Why is your idea worthy of a credit risk or investment? Again, you enthusiasm and confidence in your business must be apparent. If you sound skeptical or unsure, you will not impress anyone, and any potential small business financing will walk out the door.
Products or Services
Then, you need to explain the products and services you will be offering to the needy public. You do not want to overdo it, and you need to be as concise as possible. But, you will want to give enough detail, so people can visualize your business, and understand why there will be a viable market. You will only get that check in the palm of your hand, if you vision becomes a shared vision.
Long-Term Benefits
Your vision should go far beyond the here and now. What are the long-term benefits of your small business? Can investors and lenders expect a good return on their investment? If you acquire a commercial loan, do you have a plan to pay it back in full within a reasonable amount of time; and how will money today change the outlook for your business down the road?
Strategies and Goals
Every good entrepreneur has strategies and goals in mind, to make sure their business is a success. What are yours? Where do you see your business 6 months from now, a year, or 2 years from today? How do you plan to meet those benchmarks?
Target Market Details
Not everybody on the planet is going to want the product or service you have to offer. But, there will be a select segment of the population that will be more likely to contribute to your success. Who are they? Based upon your research, what can you expect in sales? If you cannot convey that you have done your homework, and know your customer base, you can kiss business financial assistance goodbye.
Competitive Advantage
You will have to sell yourself to seasoned and savvy business people who know all the ins/outs of small business. You need to convince them that you have a competitive advantage over similar businesses in your target market area. Why will customers flock to you? Is it because you are more convenient? You are more affordable? Great customer service will be standard? What is it that makes your business special?
Employees
No small business is successful because of the efforts of one person. What support systems do you have in place to make sure your venture provides for your customer or client? Do you have great managers and employees making sure that things run smoothly on a day to day basis?
Quality Controls
In order to ensure that this run smoothly for the customer and your business, what controls do you have to make sure that happens? How will you deal with potential problems that inevitably arise in any business? You need a plan-not wait for it to happen and figure it out later.
Financial Projections and Profitability
Projections and profitability go hand in hand. Financially speaking, where do you see your business in a few months or a year from now? How can you be sure that what you have to offer will be profitable? What is the markup? What are the costs of labor as opposed to the price your customer will pay for the service? You must be realistic and honest with yourself and potential financial backers.
Personal Investment
Finally, if you are going to ask someone for money to grow your business, you had better show proof that you have sunk most of your personal finances in your dream. If you do not have the confidence in your product or service to risk your money, why should anyone else?
Now you know the 12 key components of any good business plan. If your document is well-written, to the point, and covers all of these elements, you will have a better chance of selling your business venture to investors and lenders.