A good business plan is vital in establishing a successful business. It also helps win trust from financial institutions when applying for a loan. Below are steps to follow to write an effective business plan.
- Executive Summary
The executive summary covers a concise definition of the speculated products and services. The executive summary should also feature a mission statement, plan summary, and the business’s ownership structure.
- Business Description
This part entails details of the business, including its name, address, history, and nature. One should also name the key figures in the business. The company description also offers details about the products and services.
- State Business Objectives
One covers the purpose of the business, highlighting the approaches they will use to achieve set goals. The business objectives can help convince financial institutions that the business is fit for a loan that the owner needs.
- Management and Business Structure
This sector covers the business’s legal structure. One should also list managers, key employees, any person linked to the business ownership, and the specific percentage of ownership and involvement.
- Products and Services
This part is dedicated to explaining how the products and services are provided, their pricing model, and even target customers. Also, one should explain their sales and distribution approach, the uniqueness of products or services, and the current or pending patents and trademarks linked to the products and services.
- Marketing and Sales Plan
Here, one writes their marketing strategy and intended execution procedure.
It also covers one’s plan to gain customer loyalty and unique aspects of the business from others.
- Business Financial Analysis
This section entails profit and loss statements, a cash flow statement, and a balance sheet that shows the debts and assets that the business has. These statements can help in qualifying for a loan. One should also include the net accounts receivable turnover ratio, profit margin, and current ratio.
- Financial Projections
This part covers approaches intended to maximize business profits. One should list the business’s sales and profit estimates based on speculated expenses for at least three years. The estimates should be realistic and not overstated.
The appendix is the last section in a business plan, and it entails any additional information that creates more awareness about the business’s products and services. The appendix is optional, and one could introduce a table of contents and chats to help organize the details better.
Following the above steps will ensure that one writes an excellent business plan, which is good for the business’s prospects.