write a business plan

write a business plan

Writing a Persuasive Business Plan

1. Introduction

The importance of planning should never be overlooked. For a business to be successful and profitable, the owners and the managing directors must have a clear understanding of the firm’s customers, strengths, and competition. They must also have the capability to forecast the future and to prepare for it. A business plan is the tool that fulfills these needs. It provides a firm foundation for the business manager or owner and provides an objective for the business. This paper is a guide on how to write a business plan for a start-up business, as well as a management tool for an existing business. It analyzes causes of failure in small businesses, the various types of business plans, and the crucial steps needed to set and achieve the company’s goals. By covering this information, business managers and owners will be prepared to generate a successful business plan.

2. Executive Summary

In pointing out these things, the executive summary should be able to convince the reader to turn into the rest of the business plan. It will also be the last thing written but will appear in your business plan at the very beginning. The aim in writing your executive summary is to include the most important things about your business to capture and keep the interest of potential financiers or investors. How you will convince the readers stage by stage will be described in detail throughout the subsequent chapters. Remember, this is a convincing executive summary, so it has to be convincing in order to succeed. But too much boasting in the summary will signal to the readers that this business is trying too hard to sell itself and will look unprofessional.

Your business plan should start with an executive summary. This summary is a condensed version of your business plan and should explain the business in a quick snapshot. It should include your mission statement, products or services provided, information about the company’s ownership, and a brief outline of finances. A new business might need this type of summary in order to land a loan or to set an objective for future growth.

3. Market Analysis

Before you begin your market analysis, determine the following information: – Target market and customer needs: Who are your customers and what are their needs? Who is involved in the decision-making process? – Market segments: Define the market in which you seek to become a part of. This could be industry-specific, consumer-specific, or geography-specific. – Size of the market and growth potential: You will need to have a good idea of the industry growth rates and sales forecasts so as to prove there is a tangible market in which to place your product. Is it a growing or shrinking market? – Market shares and trends: Suggest who will be your direct and indirect competitors. Direct competitors are those who offer the same product, or very similar, that you are looking to advertise. Other competitors may be alternative solutions to the problem your product solves. What are these competitors’ strengths and weaknesses? How is your strategic group map? This information can be displayed using a two-variable comparative chart. For example, a perceptual map, and in essence, it is comparing where all the different products are situated in the marketplace. Finally, prepare a SWOT analysis of your own product compared to others. SWOT analysis is a detailed look at a company’s strengths, weaknesses, opportunities, threats, and trends.

4. Business Strategy

4.1. Define your target market You must be aware of who your customers are and how to best reach them. Only by knowing your target market can you effectively ‘position’ your company, products, and services. This will help you to achieve a competitive advantage. It is also important to assess the current and future size of your target market. A small company can still achieve high profits if there is a small number of strong buyers. At the same time, if there are too few buyers, the company may need to reevaluate its market, a factor which may increase the bargaining power of customers and the threat of substitutes. It is also beneficial to assess the level of brand loyalty and customer loyalty to new entrants in the market. If customers have a strong loyalty to existing companies who are not likely to switch to a new product, a company may be faced with a low level of customer and a need to differentiate its product. Step 3 references step 6 in which we discuss which customers we are trying to serve and how we can best satisfy their needs.

Business strategy plays a critical role in the success of any business. A well-developed strategy will steer you towards achieving your goals more effectively. One way to look at strategy is to think of it as a link between your current state and your future state. A well-developed strategy will take into account your current position, your goals, and what steps you need to take to reach them.

5. Financial Projections

The cash flow statement is quite important to a small business. It is a clear indication of when income will be gained and when expenses will be paid. A positive cash flow is necessary for the survival of the business, even if it is only in the short run. A negative cash flow is a sign that changes must be made to the pro forma statement for the business to achieve financial success. A negative cash flow does not necessarily mean that the business will fail, however, it is a sign that the timing for revenue and expenditure is not what was expected. This is common for a new business, and it is likely that the business will still be able to be a success.

Developing the pro forma statement is the most difficult, however, it is the most important. The pro forma statement is a representation of a business’s expected financial situation in a one-year period. It is called a pro forma statement because it is based on assumptions and is not necessarily what will happen. The best way to develop a pro forma statement is to break the business into separate stages and address the revenue and expenditure expected at each stage. This should be relatively detailed and free changes as there will likely be many alterations during the course of the business. Having developed the pro forma statement, break the statement into the separate financial statements: the cash flow statement, the income statement, and the balance sheet. This will make financial documentation easier to understand and will also help aid the understanding of the expected financial situation.

Financial projections are a key element in convincing an investor to put money into a business. Unlike many of the other sections in a business plan, the writer must take a stance and support it with the information in the rest of the section. The only real sure thing that can be said about an initial business’s financial projections is that they will not be what was expected, even if the business is a success. Because of this, a conservative stance must be taken when addressing expectations.