Writing an Effective Business Plan

Before you get started with your own business, it is really important to develop an effective business plan. This is especially true if you will require any third party financing. You will want to include the idea behind your business, the goods or services that you will provide, your budget, your funding sources, your market information, and your marketing plan.

He business plan should also give information about how you plan to operate your business over the next few years. You should create a formal plan to help the owners and financers understand what is needed of them. It also gives key advantages, disadvantages, and potential obstacles that may stand in the way of the businesses success.

Here are the components of a great business plan:

Executive Summary

The executive summary should be at least a page or two, and it should give information about the business idea, business goals, business structure, products or services provided, advantages of the business, target market, marketing information and financial projections. It is considered to be the most important part of the business plan, and it is definitely the part that is seen first by lenders. Writing this section last can be a great idea.

Business Strategy

The business strategy will include information about the history of the business, personal accomplishments to date, vision and mission statements, ownership structure, business model, products and services offered, competitive advantages, and short term and long term goals and milestones.

Goods and Services

This section should discuss the goods and services provided by the business in great detail. It should give information about the goods and services in relation to what other competitors have to offer.

SWOT Analysis

This will basically give an account of strengths, weaknesses, opportunities and threats, hence SWOT. It will list out any potential obstacles that may stand in the way, and clear cut plans to overcome them. The best way to do this is to take an objective view so that the investor has a chance to understand where you are coming from.

Marketing Plan

This will give an overview of the industry, as well as the potential for growth. It will also give a description of the marketing strategies that are going to help get the business out there, and discuss the budget for any promotions.

Operations Overview

This will give information on the daily business operation practices and requirements. It will also discuss the method of production that will be used. Also, discuss information about quality assurance, and how you will handle defective items.

Financial Plan

This will give information about the finances of the business. It will cover projected financial information as well. It is a good idea to offer a worst-case scenario and best-case scenario. It should also include information about the estimated profits and losses, capital required, sources for funding, repayment schedules, and tax information.