Before you start a business, you must first frame a business plan. The business plan forms the skeleton of your business. Financial agencies or angel investors would see your business plan to find out whether your venture is eligible to receive loans.
Irrespective of the nature and size of your business, whether it is a profit oriented business or a non-profit venture you must write a business plan. In your business plan, you should define on your business goal, the justification of your goal and steps to be taken to realize the goal.
The basic business plan, applicable to both big and small businesses, are either externally focused or internally focused. An externally focused business plan includes information beneficial to the investors or shareholders of the company. An internally focused business plan on the other hand includes ideas dealing with the internal structure of the organization and development of products and services.
The outline of a basic business plan should include all the features of the business activities, which are necessary for functioning of the business. The primary aim of any business plan is to meet the financial goals. However, non-profit organizations have non-financial targets, such as service to the community.
A basic business plan should have the following sections: executive summary, background of the company, description of its products or services, selling ideas and competitive advantages, if any, their target customers, structure of the organization and profile of its staff, risk assessment and financial projections.
This is perhaps the most important part of your business plan. A well-written executive summary is the first step in arousing the interest of your investor.
In this section, you should write about the origin of the company.
Description of product and services
Your product or services are the mainstay of your business. You should explain how your product or services differ from other similar products in the market.
State the nature of your potential customer and the radius of your market.
You should state the marketing strategy you intend to follow, to make your product available to the largest number of customers.
The profiles of the people entrusted with key responsibilities are important to ensure that your business will be managed efficiently.
Your lenders would need three to five year financial projection to judge the financial viability of your project.