Planning your business is essential in order to keep it stable and successful. Either big or small, we can’t go out into the world and introduce our service/product without putting any organization into it. I’ve been asked what are the steps to planning, and I want to help you with a simple list to give you a better idea of how you can structure your business plan.
The reasons why you may need a business plan even if you think you don’t need it and you’re small, is because it’s something you can look back at to stay organized. Some of the questions you could ask when preparing this is, what do you want to do five or ten years from now? What are your dreams and vision with this? The length of this plan varies, it usually should be ten pages long, some may say it’s thirty pages, but that lands when a business is already formed and looking to expand even further.
Here’s a quick list:
- Executive Summary
- Market Analysis
- Management Team Description
- How you plan to Market
- Analysis of Company Strength
- Cash Flow Statement
- Revenue Projections
- Exit Strategy
From my understanding and the people I’ve talked with, your executive summary should stand out the most. Most startup’s probably only need this and investors will likely only observe this to determine if your business is worth investing or not. Your executive summary is basically an overview of what your business is. The mission statement, vision, what it serves, how it’s different, how it plans to market, it’s all described briefly in that summary.
Next is market analysis. You may spend a lot of time here studying your competition and where you and your product may fit into the market.
Management team description is describing about the team you will have. Their experiences and success’, who the key members will be, wages, and the number of hours they will contribute.
How you will market your product or service will also need to be examined. It narrows down to who your main target audiences are and how you can reach out to them.
When you analyze your company, you have to list down what it’s strengths and weaknesses are, alongside with any threats the business may face and how you may overcome them.
Cash flow statement demonstrates where the cash is going. It’s the accounting process of the business. Some may not be attracted to this, but this really helps you stay organized with looking at where your money in the business is.
Revenue projections is trying to estimate how much you will sell and gain during a period of time. I call it forecasting. Although it may not always predict correctly, it still gives you a good idea of what you want to aim for and what can be expected.
Lastly you want to have an exit strategy. Perhaps not the most prettiest part of the plan people are looking forward to, but planning this will have you prepared just in case something goes wrong. It can be either liquidating your assets, merging with another company or being acquired.
Hope this guide helps you gain a better idea when you’re preparing to create your business plan. I know most that I’ve talked with have skipped this process and would rather just dive in the water, but there is less risk when we prepare ourselves. If you are seeking more help and or are lost about your area, contact a professional CPA or lawyer to give you more details on taxes, regulations, and additional information on what’s needed in the process.