Sunday, 20 March 2016

The Essential parts of a good Small Business plan

Do you have a great business idea and eager to write it down? Are you scared you may not have the necessary skill to write a business plan? Carefully read on.

Your business idea may not sell if it's unwritten. If you have been thinking of what to do with that beautiful idea, kindly take the next step toward success by writing it.

A good business plan could perform magic. Investors will only invest in a small business or start-up if the business plan is convincing enough.

A business plan is a call-to-action. A written and realistic timeline of events, inflows and outflow of capital, market potential and maybe a 3 to 5 years forecast.

The best business plan is written from an outline- a business plan parts.

Parts of a Small business plan
* Title page
* Table of contents
*  Introduction
*  Executive summary
*  Body of the report
     + Business Description
     + Business Environment analysis
           -Industry background
           -Competitors Analysis
           -Market Analysis
      + Operating plans
      + Financial plans
      + Management summary      
* Conclusion and Recommendations
* Appendices
        + Detailed Financial analysis
        + CVs of key management staff

Title page: the title page attracts the readers to the business plan. It should includes title and sub-title, the business name, any reference number, degree of confidentiality and date. You can also include some artwork like the business logo.

Table of contents: it's the list of all the sections in the business plan in chronological form and relevant page numbers.

Introduction: the introduction should briefly state the subject matter,  the purpose and the methods used in obtaining information.
The introduction prepares the reader for the report- the questions that the report answers.

The Executive Summary: The Executive Summary is for senior people that may not have the time to go through the whole business plan. A well written summary should give a reader an overview of the business plan. It should includes
1. What the business is about
2. The problem that the business wants to solve
3. Conclusions and 
4. Recommendations

The Executive Summary is written at the end of the business plan.

Body of the business plan: the body of the plan should be split into sections with logical heading and sub-heading. The heading are essential guide that will enable the reader to navigate to any sub-sections. The body should includes:

1. Business Description, which should explain:
*Overall mission, vission and objectives 
*Products or Services
*History and ownership

2. Business Environment Analysis, should briefly explain:
*Industry baground

*Political, Economic, social, ecological and technological environment.
Political analysis should include change in government policy that might affect business regulations and funding.

Economic Analysis should include economic factors like interest rate and exchange rate that might affect business success.

Social analysis should include availability of desired workforce and the peaceful atmosphere.

Ecological analysis is not mandatory. However, it should include environmental friendly plan like how the business will reduce carbon emission as a results of its operations.

Technological analysis should include brief history, current and on-going  Technological advancements and challenges in the industry.

*Strength weakness opportunity threat(SWOT) analysis.
Strength for instance could be the quality of the workforce or competitive advantage.

Weakness could be that the factory has many old plant or the business can't access credit from banks due to huge collateral requirements.

Opportunity could be an excess demand for the company's products or services or excellent distribution network.

Threat could be  that a new competitor with huge resources might enter the market.

 *Competitor and market analysis

3. Operating plans, briefly explain:
*Marketing strategy
*Operating Strategy

4. Financial plan, should briefly explain:
*Income Statement
*Balance sheet and 
*Cash flow statement

5. Management Summary, should includes summary of:
* Key management personnel
* Organisation chart

Conclusions and Recommendations
The conclusions and Recommendations should follow logically from the other parts of the business plan.

*Conclusion should be based on The key and verifiable facts and should answer the reader's key questions.

*Never introduce a new line of argument when writing the conclusion.

*Recommendations should be from your discussions and conclusions.

Appendix should be included if only it's neccessay and non-essential for understanding the main arguments. It may be in the form of a reference to the body of the business plan. It's also recommended that the appendix should be the last items in the table of contents.

Alternatively, the appendices can be excluded but invite the reader to contact the author for more details.

However, it's essential to includes these two basic items in  small business plan appendix
1. More detailed financial calculations and explanations.
2. Curriculum vitae of board members and other key executive personels

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