5 Elements of a Viable Business Plan
When it comes to business, vision and mission might sound nice, but it’s the actions that matter. Actions, on the other hand, demand timing, and timing demands planning. That’s where the importance of a good business plan comes in. Proper planning is unquestionably, 100 percent essential for any aspect of your business to succeed. A wrong, unprofitable plan will not just ruin your business; it will also jeopardize your resources, funds, and market reputation. Now that you understand the necessity of a business plan, it’s time to roll up your sleeves and start working on the information you need to create one.
Besides preparing a business plan, you must ensure that it has room for each big and small change that your company will go through as it evolves. However, not every company is the same. That said, different companies demand different plans, revenue structures, and overall business models. Still, they all share the same goal: devising a viable plan to raise the bar of success.
So, are you willing to create the best business plan to achieve a powerful position in the industry? Below are a few essential components involved in the creation of a viable business plan.
- Executive Summary
Ensure that your summary highlights what you intend to discuss in the rest of the plan. For example, an excellent executive summary should reveal a corporation’s mission report, along with a minor description of its services and products. It might also be an excellent idea to explain why you’re starting a business and include details about your experience in the industry as well. Speaking of experience, if you want to enhance your marketability as a professional and improve the quantity and quality of opportunities, an MBA would suffice. Today, acquiring higher education is much manageable than before, thanks to the advent of virtual learning. For instance, you can apply for an AACSB online MBA no GMAT and develop yourself with all the necessary skills and networking abilities needed to flourish.
Thus, the lesson here is simple, create a detailed executive summary. So fathomable that by reading it, your readers can instantly become acquainted with a large body of material without having to read the entire thing.
- Business Description
The business description is typically a reflection of your industry. Therefore, when describing the industry, discuss every little detail, including the future possibilities and the present outlook. On top of that, you should briefly explain all the other markets within the industry. Finally, include any new developments or products that will adversely or positively affect your company.
Ensure there isn’t a crack in your foundation. That means base all of your observations on factual data and be sure to footnote sources of information. It is even more essential if you’re seeking financial services. The investor will want to know just how reliable your data and company are and won’t have to risk money on conjecture or assumptions.
Additionally, explain how your supply chain networks and distribution will work, along with information about the support functions.
- A SWOT Analysis
In this part, you have to compile a detailed list of all your strengths and weaknesses (internal factors) and possible threats and opportunities (external factors). While jotting down all of these two factors, ensure complete transparency and utmost integrity. For instance, don’t hide your shortcomings or the threats you may face in the industry. In addition, prioritize being objective when assessing your business and those of your competitors.
Any strengths you unravel will represent internal, optimistic factors in your business that are within your control. On the other hand, weaknesses are also internal, but they can be improved with a forward-thinking attitude.
Lastly, both threats and opportunities are external factors. While threats represent negative aspects beyond your control, opportunities will positively influence your business. For instance, are there high barriers to building a name in a particular industry? Does a competitor have the market detained due to loyal customs? These could potentially harm your business, so you need to add a strategy to cover these aspects in your plan. Similarly, you can identify significant opportunities in the market and exploit them to your advantage.
- Operations and Management
This part of your business plan allows you to explain to the reader how your enterprise does things differently.
The processes and people that enable your business to operate daily are the keys to your competitive advantage. Your people and strategies help you build a better service/product, deliver it at a lower cost with precision in mind. Therefore, your management and operations must be able to faultlessly realize what you “promised” in the previous sections.
Here, you must demonstrate all the essential information about your company, so don’t leave anything out. Be brief but thorough.
- Financial Section
The finance section is where you offer the numbers that back up everything you mentioned in your previous areas. So, what’s left?
Here’s what: include conservative projections of your loss and profit statements, your cash flow statements, and your balance sheet for the next two years. Of course, these are all forward-looking projections, not based on your current accounting outcomes. Nevertheless, all of this holds tremendous value for investors and credit providers.
Without a business plan, even the most remarkable business can begin to decline rapidly. Therefore, you need to develop a realistic vision, followed by missions, and devise a stratagem to set yourself up for success.
Other than that, it is essential to remember that your business plan isn’t a one-time task. That means you can change it every once in a while, according to the current industry trends and prevailing practices. Consider implementing a yearly review to track progress or make adjustments to your plan. Motivation and accountability are essential in meeting your objectives. No matter how you roll the dice, keep the following elements in mind, and you’ll do just fine.