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10 elements of a business plan and how to write the right business plan
Running a business is not easy. Because if running a business without a clear goal Lack of travel maps It will make the business not meet the target. I don’t know what to do to get to the point called “successful”
So plan your business carefully from the beginning. therefore it is important to both the business and used to persuade investors to see opportunities for success
This article opens up 10 elements of a business plan. with the correct way of writing that help your business have goals There is a path to success.
What is a business plan?
A business plan is a document specifying various details. about the business what the business will do for what purpose And what must be done in order to achieve the goal? The business plan will be used as a map (Roadmap) in the business, which is a framework for marketing planning. financial planning and management. It can be considered that the business plan is the first step in doing business and success.
The purpose of writing a business plan
We write a business plan to use as a map for business operations. However, another purpose of writing a business plan is to use it to present the possibility of success for investments, fundraising or business loans. If we have a detailed and prudent plan, our sponsors will see the value of the investment.
Benefits and Importance of Writing a Good Business Plan
1. Help to see the business overview
The first factor of any successful business is that we must know ourselves well. whether it is a product/service customer demand Data that indicates factors of past results. Operation method revenue-expense structure, etc., to be used in the next strategy
2. Help in business strategy
Through a good business plan we will see all goals and to-dos. Strategy is based on how we prioritize what to do first. see the relationship of goals Understand what to do in order to get something
3. It helps to measure results.
Let businesses know where they are on the map. Have the information to understand problems and find new opportunities, as well as to adjust plans to create new strategies to get closer to success.
4. Used for financing sources
whether fundraising solicitation from investors or requesting a loan, etc., which is very important For new businesses and startups
from the above purposes and benefits We therefore need to understand how to write the correct business plan. understand the elements in order to create a practical business plan
10 elements of a business plan and how to write an accurate and practical business plan:
Writing an accurate business plan that can be used as an action plan and for funding proposals consists of 10 elements or steps in writing:
- Write an executive summary
- Company description
- Market analysis
- Organization and management details (Organization and management)
- Service and product descriptions (Service or product line)
- Marketing and sales plans
- Investment details (Funding request)
- Financial projections
- Appendix
- Emergency plan
1. Write an Executive Summary
Executive Summary or Executive Summary is a brief overview of the business and business plan. This will give the reader a basic understanding of the business and all plans. They are generally only 1-3 pages long, and should be the most concise. but can visualize
The content in this section will tell you what the company is, what it does, and what it will do to be successful. The main components of the Executive Summary consist of:
- business introduction section Goals or missions, what to sell, to whom, and general business information.
- Financial information such as projected revenue, profit, payback period, etc.
- Basic Funding Information how much capital is required Where does the funding come from?
- Information about the market and competitors Identify where the business is in the market position and which business it is competing with.
- Actually, this section can be written later. Because we need information from other parts. to some extent before But this part can be considered as a trigger point for investors. If able to show him a clear picture of how successful the business will be.
2. Company Description
The business description is the part that describes what our business does.
- Sell or provide any type of service.
- What problems are you solving or meeting people’s needs?
- who is the customer
- Who are the stakeholders? (Stakeholder) that the company will sell / solve problems for
- In addition, advantages should be specified. Business selling points that will make your business successful Channels and methods for approaching and selling products
3. Market Analysis
Market research is the part that must identify the information that we have studied and analyzed the market.
- How big is the market size that we will play? (Market Size)
- Who is the target group? (Target Customer) What does the customer need?
- currents or trends in that period
- Forecasting the growth of business products/services in the market (Market Growth)
- Including Competitive Analysis that competitors are doing well. What customer groups does he capture? How are his sales, etc., in order to analyze how to overcome further.
4. Organization and management details (Organization and Management)
Organization and management details (Organization and management) refers to the details that tell the structure of the company who works what. Both the management and employees Including details of other organizations that the company works with
The content in this section should tell the order of work. or more so called “Organization Chart” that shows each position How does each department work together? And what positions and responsibilities does each person have?
However, if more detailed May specify additional details of the job in each position. and expected indicators from various sectors To visualize the work and the results from different units that combines into the image of the company’s goals
5. Service or Product Line Description
content in this section It describes the products and services our business sells. Describe what the product/service is like. What are the benefits to the buyer/user, including the value and profit that will be generated from the product?
For companies with limited inventory, they can only provide detailed descriptions of each item. but if a large company has a large number of products Details may be specified in categories.
In addition, another thing that should be noted is Forecast or provide information that has been made about which products are selling well. and very profitable What is the market trending? Including the cost and source (Supplier) of the acquisition of the product. to further improve production plans and marketing strategies.
6. Marketing and sales plans
Marketing plans and sales plans are the most difficult and critical areas. because it is considered the front in approaching customers and identifying strategies that must be followed in order for the business to achieve its goals
The goal of marketing and sales planning is Identify how we will approach customers. how to nurture him and maintain it to continue to be a customer of the business
Another thing that should be mentioned in this section is Setting up marketing and sales budgets and forecasting how much sales or ROI (Return of Investment) will be generated from the budget by specifying the budget at intervals, such as per month, per quarter, etc.
The marketing and sales plans of each business are different. and in each situation Businesses also need to change their strategies accordingly. It is recommended to study how to write a marketing plan in detail in this article.
7. Details of investment funds (Funding request)
content in this section If your business already has a reserve fund may provide only rough details Who owns the capital and how much capital is there to operate? But what if you have to write a business plan for funding? for fundraising or apply for a business loan It may be necessary to specify the source of funding and the amount in detail, including:
The amount of funds required
Sources of funds such as capitalists, loans from fundraising. and the amount of funding from each source.
Funding information should be consistent with the business plan and goals. Including the budget will go down with what expenses, such as needing capital of $US 50,000 in the first year to do this. to get this profit And in the following year, how much capital is needed to achieve the target profit? or to expand the business, etc.
8. Financial Projections
A financial plan consists of two parts:
- Financial situations such as capital, income, profits, revolving funds, expenses, etc. clearly indicate the current or predictable financial situation.
- Financial analysis means forecasting profit – loss (Income Statement), cash flow statement (Cashflow) and balance sheet (Balance Sheet) to be used to analyze and forecast the direction of the business in the future.
This section is difficult and requires great attention to detail. So it may take several days to do. and requires a large amount of supporting information, including forecasting knowledge. Therefore, should find tools to help calculate This may be Excel / Google Sheet or other specialized programs. That helps to see the company’s finances, such as ERP (Enterprise Resource Planning), etc.
However, you should study finance. How to write a budget, balance sheet and various financial documents more too
9. Appendix
Appendix or Appendix is an extension of the business plan. which collects and references various sources of information We are unable to specify in the sections, but this section is necessary for an in-depth understanding of the origin of the business plan.
For offering grants or loans by the information and conclusions used as reference in the business plan It should be listed in the appendix to build credibility. and show the origin of the business plan to investors or banks
10. Emergency plan
No matter how careful and concise we try to write a business plan, But in business, there are often events that make the plan go smoothly. Especially with external situations that we cannot control, such as the Tom Yum Kung Crisis in 1940 or the Covid-19 Pandemic Crisis. severely affecting the business has made us aware of uncertainty
- We might write down a few worst-case scenarios and outline how to cope with any new marketing strategy. downsizing the business Issuing products to stimulate sales, etc., make a rough plan to deal with. both financial and marketing plans From the information in the 9 business plans mentioned above. This will help us get to know our business better and be able to find the best way to deal with the situation.
Finally, for business planning
A complete business plan probably doesn’t exist in a world where business is highly volatile. Business owners must constantly monitor the situation, measure results, and assess the situation to improve their plans. The business plan may be contemplated to set quarterly or semi-annual goals continuously. changeable But what you should stick to is the ‘goal’ so that the business doesn’t get lost.
