A business plan is an organized, formal document that describes a company’s goals, products and services, and the ways in which it plans to meet those goals. The information contained within the document can vary in length, but the content will include the basics – an executive summary, a brief description of the business, and a few financial projections. Depending on the specifics of the business, other important details may also be provided in the form of detailed descriptions of suppliers, or inventory requirements.
The main goal of a business plan is to set a course for the future. This is achieved by defining the product, service, and target market. Having a good idea of what customers will want in the future helps you decide what to do and how to do it. For example, if your business involves providing a product or service to consumers, you should determine what types of consumer you are targeting, as well as how much the product or service costs. Other things to consider are the type of business, the legal structure of the company, and the insurance required to operate the business.
The best business plans have a few defining characteristics. One of the most common is a short business summary, usually in the form of a one or two page document. A business summary should describe the organization’s mission, structure, and personnel. It should also mention the company’s most valuable assets and liabilities. Another thing to bear in mind is the tax implications for a business, including the taxable income, and the type of insurance a company is required to carry.
The best business plans should also have a comprehensive financial plan, which includes projected revenue and expenditures, as well as the cost of capital. Although these are not always included in the business summary, they are crucial if the business hopes to secure financing. These factors are particularly important to startups, as the business may need a substantial cash infusion to get off the ground. In addition to funding, business owners should plan to invest in infrastructure, such as a storefront, equipment, and staff.
In addition to a detailed budget, you should also include a brief outline of your plans to market your business and to attract the right employees. Aside from a clear direction for the business, it is a good idea to have a list of potential investors, too. Having a plan in place, even before you open your doors, will make you more confident in the future of your company.
The best business plans are the ones that don’t use a generic template or have the wrong details. They contain the most important things to know about your business and how to get there. To learn more about preparing a business plan, read through our business planning guide. Whether you are starting out, looking for your first big break, or just want to better manage your current business, a solid plan will get you where you need to go.