It’s a simple fact that even though you might be excited about the prospect of running your own business, your passion is not what’s going to keep it going. Businesses fail every day for many reasons. One of the most common things that can sink a business is a lack of planning. If you were to look at a list of successful businesses, you would probably find that most, if not all of them have a business plan in place.
While these documents can be anywhere from one to 100 pages long, the average business plan is between 15 and 20 pages. While putting together a business plan might seem complicated, the good news is that you don’t need to complete an online MBA program in order to write one. Simply break down the necessary information, one section at a time, to create a coherent strategy.
This section of the business plan is often considered the most important. This is where your business plan details the current stage of your business, where you intend to go with your business, and how your business will be successful. It needs to be clear and concise and showcase the strengths of your business. Some things to include in the executive summary are a mission statement, company information, products or services your business provides, and a summary of your future plans.
In this section, you should describe your business and what needs in the marketplace you are trying to meet. This section should also include the types of consumers you are hoping to serve, along with any advantages your business has over others that provide the same services.
It’s crucial when starting a business to know your target market. After defining your target market, you will then be able to price your product, know where and how your products will be distributed, and come up with promotional strategies so that your business will be profitable in a competitive market.
In trying to figure out how your company is going to make money and compete with other businesses that might be offering similar services, you’ll want to perform a competitive analysis. This section of the business plan will feature the strengths and weaknesses of your business and any barriers your business has that will impede your company’s ability to compete. Some of these barriers might include rapidly changing technology or an inability to hire enough competent employees.
In this section, you should write out how you plan on developing your business. What are your short-term and long-term goals for your business? How exactly are you going to achieve those goals? In other words, write out how you plan on moving forward and how you are going to go about attracting financing and team members.
Operations and Management
It’s important to include in your business plan the organizational structure of the company, ownership details, and who is on your management team. If you have a board of directors, you should also discuss their qualifications. If your business only has one or two people involved in the organization, these details might not seem pertinent. However, you should still discuss who is in charge of what and the responsibilities of those involved in your company. Besides this information, the operations and management section should also include the legal structure of your business.
While it may seem like the most important part of your business plan, the financial factors section usually comes last. This part of the plan should include your income projections for the next three years, a 12-month cash flow analysis, and a balance sheet. If you are hoping to attract investors, you should also include a list of the equipment you use in your business, all of your sources of funding, financial statements for the last three to five years, and the owners’ personal financial statements.
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