6 Important Areas You Need To Know When Writing Effective Business Plans

Writing Business Plans

-->

While many small businesses tend to be quick in their dismissal of business plans, such plans are actually crucial for a business—both in terms of providing strategic direction and in terms of obtaining potential capital investment. Since business plans allow a company to put their best foot forward to all forms of stakeholders, they need to be carefully designed and should cover all necessary elements.

Luckily, writing a business plan does not require gargantuan effort—only certain attention to detail. Here are the elements you need to include when writing a business plan:

Executive Summary:

Since this is the first section of your business plan, it should be brief yet comprehensive. The executive summary section should be able to convey all necessary information about your business—a brief introduction and overview, the types of goods and services offered and a brief outline of potential challenges as well as the objectives of your business. Don’t go into too much detail though, since you’ll be covering all of these aspects later on in the document.

Objectives and Mission:

These should be stated in the least amount of words as possible. However, it is essential in this section to use powerful words that leave a greater impact upon the reader. Also, objectives and missions need to be formally stated. More importantly, however, you need to talk about how you plan on achieving this and the timeframe required to do so.

Segmentation:

When perusing your business plan, investors will look for details on your target market. They’ll want to know how you’ve segmented your customers, with respect to demographics, etc. So make sure you’ve done your homework before writing this section. Be clear and comprehensive. Including some charts or graphs at this point would be an excellent idea for they convey a host of information in an aesthetically visual manner.

Marketing Strategy:

This is one of the most crucial elements of a business plan. Once you’ve segmented your customer base, investors are interested in knowing how exactly you plan on reaching out to them and communicating with them. So talk about the 4 P’s of marketing (or 6P’s) as they apply to your business in detail.

Financial Plans:

This is what investors are really interested in. They want to know how well you’ve broken down your costs, and how efficiently you’re utilizing the operating cash that you do have at your disposal. For new businesses, profitability may be an issue for the first few years, so don’t be afraid if your business is facing losses at this point. What you should choose to emphasize on is how you aim to get your business out of the red.

The Team:

This is one of the most underrated elements of a business plan. If investors are interested in putting money in your business, they want to know whom they’re giving it to. And they want to know if the recipient is qualified and trustworthy enough to make the most of that money. So here’s your chance to boast about all relevant experience and honors that you’ve had.

While we’ve spelled out the basic elements of a business plan for you, there are other aspects that you need to consider too, while working on one. Firstly, the aesthetics—right down from the cover page to the last page. The cover page should be attractively designed. The font size of your business plan should be uniform, charts and graphs should be used where possible and the text must be properly aligned. Use bullet points and tables to break up complicated information. And then there are other structural considerations: the text must be edited properly—NO spelling and grammar mistakes, the tone must be formal yet simple to understand and repeating of information should be avoided.

Remember, writing a business plan isn’t as complicated as it seems once you get down to it. However, it does require some time and effort. But when you’re able to secure the necessary capital for your business, all those pains are suddenly worth it!