You may also want to read part one of our series, Writing an Effective Business Plan.
Now that you’ve determined what needs your company fulfills, what your company’s strengths and weaknesses are and who has a stake in the company, let’s move on to talk a little about the rest of your business plan.
Identify your market
You should identify how large is your market, and if it is a sustainable market. In other words, will there still be a need five years from now? Ten years from now? You may not know for sure, but try to make a case for why there will be a need for your services in the future.
Also explain how you plan to market your business to your potential customers. It’s important to have a roadmap of how you will reach your market so they can find your business.
Devise ideal marketing strategies
Provide some details about how you would market your business, assuming that you had all of the resources you would need to do it.
If you don’t already have what you need to pursue your marketing plan, then be clear about what it is that you would need in order to be successful. Provide details about how much will you need for the next three months, six months, 12 months and further out.
Break down your streams of revenue
When starting a new business, you may not know exactly how much money your business will make, but you should know where your sources of revenue will come from. Give an estimate of what you think your business can earn, and also how much revenue your business will need in order to break even.
You should also present your pricing structure, costs, margins and expenses in this section. It may be difficult to know exactly what these may be for a new business, but doing some research and providing reasonable estimates will go a long ways with investors.
Present a budget
This includes not just what you will need to get your business started, but also what you will need for your business to continue down the road.
Keep in mind that funding for new businesses often comes from personal funds, friends and family. A typical Small Business Administration loan will require you to come up with at least 30% of the funding you need on your own. A qualifying SBA loan can provide up to 70% of your needed funding.
Have a plan to break even
How long do you expect it to take before your business can sustain itself, and what is it takes longer than you expected? It’s important to have a contingency plan in place in case you hit a rough spot.
Provide a summary of your plan, highlighting your strengths, goals and how you plan to achieve them.
Writing an effective business plan can seem like a daunting task, but if you take each section one-by-one, you will soon have a plan you can be proud of.
Even if you don’t plan to seek funding, a business plan can provide clear goals for you as your business grows. Be sure to re-visit your plan every few months to see how you’re doing and incorporate updates.