The 6 things to include in your business plan12 Jan 2016
A business plan is a draft of your business goals, reasons they are attainable, and plans for reaching them. Preparing a business plan is one of the first things that you should do as a founder. An accurate, easy-to-read, and well-organized business plan conveys professionalism and credibility. Although it takes a while to do all your due diligence to craft the perfect formal business plan, there are a few key elements that you should consider while drafting it. In this article, we have discussed a few things to include in your business plan to attract potential investors.
- Market Segmentation
For many investors, your ability to show that you understand your target market is important. Find out the demographics – age, gender, income, occupation, location etc. Discover what platforms they are active on – social media, blogs, communities etc. Understand their psychological features – personality, values, opinions, interests, and lifestyle. Use this information to understand whom you are targeting, so that you can strategize how you can target them.
- Value Proposition
A unique selling proposition (USP) should be part of every business plan. Without it, your business plan lacks the thing that differentiates you from the rest of your competitors. It defines your entire vision and aligns you with your target customer.
- Understand your competition
Find out who your competition is – names, websites, and the specific nature of their business. Find out their marketing techniques and methods. Research their market reach, and revenue streams. Find out if they are funded and who funded them. Make sure to research ways in which you can do better than your competition.
- Plan for marketing
Marketing is what will drive your business forward. The way to build a solid customer base is through marketing. Marketing can be done in various ways: content marketing, SEO, growth hacking, and a number of other digital marketing initiatives all proven to boost revenue and customer acquisition. Whatever method(s) you choose, make sure to research it thoroughly and document it in your business plan. Include how you are going to aim for your target market and the channels you have identified to reach them. What is your budget for your marketing initiatives?
- Identifying Revenue Streams
There is no business model without revenue. How is your startup going to make money? Have you identified the different streams that will bring in revenue? Be specific about revenue streams. It’s not enough to just cite your revenue stream sources but getting down to actual pricing and projected lifetime numbers. Provide metrics for interpreting your financial performance and analyzing trends.
- Cost Structure for your product
The first step in calculating startup costs for your business is to define your cost structure. Your cost structure groups all of your business expenses and costs into categories that summarize your business. Some examples of categories are: technology costs, sales expenses, real estate expenses, working capital expense, inventory expenses, etc. Decide what percentage of your funds will be allocated to each category.
Making a fair assessment of your needs and planning accordingly will ensure that your plan is stable enough to get you off the ground. Understanding the nature of your business, its purpose, what you’re selling, your target audience, is the key to producing a great business plan. A well-drafted business plan can be the blueprint of your startups’ success.