A business plan is a written document that contains the strategies on how those plans will be achieved, what business terms are currently in use, and the time line by which those goals should be reached. A well-formulated business plan will lay out the plan as to what services you are planning on offering to your customers, how you will obtain market share, how you will keep your competitors from stealing your market share, how you will maintain a positive cash flow, and what it will take to achieve all of these. In order to have a profitable and successful business, you must first establish your market share. If no one knows you exist, then how will you generate sales for your products or services? Your business plan will answer all these questions.
The purpose of writing business plans is two-fold. First, they give you a plan. It’s important to have one if you’re going to seriously consider the goals that you laid out in your proposal. Second, they act as a guideline for you when it comes to planning your business. Business planning is an ever evolving discipline that keeps growing with the changing market. A business planning outline will help you stay on target.
A business plan also allows you to develop your marketing and branding efforts. In other words, it will outline your overall strategy. While you may already have a competitive advantage, you may not be aware of it. For example, if you currently only offer discount auto insurance to college students, you may not realize that you could expand your customer base to include high school students, college students living in other cities, and even individuals who live in countries other than your home country. A business plan can give you an overview of your potential marketing, customer, and financial statements.
One way to convince investors to put their money into your business is to present a convincing business plan. Sample business plans provide a template for writing a winning one. Investors tend to distrust business plans that don’t have a solid background of back-room details. They want to see the „big picture.”
The start-up capital portion of a business plan should be a detailed description of the start-up costs. You should discuss the anticipated profit and loss statement along with a detailed executive summary and marketing analysis. You need an executive summary that presents all the positive things about the business, while being cautious about negative aspects.
The cost information that goes into sample business plans should include total investment money. You should also take a look at the estimated monthly start-up and operating expenses. It is important to provide an estimate that can be verified by independent sources. Investors will want to know how you intend to finance the business. If you don’t have enough money up-front, you may need to obtain a small-business loan.
Your financial plan will include cash flow projections, business operations, balance sheet, forecasted income and cash collections or disbursements. A well-written executive summary and financial plan will provide an effective road map for investors. An effective road map is necessary because investors usually don’t like to invest in start-ups that are highly speculative. A thorough and well-organized business plan will help you convince investors that your business has the potential to become very successful.
An accurate forecast of future sales and earnings and a description of the business’s competitive position will give the reader a good feel for the company. The competitive advantage is found in your financial statements and your target market analysis. Investors will evaluate your earnings per share (EPS) against competitors in order to determine whether your business has the potential to achieve higher growth. If your competitors are able to sustain their competitive advantage through innovation and management strategy you will have an easier time achieving higher profits.
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