Types of Business Plans:
- The Working Plan- It is a tool used to operate your business. It needs to be detailed but short enough for presentation. It should contain information related to the business and market, the likely investments required, forecast of profit figures and the potential for finance providers and buyers.
- The Mini Plan- Better known as the “Executive Summary” and may be one to ten pages, with the main focus on key matters such as business concepts, marketing plans, financial needs and financial statements.
- The Presentation Plan- This plan differs from a working plan. More attention is paid to formal language, attractive formatting and conciseness. It is intended to be suitable for presenting to investors, bankers and people outside the company.
The Key Elements That Compose a Business Plan Are:
- An executive summary of the business plan. It should not exceed two or three pages.
- Evolution of the business idea, anticipation of market development, an understanding of the existing market, the obstacles in funding and the competition.
- The products or services offered by the company, a description of the services and products, key features, USP (unique selling point), short evaluation of competition and potential development.
- Key personnel and management should consist of complete details of all key personnel, including their achievements, academic history, practical experience in the relevant fields, weakness in management and solutions.
- Marketing should include the size of the market, past and future growth, analysis of the sector, potential customer size and the behavior of the buyers.
- Selling consists of sales planning and promotional advertising.
- Operational details should include the location or premises, equipment operated and key suppliers, if any.
- Detailed appendices along with a financial analysis summary includes the summary of projections, projection of monthly loss and profit, monthly cash flow, balance sheets, key projection assumptions and sensitivity analysis.
- Prospects include investor prospects, capital structure and short and long term objectives
There are several advantages of a strategic business plan. It helps you to allocate resources, distinguish your business from the competition, communicate your plans to your employees effectively and hold them accountable for the results. Business plans not only help you track the results of your efforts and make the necessary corrections to get back on track, but also adaptable – you can use an existing plan to create a second one to raise capital.