Explain Why You Should Always Have A Cash Flow Plan. The Structure of Your Business Plan

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The Structure of Your Business Plan

Your business plan is crucial to establishing the structure of your business, its goals, strategies, products and staff. It is used to plan and manage your business, apply for financing or show it to potential investors. It has ten main parts, namely:

1. Cover and table of contents

It sounds a bit silly, but a great cover for your business plan will show the professionalism and care that went into its creation. It’s also an ideal place to include your company logo and contact information. If appropriate, include photos of your products.

It is important that you also include your company name and number, as well as contact details such as address, website, social media accounts and the email and telephone number of your relevant director. You’d be surprised at the number of people who have forgotten this feature.

In order to help potential investors find their way around, the index must contain all points of the business plan with appropriate page numbers. Make it as complete as possible so that the reader has a clear idea of ​​what the document contains.

However, creating an index also gives you, the writer, a great planning tool to ensure you include all the points and information you need to include.

2. An executive summary with your business needs and goals

In the first part of the document, you must make a descriptive summary of the idea that includes the following points:

• An opportunity in the market

• Product or service and its benefits

• Management team

• Financial summary of financing needs and expected profitability

If you write an executive summary first, put all the information you have in your head. You can always return to it at the end of the main body wiring.

Remember, you need to capture the investor’s attention in about two pages where you will summarize the most important points of the text. You also need to consider a few things:

• It is vital that you define the need or problem that your company intends to solve.

• You need to define the fundamental goals of the company.

• You need to tell the investor what stage your company is currently in. Whether you are in pre-production, at the beginning of expansion or for example in profit.

3. Plan your business

This is where you will take out your old paper.

• You must describe the mission of your business – that is what you hope to achieve. Next, you need a list of the actions your company must take to get to this point.

• Next, you need to figure out how to solve the business problems you’ve identified.

• Now describe what your product or service is, what customers will get by buying it, and what their weaknesses or inconveniences are.

• Find out what price point your potential customers will be happy with.

• Finally, you have to figure out how you can find those customers.

Often all of this can be defined using a business model canvas and this is the subject of my second article. You can buy consulting for the production of this model.

There are usually already companies working towards the same goals. Recognize them and ask yourself: How will I differentiate myself from my competitors?

4. Explain the structure of your business

Creating a business plan involves examining the strengths and weaknesses of your competition, once you identify them you can justify why your company is unique. You need to stand out from the crowd to maximize your investment opportunity. That is, see the following information:

• Describe what you will sell to whom and at what price.

• Present your branding concepts – for example, are you going to be a luxury company, or are you going to bulk it up and sell it cheap?

• Describe how you will fulfill the order – in other words, the entire process from purchasing the product to actually delivering it to the customer and offering follow-up service.

• Explain how you will cover the main areas of production, sales, marketing, finance and administration.

• Include management, sales, inventory control and quality control accounts.

• Define how you will sell your products and analyze, if necessary, the location of the company and the advantages and disadvantages of this situation.

Make sure you address the following investor concerns: What are your competitors’ products and how do they create them?

5. State the characteristics of the market where you will develop your business

You’ll need to analyze the market conditions: how big it is, how fast it’s growing, and what its earning potential is. Explain how you will research your audience and with which tools.

Know the target market where the business will develop and direct marketing strategies towards that goal. If you don’t have an effective marketing strategy, you will waste time, effort and money.

Answer the following question: Where will you find your customers?

6. Design promotional strategies

Your business marketing plan should be included here. This is perhaps one of the most important steps when creating a business plan. Promotional and marketing strategies could determine the success or failure of your company. Try to answer a few questions:

• How will you position your product or service? Here you want the 4 P’s of marketing: price, product, promotion and place.

• Compare features such as price, quality and customer service with your competitors.

• How will you sell to your customers? Phone, website, face to face, agents?

• How will you identify potential customers?

• How will you promote your business? Advertising, public relations, email marketing, content strategy, social media, etc.?

• What benefit will each part of your business achieve?

• Why would someone leave your current competitors to buy your business?

• How will you attract them to your company and its products?

• What is a fair estimate of the number of customers you will get each year for the first three years?

• What will be your estimate of the cost of acquiring each new customer?

• What is the estimated cost of retaining each customer?

7. Define your source of income

Here you enter all the information about what your company will sell and where the source of income comes from.

• The products and services you will provide.

• Any advertising fees, commissions, membership fees, etc. that you will receive.

The analysis should include: price structure, costs, margins and expenses.

Include details of your expected cash flow over the first three years. Cash flow is a major consideration. In web based businesses this is called the burn rate.

8. Your team

This is where you will wax lyrical about the strength of your directors and key staff. Include their experience in similar posts and what they can do for your budding business. Include basic resumes for each and list their responsibilities. If you have a particularly well-known supporter, mentor or director, you can mention it here.

9. Your finances

When you get to this point in creating your business plan, you should start turning everything you said into numbers. That is, analyze the financial forecasts of your business. Also include your financial strategy – how you will manage your cash flow, vital for any new business. If you don’t have a plan, the business could suddenly sink or fail. If, on the other hand, you achieve unexpected success, your goals may suddenly change and you will need a new business plan. Therefore, you should assess the risks of your business, identify areas where something could go wrong, and explain what you would do in that case. You should include any other investments you have or will receive. Details of your share allocations, particularly large percentages, should be included.

9. What you will do with the investment

Very importantly, include what you are seeking financing for and how and when you intend to spend the investment. It is vital that the potential investor sees that the company will be significantly improved by the investment.

State how quickly and how often the potential investor will see a return on their investment. Also include the shares offered as well as their potential involvement in the company once they have invested.

It is vital that they are offered an exit strategy so that they can make a healthy return on investment and then move on to the next new business.

10. Attachments

It is very possible that after creating a business plan, you need to provide additional information that will complement it. For example:

• Market research data you have used.

• Resumes of the team that will make up your company. This is very important if you are looking for a high level of financing.

• Technical specifications of the product or service (you can include photos).

• Names of some potential customers.

Creating a business plan involves writing many pages with attractive, dynamic and precise texts that capture the attention of very demanding people. It should attract the attention of investors, who despite having read hundreds of them must find something unique in your business plan.

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