A business plan is one among the most important business documents. A well-defined business plan is required to start a new business and manage the existing one. Nonetheless, business plans are dynamic documents and they change over time with the change in the market. So, they must be regularly updated and kept current. The major uses of the business plan include obtaining a business loan and raising funds through equity. In this blog, we have discussed how to write a business plan step by step.
Business Plan Template
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A well-drafted business plan explains all the aspects of business in a clear way. In a case where a business plan outline is required to be submitted to a MSME lender, it is important that is prepared precisely. A business plan template can be used for it. However, you can also take the help of an experienced professional.
A well-structured business plan with a good flow of thoughts is the point that must be kept in mind while drafting a business plan. So, the best business plan format can be the one which breaks into various segments and centers around a theme. So, lets discuss the major points of a business plan in brief.
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The team information area answers all the questions related to the team including the founders of the small business. You can answer this section in a hierarchical method, from the top-tier executives to lower-tier executives. Other information added in this section of the business proposals is their educational background and work experience.
Nonetheless, since this is a business proposal of your small business, you must also add a section which talks about how your team adds value to the business. The other points that you can also add in this section are:
- Team size
- The skills of the team members
- The gaps in the skill set
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The business overview section of the business plan would include all the details of the business. Such as when the business was started or will start and what is the vision and mission of the company. This section can also include information related to the products and services offered by the company.
The other two most important pointers of this section are:
- Certifications and awards received by the company
- How the business makes money?
Problems and Solutions Overview
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In the business plan document, you can add information related to the problems of the business. You can explain the problem and the methods that you are adopting to solve them.
In the problem section, you can discuss the problem you are trying to solve and the pain points for the customers. You can also discuss how these pain points are being addressed currently.
And in the solution area, you can provide the solutions to all the pain points. You can also discuss why your customers would choose the solutions and how the solution is covered or scaled. You can also provide a couple of examples of how you addressed the problems of your customers.
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Why market overview is important in your business plan? The market is where your business lives and a market analysis provides a foundation to the business. And therefore, a market overview or analysis is an important part of the business plan. You can include the B2B and B2C models of your business and the size of the market you are addressing.
This would help in establishing the revenue potential and growth potential of your business. You can also include the details of the market share of your business.
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Competitors make an important part of the business. Also, they are an important part of the market who can take away your customers. In simple words, they directly affect your business and there must be a point in the business plan which explains how you would deal with them.
You can describe the largest players in the market who are operating in your niche – who are your competitors is the basic information that is included in this section. An important point which is to be talked about here is how you differentiate yourself and your products/services from the competitors. You can talk about the SWOT analysis – Strengths, weaknesses, opportunities, and threats of you business and your competitors.
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The financial overview section of the business plan for your small business would include the financial performance of your business and the projected financial business for three years. These financial statements would include the profit and sales account as well as the balance sheet for at least three previous years.
You can also discuss the amount of investment or an MSME loan required. And so, how the additional capital obtained would be invested. You can also add details about shareholding and the key financial ratios, such as debt to equity, current ratio, profitability, etc.
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Setting an objective is the most important aspect of a business. Without an objective, the business seems to run in no direction. A business owner must know what his objectives are and what it wishes to achieve in pre-determined time, may be 1-2 years.
So, in this section of the business plan, the milestones to be achieved in the next 2-3 years must be mentioned. You can also include the milestones achieved by the business in the past. This will talk about the potentials of the business.
Now that you know all the key points to be included in a business plan, you can create a well-detailed business plan for your small business.
If you wish to avail a business loan for your small business, ZipLoan is the right option for you. We offer MSME and SME loans at minimal documentation and best interest rates in the market.
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