5 Main Components Of A Business Plan
Any business whether small or big started out with a plan in the minds of their owners and in most cases a written outline of the steps needed are followed or carried out for the business to run smoothly. Having a detailed business plan by your side will help you work effectively in achieving your business goals. For sure no business owner or partners would want to run a business in chaotic state or no direction at all.
For you to fully understand the proper creation of a business plan, here are the 5 main components that you have to consider:
1. Business Idea
Determine what type of business you want to engage with, service or product related. Find out who will be your target consumers, how you will sell your business and assess if your intended business poses a real potential in the industry you want to concentrate.
2. Capital Investment
In any business, money plays a vital role for a business to run. At this point of time, an entrepreneur must analyze first his/her current financial capabilities to start a business or further expand an existing business. If you have enough capital resources and can afford to get a financial adviser, hire one for your financial security. He/she will professionally guide you in allocating your capital investment or advice you if you still need to file an additional loan. If you are on a tight budget, make your own list of possible expenses like rental, furniture or fixture, wages, utilities and permits you need to settle before opening your business.
3. Financial Forecast
Make a forecast report of what would be your possible sales in the first few months or quarter in running the business, your profits or ROI (return on investment) and the entire cash flow that will take place like the fixed expenses that you will incur such as rental if you are going to rent a space and the wages of your hired staff. Remember, there are instances that a start-up business will just either make or break with its first few months earnings, so be prepared to have enough resources to fill-in those months when earnings are lesser than expected.
4. Business information
Any business should have a proper record of when the business started, who are the owners and co-owners if it is a corporation or partnership type of business. Be sure that you comply with all the requirements under the business sector for you to operate legally.
5. Other business requisites
Note as well the other business requisites you need to attend in order to ensure your security while running your business like filing those documents related to patent issues, prototypes and other contracts needed to sign to declare your ownership of rights for any product or service offered under your business name. This move is also for your protection in the long run when somebody else tries to copy or duplicate your business.
Making a business plan requires gathering of relevant facts, surveys and other information that would be helpful to the business you have in mind and putting everything into writing for your future reference. Your business plan must have your main objective and your actions or procedures on how you can achieve all those goals with your current capital.
Create a business plan that is clear, precise and easy to read for your business partners or creditors to easily grasp what are your needs and potential capabilities in running that particular business and give their go signal to pursue the business or lend you the needed capital resources.