It goes without saying that creating a business plan is nothing if not important for deciding the direction where your newly founded business wants to go. In this article, we will discuss the typical structure of a business plan that can be used for multiple purposes, particularly on raising investment from venture capital.
The purpose of the business plan is to describe the initial judgements you have made about the general direction that your team intend your newly-founded business to take in the business environment. The business plan should also help stakeholders assess your approach to running the company.
“Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set yourself up for success.” - Yogi Berra
You’ll need to conceptualize the content of your business plan, so be sure to keep your business plan organized with the following structures that also allow readers to assess the credibility of your enterprise:
Your Company Aspiration
It is a must to know how to design the company profile and the path your company is planning to take in the future. Therefore, when explaining the company's vision, mission, values, and goals, one has to highlight how your team would successfully take the company forward by virtue of being future-focused, optimistic, and aspirational. For example, take a look at the following successful world's top companies' aspirations for your reference:
“To be the world’s best quick service restaurant experience.” - McDonalds
“To be number 1 or 2 in every single market that we serve.” - General Electric
“To be the world’s most customer-centric company.” - Amazon
“To bring inspiration and innovation to every athlete in the world.” - Nike
“To give people the power to share and make the world more open and connected.” - Facebook
“To organize the world’s information and make it universally accessible and useful.” - Google
Choosing and Managing Team
When building your team, always remember to choose someone you can rely on and can be the right person for the right job you want to assign them in your venture building. First thing first, start with you; what this means is the fact that high self-awareness leads to better team performance. Next when looking for the right teammates, remember that personalities matter, but it is also worth noting that having action-takers and heterogeneity in your team should be taken into account.
There are multiple ways to work in a team. Your team could take all the decision from beginning to end, or your team could divide the decisions (for example X would be responsible for financial decisions, Y for marketing decisions, and Z for coordinating and making the final decision). Please describe clearly how your team has decided to assign the roles and responsibilities for each person.
Market, Products, and Services
Understanding the market potential is imperative for a range of different strategic decisions. More importantly, one must realize the problem you solve for the customers and the projected value your product generates for them, which brings me to my next point; always take a look at the market size that accounts to the number of individuals in a certain market segment who are potential buyers. Next, look closely the direct and indirect competitors in the industry your business is operating.
For products and services, ask yourself this question; what is the point of differentiation for your brand? In another word, what is the value proposition that you aim to offer to them? Additionally, understand the end-to-end supply chain that your business might go through to amplify the performance of your company.
Basically, a financial projection could be defined as a forecast for your business' upcoming revenues and expenses when doing the operations. Commonly the projection will incorporate internal and external data by means of historical performance and market factors in the calculation to produce the most accurate figure for market performance. Financial projection can also be a good indicator to carefully plan the budgeting and to determine the valuation or present value of your business. Different scenarios can be applied to analyze how changes in one aspect of the business might affect the overall profitability of your business.
If you are interested in knowing how to create a high-quality business plan, check out our free business plan template in Excel format here: bit.ly/hebetemplateexcel