The business plan is a written description of your future—what you plan to do and how you plan to do it. It con tains your business goals, the strategies you will use to meet them, potential problems and how you propose to solve them, your organizational structure and capital required. It is a document that will benefit your potential investors or partners, your creditors, affiliates or dealers, your employees and suppliers.
Tristan Macapanpan, a professor at the De La Salle University’s Graduate School of Business, says you must draft your business plan right from the moment you recognize an opportunity to make money. Ask yourself: Is there a market demand for the product or service you’ll be offering? If so, can you produce the product or service? Will you make money out of it?” Ernesto Perlas, a marketing professor at the same school, compares a business plan to an airplane flight. “Like an airplane, a business venture can’t take off without knowing its destination,” he says.
THE EXECUTIVE SUMMARY
One of the most critical components of your business plan is the executive summary. This tells the investor what you want to do, and should be no longer than two or three pages. Ideally, it should be written last to summarize all that you have included in your business plan.
The summary must contain your mission statement and describe what your business will do, for whom and why, and where you want it to be in the future. It must have some detailed financial or strategic objectives of your start-up enterprise including, for instance, when you expect payback time. You should include pertinent details such as your enterprise’s legal form (sole proprietorship, partnership or corporation), your business activity and its benefits to users, your competitors, your financial prospects, and the investment you need and how you intend to use it.
If your business is a start-up, you should decide whether you can compete successfully in the market. You should also study government regulations, capital requirements, and the factors that will affect your profitability and growth.
THE SALES AND MARKETING STRATEGY
At the outset, decide how you will compete in the market and nail down your competitive advantage. Spend time pricing your product or service, because how you do it will decide whether you win or lose in the market.
Map out your distribution strategy—the business of moving your product from the factory to the end user. The best way to do it is knowing how your competitors distribute their products—and then deciding whether you can come up with something better. See if you can open a shop, use direct mail and intermediaries, direct selling including networking, or go directly to retailers.
Ask yourself how you’re going to promote your product or service in the market. Know how to approach the customer and intermediaries about your product or service, your means and medium of advertising, sales activity and approach to selling, packaging, and public relations strategy.