Anyone that wishes to start a business needs a proper business plan. There’s an old adage that says: “Failing to plan is planning to fail.” Indeed, this axiom holds true for every element of life, including entrepreneurship and business.
There’re several reasons why a business plan is essential to open any enterprise. Furthermore, there’re several types of business plans too.
Importance of a Business Plan
Let’s begin by discussing why a business plan is important for your business.
A business plan, however simple or complex, forms the backbone of every business. It clearly identifies various vital elements that could make a business successful and flourish further. A good business plan highlights the goals that any enterprise aims to achieve.
Unless you have a business plan, steering the business through its various ups and downs can prove extremely difficult. Whether you’re a one-man business or will have other partners and staff, a business plan defines the role of each player and their responsibilities.
And most importantly, a business plan also speaks about investment and returns.
Types of Business Plans
The above points are something that almost every business plan will contain. Understandably, there’re several more elements too, which we will discuss later in this article.
You might wonder about the different types of business plans that can be seen around the world. Therefore, I will provide a glimpse into these business plans.
- Business Plan to Attract Investments: These types of business plans are useful when seeking Venture Capital or crowdfunding to finance your startup. They show how investing in the startup would benefit both the financers or investors and customers or clients. These are very elaborate business plans and contain Resumes of startup owners and core leadership teams, market research and analytics, future projections, and lots more.
- Bank Loan Specific Business Plan: As the term suggests, such a business plan has a single purpose: to get a bank to provide loans or top-up existing credit facilities for expansion. When you apply for a business loan, the bank will want to make sure that you’ll be able to repay within the period. Such business plans also contain details of the business, Resumes of core leadership, future projections, credit scores of single or more owners, and repayment schedules.
- Business Plan for Government Funding: Some enterprises are eligible to get funding from a government or a specific department. Generally, these are businesses where you’ll require visas to operate in a foreign country, permits, and funding. Other than the key information about the owners and business model, these business plans should also mention how the venture would help the people, generate employment, and sometimes, exports.
- One-Page Business Plans: A one-page business plan is usually written as a precursor to a complex one. Or it can be written for a business in which you’ll invest your own money or with funds from your family. A simple, one-page business plan is usually to remind self about the objectives and other information that serves as a daily reminder to the owner.
Elements of a One Page Business Plan
Regardless of the type of business plan you’re writing, these are some essential points you’ll need to include. Obviously, the amount of information and its nature would depend upon the type of business plan.
However, as a rule, all business plans must include the following important elements that I have promised to mention. Here is the outline for a business plan:
- Synopsis of the business
- Owners & their experience/ skills
- Suggested investment amount
- Products or services the business would provide
- Target population
- Cost of the product or service
- Anticipated returns
- The time necessary for the business to make profits
- Growth projections
- Exit plan if the business flounders or fails
These are the top 10 essential elements to draft a superb business plan. Therefore, a one page business plan should also have a brief mention of all these.
Before you get down to writing that simple and perfect one page business plan, prepare all the information on these ten elements. That’s because we’ll have to merge two or more points under a single head. Remember that a one page business plan shouldn’t be incomplete because of its small size.
8 Easy Steps To Create A One Page Business Plan
Once you have the information ready, follow these simple steps to write a perfect one page business plan.
Step-1: Write Brief Synopsis of the Business
In just two or three sentences, summarize what your business is all about, its location, the nature of the business, and the goals it will try to achieve. Mention a clear reason why you and other partners, if any, are starting the business.
Step-2: Qualifications & Skills of Owners
The qualifications and skills of the business owners should be included in the second section of a one-page business plan. It is not necessary to mention specific names, but it is important to indicate the main owner's name, the number of partners or stakeholders, and an average number of years of experience and relevant educational qualifications.
Step 3: Capital or Investment
It is important to clearly state the financial contributions of each partner in a business plan. Specify the amount of money that each partner will invest, as well as their individual contributions and the percentage of ownership they will hold. This information is crucial for determining the distribution of profits.
Step 4: Products, Services & Market
In a one-page business plan, it is important to concisely state the products and services offered by the business, and the target customer base. Additionally, include a brief explanation of why the products or services will be in demand, and a pricing strategy.
Step 5: Returns and Growth
Now comes the time to write clearly about how much profits your business would actually be able to record within a year of operation. Be very realistic about this figure. Pitching for very high profits can prove disastrous because you’re not sure whether customers will welcome your business. Be optimistic but not overtly overconfident.
Step 6: Time & Future Plans
In this section, indicate the estimated time frame for the business to establish itself in the market and the plans for future growth. This information, which should be based on research, demonstrates a clear understanding of the market and a serious commitment to the business.
Step 7: Exit Plan
This isn’t really necessary for a one page business plan unless you’re asking for funding, investments, or loan. However, you need to have a clear idea of how you can stop this business and escape losses to yourself, investors, and lenders, should the business fail for any reason. This assures lenders and investors their money is in safe hands.
Step 8: Review & Amend
And finally, it’s also important to review and amend your one page business plan to make it perfect. That’s the main reason I’m asking you to do a lot of research and keep all relevant information handy. A one page business plan is concise and short. However, it shouldn’t be incomplete under any circumstances.
When you write that perfect one page business plan, imagine you’re writing it for own self. This tip helps you identify what elements are necessary and which ones aren’t all that important. A well written one page business plan can open doors to wealth by ensuring your business booms and flourishes.
What are the key components of an outline for a business plan?
A business plan should include, Owners & their qualifications, Proposed investment, Offered products/services, Target market, Price of products/services, Expected returns, Timeline to profitability, Expansion plans, and a Contingency plan in case of failure, etc.
What are the 3 C's of a business plan?
The three C's of a business plan are Company – outlining the company’s mission, vision, and goals, Customer – detailing the target customer base and how to reach them; and Competition – identifying competitors and analyzing their strengths and weaknesses.
What is the biggest mistake you can make when preparing a business plan?
The biggest mistake you can make when preparing a business plan is not researching the market and industry thoroughly. It's important to have a deep understanding of the competition, customer needs, and potential opportunities in order to create an effective business plan. Without this research, your plan may be unrealistic or overlook key elements that could make it successful.
Do and don'ts of a business plan?
Do: Make sure your business plan is clear, concise, and realistic. Research the industry you're entering and include data to support your ideas. Get feedback from experts in the field.
Don't: Don't forget to include financial projections and a budget. Don't be overly optimistic or underestimate the amount of work needed to make your plan successful. Don't forget to consider potential risks and how you will mitigate them.