A good business plan requires the following 4 strategic planning processes:
Market Research
You need to conduct considerable research in the following areas:
- Customer Research: learning about who your target customers are and their wants and needs
- Industry Research: identifying the size of your market and trends affecting it
- Competitive Research: figuring out your direct and indirect competitors and the strengths and weaknesses of each
- Financial Research: in-depth understanding of realistic growth rates and costs (salaries, etc.) so a realistic financial model can be created
Strategy
Armed with the market analysis, you need to create the optimal growth strategies for your company. For example, if you identified an unmet customer need in your research, you should create strategies to capitalize on this opportunity.
Financial Modeling
Your financial modeling is perhaps the most important part of your plan. This section includes a projected income statement, cash flow statement and balance sheet. Poorly reasoned financial models will dissuade most investors. Worse yet, if your financial forecasting calls for too much or too little funding, it will cost you dearly.
Business Plan Writing
The fourth aspect of a solid business plan is writing. While it’s important to be a good business writer, even more important is to understand the needs of the audience. For example, the world’s best writer probably hasn’t spent much time with venture capital firms. As a result, they have no idea what this audience wants, and would probably fail to write a professional plan that appealed to them.
The fully customized business plan should also include the following essential elements:
- Executive Summary
- Company Overview
- Industry Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Plan
- Appendix