Do you want to raise funds or convince your banker? The development of a business plan is therefore a necessary step! But be careful, there are rules and a certain formalism to respect.
The business plan is a document of 20 to 30 pages at most. This document is to an entrepreneur what a compass is to a sailor.
The executive summary
It is necessary to make an executive summary of the business plan. Although this document should not exceed a maximum of 2-3 pages, it should be written carefully. The executive summary is the attractive overview of your business plan that appears at the beginning of it. This represents the first words that will be read by investors, bankers, or other partners and stakeholders. Its content must thus make people want to go further in reading your business plan. Your banker may not bother to read the whole document and you must therefore be able to convince him only with this summary.
The components of the business plan
You must first present the offer of products and/or services, the concept, its contribution, its objective, etc.
Then, it is important to carry out a market study. This will provide information on
- Market boundaries,
- Your target customers,
- Your competitors.
Here you should quantify the market, explain its evolution and provide information on the profile of your main customers. You will also need to be able to describe their needs accurately to assess whether your offer will meet their expectations. This information will prove that you know your customers well.
You also need to know who your direct and indirect competitors are, where they are located, what their strengths are, where you stand in comparison to them, how you are different from them.
Next, explain the company’s objectives and strategy. What are the objectives you want to achieve in terms of turnover within a given time frame? What is your sales strategy, communication strategy, production and distribution strategy for your products or services?
You should then introduce your team and the role each person plays, with an emphasis on the skills they have that are relevant to the project.
With regard to the legal aspects, it is essential to specify the legal form of your company. The investor may want to know if your company has already been incorporated and who the legal representatives are. If the distribution of capital has already been completed, information on shareholders should be included in this section.
In the next section, you should present the total amount of financing needs you would require in order to ensure the success of your project. In this part, you will need to provide information on the type of shares you offer to investors. This section will also contain the different hypotheses of your development plan.
Since entrepreneurship is not risk-free, you will need to analyze the risks in order to plan backup measures.
Finally, do not forget that an investor seeks to make a capital gain on his investment. After reaching his goal, he will want to sell his shares. It is therefore necessary to plan in advance the exit mode of investors.
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