Business plan

What is a business plan and how to write one | Bargain hunting

If you are considering starting a business, one of your first steps should be to write a business plan.

The goals of a business plan are guided by your business goals and should leave room for flexibility and future restructuring. Use these tips to get you started.

What is a business plan?

A business plan is a guide for your business to follow as it grows in size and complexity. Business plans include basic information about your business’ operational, financial, and marketing goals. Writing a business plan will include several key sections:

  • Summary: A summary of your business model, target market, products and services, and basic financial information.
  • Company presentation: An overview of your company’s mission, location, legal structure and history.
  • Products and services: An explanation of the products and services offered by your company. This section should cover the problems you are solving for customers, target audiences, use cases, and pricing[FA(U1] .
  • Market analysis: An analysis of your value proposition, how you plan to reach your target market and where you fit in the competitive landscape.
  • Financial plan: An overview of your business tax details, including a balance sheet, cash flow statement and sales forecast. This section should also include a profit and loss statement.
  • Contact directory: An introduction to all key team members and an explanation of their roles. If applicable, list the chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), and other key management roles.

Why is a business plan important?

The specific steps in writing a business plan can help your business develop a strategy for long-term success. When starting a business, you should consider certain things, including:

  • Study your market
  • Develop a strategy
  • Save existing financial data
  • Organize your goals into a cohesive vision

If you are looking for financing or applying for a business loan, a business plan is essential. Banks, private investors, and venture capitalists all need to see a business plan to make funding decisions. These institutions want to know how your business plan will achieve its objectives and make their investments profitable.

Your business doesn’t have to follow the same plan in perpetuity – you can and should revise your model as needed. Benchmark your business plan against other major goals and your strategy throughout the year.

Types of business plans

Different business plans work for different business cases. Two of the most common types of business plans include:

  • Traditional business plan: This plan tends to be long and detailed. It includes all of the above sections plus information on the specific fundraising and human resource goals you hope to achieve. Traditional investors tend to ask for traditional business plans.
  • Lean business plan: This type of business plan is much shorter and only includes essential information. It should include partnerships, activities, resources, market, value proposition and distribution channels. A simplified business plan can also include your cost structure and revenue streams. Lean business plans are ideal for internal use.

5 Ways Companies Use Business Plans

Here are five ways companies typically use a business plan to help them develop and grow.

1. Assess feasibility

Business plans can be used to help examine the feasibility of a business idea or product. As you research your market, create a financial plan and analyze the numbers. By doing this you will develop a better idea of ​​what is needed to make a profit.

You should share your business plan with others for input, such as mentors, potential partners, or potential employees. If you can demonstrate that you have a plan for success, potential clients or investors may be more confident to work with you.

2. Understand the market

Understanding your customers and market dynamics is essential to running a successful business. The market analysis section of your business plan positions your business within the industry and among your competitors. For example, your business plan may explain how you intend to solve a persistent problem in a way that your competitors cannot.

To get to know your market better, you need to do a SWOT analysis, which represents strengths, weaknesses, opportunities, and threats. By digging deeper into your business goals, you can discover who your customers are and how you can best serve them. You can also assess where your business is likely to thrive and manage any perceived opportunities in advance.

3. Create milestones

It can be difficult to keep an eye on the overall strategic situation while running a business. Writing a business plan forces you to set aside your day-to-day tasks and think about your goals. In turn, setting milestones will help guide your business and give it a bigger purpose.

The milestones you create should be unique to your business. For example, your milestones might include reaching $1 million in revenue, expanding into a new region, or selling your business to a larger company.

4. Look for funding

Some businesses have all the capital they need to get started while others need outside financing. If you are applying for financing from a bank or a private investor, you will need a clear business plan that allows investors to assess how your business will earn money and grow.

Consider these business plan tips for common financial projections:

  • Cash Flow
  • Income statement
  • Break-even point projection
  • Pay
  • Expenses
  • Sales forecasts

Reposition the business

Few companies follow the same path throughout their activity. Issues such as market changes, new technologies and economic growth can force a change in direction.

When you need to reposition your business, referring to your initial business plan is essential. This will encourage you to analyze the market, consider different operating models, and experiment with new strategies.

Even as you continue to evolve your business strategies and goals, your business plan can guide your business through major changes and improve your chances of profitability.

Once your business plan is in motion, meet with your local investment banker to manage your available finances or see how a Chase business checking account might help.

For Informational/Educational Purposes Only: The opinions expressed in this article may differ from those of other employees and departments of JPMorgan Chase & Co. The opinions and strategies described may not be appropriate for everyone and may are not intended to be specific advice/recommendations for any individual. . The information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. You should carefully consider your needs and goals before making any decisions and consult with the appropriate professional(s). Prospects and past performance are not indicative of future results.

You should carefully consider your needs and goals before making any decisions and consult with the appropriate professional(s).

JPMorgan Chase Bank, NA Member FDIC. Equal Opportunity Lender, ©2022 JPMorgan Chase & Co.

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