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How to Write a Very Simple Business Plan in one Hour

Robert is an Agribusiness Consultant who studied Agribusiness Management

Business Plan

Business Plan

How to Write a Successful Business Plan

A lot of people nowadays are doing different businesses in small scale, medium scale and as well as on a large scale basis. Even though many people are doing different businesses, not everyone is able to get good profits as some businesses are struggling to overcome market challenges which could be solved through a business plan. This article aims at equipping you with a simple way to write a business plan which can be used to get business loans from money lenders and as well as act as a road map to your business. A simple business plan contains a brief information on executive summary, ownership structure, business objectives, mission, vision, SWOT analysis, investiment capital, a statement of profit or loss, target market, sales forecast, ratio analysis among others. This article will provide information on how to write these, in a simple way to produce a simple business plan in a few minutes which is clear and to the point. Firstly, let's define what a business plan is. A business plan is defined as a written document which act as a road map for your business and it is able to show what the business will do, how it will run, how it will be able to deal with any risk involved among others. Now let's start going through the sections which a simple business plan should have.

1. A simple executive summary

A simple business plan has a simple executive summary, which is able to provide simple but clear and brief information about your business. When providing the information in this section, make sure it is short and to the point. Make sure, your simple executive summary is able to answer or provide information on the following; the name of your business, what the business will be doing, where the business will be operated, who is the owner of the business and how many are involved, the source of funding for your business, total cost of capital, expected profit, target market or customers, sales forecast, how the business will be able to deal with challenges such as critical business risks among others. Make sure, the simple executive summary is able to give the reader a clear information on your business. An example of a simple executive summary of the cloth business could be, " 4 corner shop, is a sole proprietor form of business, which is registered under business registration act of 2000 and will be selling high quality youth clothes at a medium price in Malawi. The business has an investment capital of $1,500 and this money will be funded through a grant. The business is expected to generate expected monthly profit of $300 using a monthly sales forecast of $700. Since the 4corner shop, will be new in the business, it has done a proper market research and has discovered challenges which business owners who sale clothes are experiencing as well as the market gap with customers, which make them unable to be satisfied with the services they get and how they want such problems be solved. " Now you can see that this simple executive summary has answered several questions which a reader could ask and is able to provide a brief information on the business which a person will run. You can also see that a summary is able to provide information on how it is expected to overcome the risk as it has conducted a market research and is able to know the challenges which customers are experiencing at the market.

2. A simple ownership structure

Under this, you provide a brief information on who is the owner of the business and how many are involved. You also provide short information on whether the business is registered under the business registration act or not, as well as how the profits will be shared if it is a partnership form of business depending on how each one has contributed or depending on what you have agreed. This gives a reader a clear picture about the ownership of the business which you want to do as well as the information on wether it is a registered business or not. An example can be " 4coner shop, is a sole proprietorship form of business, which will be selling clothes and is registered under business registration act of 2000."

3. Business objectives

Under this you give a little information on what the business aim to achieve. Make sure each objective is simple, viable and will be able to be achieved and measured. The measurement is coming in because it will help you to assess as to whether your business objectives have been successfully achieved or not.

4. Mission statement

This gives a brief information on what the business wants to achieve and it has to be achievable and measurable.

5. Vision statement

This gives information on the state of business in future as well as how it will be able to overcome future challenges such as risks and it has to be achievable and measurable within a certain period of time.

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6. SWOT analysis

Under this you give information on the strength of your business as to why people will be buying your products as well as weaknesses of your business against your competitors in your industry. This section also provides a little information on available opportunities to your business as well as threats. When doing this, you mostly compare your business against your competitors.

7. Investment capital

Under this you give information on how much capital is available, as how it will use the capital to achieve your business goals. It also shows, the materials which you will buy and any spendings in your business. Make sure, a summation of them is equal to the available capital.

8. Cash flow statement

Under this, you give information on the sources of funding to your business, total sales, total expenses, the loans you obtain as well as their repayments among others. To come up with a simple cash flow, we use a simple equation which is, "total cash coming in minus total cash going out, is equal to cash flow at the end of a month or year. " Now on the cash coming in, you include, the cash at hand, and the cash which you obtain through loans or grants, any cash you get through sales and all other cash which comes into the business such as sales on credit collection. On the cash going out, you include all the cash, which will be going out of the business through any spendings such as on business expenses. You also include all loan repayments, which you have and were used to fund your business only.

9. Statement of profit or loss

Under this, you give a brief information on whether the business will be able to make profit or losses and this is done by calculating gross profit margin, profit before interest and tax as well as profit after tax. To calculate gross profit, you subtract total sales less total cost of goods sold. To calculate profit before tax, you take gross profit, less total expenses. To calculate profit after tax, you take profit before tax less the total cost on tax you pay.

10. Target market or customers

Under this, you give information on who, will be buying your business products. To perform well in business, it is good to have target customers who can be based on age or location, and we call this a market segment. An example of this, is selling youth clothes on people of age range 18 to 35 in Malawi.

11. Sales forecast

Under this, you give a little information on the expected monthly sales which will give you the expected profit. For better understanding, make sure you present this through bar charts.

12. Ratio analysis

Under this, you give information on different ratios which helps you to assess as whether your business is viable or not. Under this, you can calculate a liquidity ratio for example.
Having given in detail brief information which each section should have, now the next step is to start writing your simple business plan. Make sure, you use a computer Microsoft word for typing, the information in text form and for any calculations like cash flows, it works better with Microsoft excel. Make sure, you generate a table of contents at the end of your writing.

In conclusion, this article has given you information on how to write a simple business plan in one hour, which can be used to get the loan and as well be used as a road map for your business idea.

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