Structuring A Business Plan

A business plan is a formal plan made my organisations when they are being setup; it explains the various functional aspects of a business

. A plan is usually written for two main purposes, one to guide the organisation once it commences different activities and two to present it to investors to getting funding. Ideally a business plan contains 6 different sections, customer or market segments, value or unique selling propositions, channels of distribution, customer relationship strategies, infrastructure and assets. Each of these 6 sections makes a formal business plan, the 6 areas and explained in detail, for the investors business plan the cost structure and revenue streams and explained more in-depth.

Customer or market segments are the groups on individual the company is planning on serving. These are different groups of people either customers or clients depending on the nature of work. Consumers need products or services, these could be either being individual people or other businesses, and the organisation needs to fulfil or satisfy the needs of this group. The product or service is usually delivered through a distribution channel. A customer relationship strategy needs to be planned; this is explained in-depth in the customer relationship strategy section of a business plan. Segments need to be defined, as marketing products and making products differ for each of these groups. They must be chosen carefully, the product must be useful for this segment, and this helps in increase profits. Different segments can be defined based on customer needs and preferences. Segments can be defined based on 4 major segment categories, mass market, and niche market, segmented and diversified.

Value or unique selling propositions describe the product or service in a nutshell; this is the reason through why consumers would buy the product or service. Products and services are created to target a need of a consumer, the unique selling proposition or USP are the benefits that the product offers over other products within a market. The unique selling proposition is the value proposition; it creates value for a market segment. Value could either be in terms of quality or quantity. Quality, in terms of services is the unique customer experience the organisation offers. The product could be new, something that wasn't previously offered to a target audience usually called an innovation. Performance of the product could be a value proposition. Take example a battery; the proposition might be that it is durable.

Channel of distribution needs to be explained, the methods through which the product or service would be delivered through. These could include sales and communication channels. Channels are the method through which a product or service is delivered to a customer. Communication helps in increasing awareness of a product or service the company offers. The USP is usually marketed to the customer or client depending on the kind of business. Channels help in maintaining a relationship with the customer, first they inform the consumer about the product or service, helps in the process of evaluation, helps in defining purchasing and delivering channels and the last stage would be to help with after sales service.

Customer relationship strategies need to be defined, this helps in interacting with different customer segments. Customer relationship strategies involve acquisition of new customers, reminding customer about the organisation and which in-turn helps in boosting sales of the product or service. Fostering a relationship with a customer is a must; this would motivate customers to purchase products. Certain companys value proposition could be to maintain and develop a good rapport with customer; here the customer relations department would contact clients or customers after buying a product or service.

Infrastructure and assets and required to run a business, depending on the kind of business there are different resources. Physical assets like office space, machines, distribution networks and vehicles used by the company. Human resource, hiring individuals to do skilled work in a business. Financial resources are needed, to pay salaries to hired individual, acquiring funding so that day-to-day activities can be done. Amenities need to be paid for, this are infrastructure costs. This part usually is in detail when it is sent across to investors.

A business plan should explain all these sections, this would help the organisation to perform better, and it also helps in identifying areas of growth. The last section of the business plan usually explains the advantages and disadvantages of the business; this section is explained in detail when it is sent to an investor.

by: Rodney Wincaster

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