A business plan allows you to define, analyse, and understand every aspect of your business ranging from 20 to 50 pages, but all containing the same sections. This post goes over what a business plan is, why it's essential, and what information should be included to make your business plan work for you.
A business plan is a formal document that will be used as your guide when starting, maintaining, and growing your dropshipping business. This allows you to analyse every part of your business to ensure success.
In addition to helping guide you and your business, a business plan will be required if you want to obtain funding from a third-party source. This will include loans from banks or higher spending limits on credit cards you may already have. Either way, a good business plan will start you off in the right direction for success.
This summarises your business plan on one page and should include a little bit about yourself and the people in your company along with what your business has to offer and what separates you from the competition. The Executive Summary should stand as a separate document. This section will excite potential investors and lenders about your business’ potential.
The company description will include the company name, location, legal structure, tax ID numbers, licenses, permits, ownership information, number of employees, mission statement, and short and long-term goals. It should also include an overview of your industry, market, and competitors.
Products and Services
This section should explain what products you want to sell, how you will price products compared to your competitors, and production and delivery details.
This section includes the research you've done on your target customer base to show you have an understanding of your industry as well as analyse your competitors.
Marketing and Sales
This section should be used to outline the marketing and advertising strategies you intend to use to reach potential customers. Include rationalisations why your audience will buy your products or services and how you will reach them through marketing and advertising efforts.
Management and Organization
The management and organisation section will describe your legal business structure. It should also include condensed resumes for all the key members of your business.
If you are looking for a loan, this would be the section where you include the dollar amount you need, what you’re investing in, and how you see the return on your investment happening.
In the financial projections, this section is where you describe your projected revenue and expenses for the first three to five years of your business.
Plan. Include all financial information, from startup costs to balance sheets.
The financial section should outline:
a) The amount necessary to start or maintain the business
b) The amount needed over the next two, three, and even five years
c) Plans to use funds
d) Anticipated need for additional funding
e) Ongoing business expenses, including salaries, insurance costs, promotional
This section includes any documentation needed to supplement any of the sections of your business plan.
A SWOT analysis analyses your business's strengths, weaknesses, opportunities, and threats of your direct and indirect competitors. Demonstrate how you will gain a competitive edge against your competition.
Creating a business plan for your dropshipping business is the best way to evaluate and validate your business idea. It can also be an excellent tool for finding your business's strengths and weaknesses and is a valuable first step in starting your dropshipping business.