Starting a business may seem highly glamorous, but do you know what it needs? A solid business plan.
While there may be entrepreneurs out there who have started businesses without planning, there is a high chance their ventures weren’t successful.
To get the ball rolling on your business, you need to know how to write a business plan. If you want to be successful, you need one that focuses on your goals, has a winning attitude, and is well organized.
Here is a step-by-step guide to help you write an effective business plan -
A business plan is a significant step in the success of a business. It establishes what your business is, what it wants to achieve and how you will get there.
Sadly, many companies fail due to poor planning.
Writing a business plan is the best way to state your goals and ultimately achieve them. Your business plan is your road map to managing and growing your company over time.
A business plan will help you evaluate the feasibility of your business idea, ensure you have an appropriate amount of capital, and provide direction to see your dream realized.
Writing a business plan may seem tedious, but it is necessary. If you are wondering whether you should write a business plan, here are compelling reasons why you should:
A strong business plan is one sure way to prove to yourself that your idea for a business is not just a dream but can be a viable reality.
Entrepreneurs are dreamers with vision, but even the most visionary entrepreneurs need to prove that their vision is not a fantasy but can be translated into a profitable reality.
Along with proving it to yourself, if you are seeking financing or investors, you will also have to provide proof that what you want to do has potential.
Another benefit of creating a solid business plan is that it forces entrepreneurs to set clear objectives and measurable benchmarks so they can track the progress of their venture and adjust their
A good business plan has clearly defined milestones that are aligned with both financial and non-financial goals.
You can measure these milestones over different periods (e.g., monthly, quarterly, or annually).
Starting any business has inherent risks. But writing a good business plan can help you mitigate those risks by preparing for them in advance.
For example, if your most considerable risk is competition, determine how you’ll stand out from competitors in your business plan and marketing strategy.
A business plan helps you look at the big picture of your company. This consists of setting milestones, tracking your progress, and giving potential investors an idea of what they can expect when investing in your company.
A well-written business plan can also help convince investors or lenders to finance your business.
Business plans are necessary evils. You need to write them for your business. But how do you get started? This step-by-step guide will help you write your business plan.
What is the first thing in a book after the cover page? The page of content or index. It lets the readers know about the sections in the book and what to expect.
Similarly, the executive summary is the first page of your business plan that gives a synopsis or summary.
Your executive summary should be 1–2 pages long, and it should include:
It’s just a part that highlights the points you’ve made in your business plan. It decides whether the reader will throw your business plan away or keep reading, so you better get it right.
Company description explains the elements of your business.
It is similar to an extended elevator pitch that can help readers and potential investors quickly understand the goal of your business and its unique proposition.
Include details about your mission statement, history/company story, and company objectives.
Every company has an underlying mission, whether to offer a superior service or dominate a market.
Your mission statement should briefly sum up what your company does and why you do it.
Include your vision for the future of the company, too. Will you plan on expanding or adding new services in the future? What do you see as the potential of your business?
Your history section can be as short or as long as you’d like it to be. Some companies start with a story about where they began and how far they’ve come.
Others are briefer and let potential investors know how long they’ve been in business and where they started.
This part is where you get to talk about your goals for the business. You should answer questions like:
These are your dreams, so feel free to shoot for the stars here! But also make them realistic enough that investors can buy into them.
Many entrepreneurs hate market research, but it’s an essential part of your business plan.
Market research aims to understand which segments of the market are profitable, how your business can provide value to them, and how your business can beat out the competition.
Some general tips to help you begin your research:
In your market research, you have to write down what your ideal potential customer will be like and mention your market's actual and potential size (with data & statistics).
Competitive research and analysis are critical for any business to stay competitive in a fast-moving world.
With so many companies vying for success, it can be challenging to track who’s doing what — let alone ensure that your business stays ahead of the game.
How should you do a competitive analysis for your business plan?
Understanding your market and its competition ensures you’re selling the right product in the right way, at the right price.
It also convinces potential investors of how you rank against your competitors.
This section of the business plan needs to define what products and services you offer. When describing products and services, you need to focus on:
Describe your products and services
Describe the specific products and services you offer. Include a list of product features, benefits to buyers, and any new products you plan to introduce.
Explain the manufacturing process
Describe the materials or equipment that your business uses in the manufacturing process.
Outline the stages of production and the steps required to deliver your product or service to customers.
If applicable, be sure to include information on any patents or copyrights for your products.
Define the product life cycle
Explain how your product will be manufactured, distributed, and supported as it progresses through its life cycle, from introduction to growth, maturity, and decline.
Discuss how you will ensure that you offer the best possible value proposition to customers at each stage of the product life cycle.
Showcase how your product is better than competitors
Identify why your product is different from your competitors(USP). Explain how you can use those reasons to sell your product/services to the target audience.
The marketing and sales section is where you'll explain how you intend to entice customers to buy your product or service. You should include information about:
The marketing and sales plan section of your business plan details how you plan to reach your target market, how you plan to sell to those target markets, your pricing plan, and more.
Your company’s success is dependent on the type of team you have. You must include the team management section in your business plan. It will make your job much easier when managing the business. The Company and Management Summary of your business plan should include:
A financial plan is necessary to open a new business or run an existing business. It is an integral part of the business plan.
A financial plan is a detailed outline of how you intend to manage the money coming into your business, pay for expenses, and plan to make a profit.
If you are seeking funding, a financial plan will determine whether investors invest in your business.
What Does a Financial Plan Include?
Now that you know what aspects to focus on in your financial plan, the following steps will help you create a financial plan for your business:
In the appendix section of a typical business plan, you can include all the extra information you want readers to have. It can contain
As a business owner, you will have to write a business plan one day. While a business plan may not be necessary, you will need it if you face scenarios like these:.
A good business plan is about more than just laying out a blueprint for your company, its products, and its marketing. It can also be used to show potential investors what you're looking to achieve and how you're going to do it. Here are some tips on writing the best business plan possible
You may think this is obvious, but it's important to remember that people reading your business plan are likely busy.
They want to see facts and figures they can quickly skim through and understand without having to read lots of dense prose.
Your organization should be easy to understand, so create something that looks like an outline, so it's easier to scan and follow.
One of the most critical parts of any business plan is the financial forecast, which lays out the numbers for the coming years in terms of sales, expenses, and profits.
Make sure these figures make logical sense.
Before you write a business plan, research your industry, market, and competitors.
Start by researching online — everything from trade journals and newspapers to blogs and social media sites.
You can also interview industry experts — try getting in touch with universities and local associations for help. And don't forget to speak with current and former customers, too!
It's easy to get carried away thinking about all the fantastic things that can happen when you start your own business.
But first, you need to decide what you're going to write in your business plan. Have a clear goal and plan before you start writing.
When writing your business plan, ensure you know who will be reading it, whether they are investors, customers, or future team members.
Make sure you include all relevant information for that person or group of people without having too much unnecessary information.
When you think you have finished the first draft, proofread the entire thing again. It might be best to get another pair of eyes on this as well.
You can write your business plan by following these steps:
The primary purpose of a business plan is to get funding from potential investors. Besides that, a business plan is also a decision-making tool, a roadmap, and a creative way to determine your future financial needs.
When writing a business plan, four basic types are helpful for different situations.
There are 8 elements of a business plan- - Executive summary, Company description, Market analysis, Competitive analysis, Organization and management, Service or product line, Marketing and sales, Financial plan.
A business plan helps you organize your overall business objectives, but the marketing plan is what outlines how you are going to reach those goals.
The difference between a business plan and a marketing plan is that while the former focuses on profitability, the latter is based on reaching consumers and making sales.
A business plan helps you stay on track to achieve your goals and allows you to troubleshoot along the way and create a document that champions your business' success.
So, rather than viewing the writing of a business plan as a tedious priority that you must complete as soon as possible, consider how a well-written business plan can serve as an essential tool for your company’s future success.
We hope this article will be of use to you. Keep in mind that each business is unique and will require a personalized and unique business plan.