Writing a business plan can seem very hard if you’ve never done it before. However, it’s something you can’t afford to ignore. Having a good business plan is crucial to your business.
In this article, you will learn about every stage of writing a business plan that will actually help you achieve your goals.
- What is Business Plan?
- The Type of Business Plan
- What Are the Benefits of a Business Plan?
- How to Write a Business Plan?
- 1.The basic structure
- 2. Format Your Document Correctly
- 3.Your Company Description
- 4. Your Market Analysis
- 5. Organizational Structure and Management of Your Company
- 6. Describe your Product or Service
- 7. Your Marketing and Sales Strategy
- 8. Make a Funding Request
- 9. The Executive Summary
- 10. Include an Appendix
- 11. Revise and Edit
- 12. Create a Cover Page
What is the Business Plan?
It is like a road map that provides directions, therefore a business can plan its future and also helps it avoid bumps in the road.
A description of your business’s future is a business plan. The business plan explains what you plan to do and how you plan to do it. If you write a paragraph on the back of an envelope and describing your business strategy, you’ve written a plan.
If you spend time to make your business plan thorough and accurate and try to keep it up-to-date, it is an investment that pays big benefits in the long term.
The Type of Business Plan
There are six types of business plans, but they are not limited to these categories:
- Start-Up Business Plans
This type of business plan typically includes sections describing:
- The company
- Your product or service
- Market evaluations
- Your projected management team
- Internal Business Plans
This types of plans target a specific audience within the business and will describe
- The current state of the company (operational costs and profitability)
- Calculate if and how the business will repay any capital needed for the project
- Project marketing
- Market analysis (target demographics, size of the market and the market’s positive effect on the company income)
- Strategic Business Plans
The strategic plan structure differs from company to company and provides:
- A high-level view of a company’s goals and ways to achieve them
- Business vision
- Mission statement
- Definition of critical success factors
- Strategies for achieving objectives and an implementation schedule.
- Brings all levels of the business into the big picture
- Inspiring employees to work together to create a successful culmination to the company’s goals.
- Feasibility Business Plans
This plan will answer two primary questions about a proposed business venture:
- Who will purchase the product or service a company wants to sell?
- Can the venture turn a profit?
- Operations Business Plans
They are internal plans that consist
- Elements related to company operations
- Specify implementation markers and deadlines for the coming year
- Determine the employees’ responsibilities.
- Growth Business Plans
- Growth plans are in-depth descriptions of proposed growth and are for internal or external purposes. If your company growth requires investment, therefore this plan may include:
- Complete descriptions of the company
- Management and officers of the company
- Full details of the company to satisfy potential investors
If a growth plan needs no capital:
- Financial sales
- Expense projections
What Are the Benefits of a Business Plan?
These are the top ten benefits of a business plan:
- See the whole business
- You can see sales are connected to your sales and marketing expenses
- Show the relation between your products and your target market
- Demonstrate covering costs including long-term fixed costs, product development, and working capital needs as well
- Strategic Focus
Small businesses and startups need to focus on their target markets, special identities and their products or services tailored to match.
- Set priorities
Write a business plan that helps you keep track of the right and important things. Assign your time, effort, and resources strategically.
- Manage change
You regularly review track progress, assumptions and catch new developments so you can adjust.
- Develop accountability
A business plan is a tool for a regular review of what’s expected and what happened. Good work and Disappointments show up.
- Manage cash
It shows your business cash flow. Sometimes just watching profits is enough. cash flow takes planning and management when sales on account, physical products, purchasing assets, or repaying debts are involved.
- Strategic alignment
Does your daily work fit with your main business tactics? Do those tactics match your strategy? If your answers are yes, you have strategic alignment. If not, write a business plan will bring up the hidden mismatches.
We work better when we have visible goals, therefore a good business plan sets milestones you can work towards.
Use your business planning to define and track the key metrics and put your performance indicators to track into a business plan where you can see them monthly.
- Realistic regular reminders to keep on track
The business plan is a regular reminder. We want to do everything for our customers, but we need to push back to maintain quality and strategic focus.
How to Write a Business Plan?
1. The basic structure
It is crucial to know the basic elements of a business plan
- The first element of a business plan is the business concept
In this element, you need to focus on the description of your business, your market and products, and its organizational structure and management.
- The second major element of a business plan is the market analysis
You need to know about your customer demographics, preferences, needs, buying behavior, as well as the competition.
- The third component of the business plan is the financial analysis
This will consist of projected cash flows, capital expenditures, and the balance sheet if you are a new business.
If you don’t know about business or financial education, it is a good idea to enlist the help of an accountant to assist with the financial analysis portion of the plan.
2. Format Your Document Correctly
Try to using format section titles in the Roman Numeral order. For example, I, II, III, and so on.
As you know, the first section is technically known as the “Executive Summary” which gives an official overview of your business.
3.Your Company Description
Write about your business and identify the marketplace needs for your product.
For Instance, if a small coffee shop is your business, your description maybe something like, “Daniel’s coffee shop is small, and located downtown, serve premium brewed coffee and fresh baking in a relaxed environment. Daniel’s coffee is located near the local University and aims to provide a comfortable environment for professors, students, and downtown employees to study, socialize, or relax between meetings or classes. Daniel’s coffee will differentiate itself from its peers, by focusing on excellent ambiance, close location, premium products, and superb customer service.”
4. Your Market Analysis
In this section, you must explore and demonstrate knowledge of the market your business is operating within.
- Who is your target market?
- What are their needs and preferences?
- How old are they?
- Where are they located?
Make sure to write a competitive analysis that provides research on immediate competitors. List the strengths and weaknesses of your main competitors and the potential impact on your business. This section is very important, as it outlines how your business will gain market share by capitalizing on the weaknesses of your competitors.
5. Organizational Structure and Management of Your Company
The business plan in this section focuses on key personnel. write details about the business owners and their management team.
Describe your team’s expertise and how decisions will be made. If the owners and managers of your business have extensive backgrounds in the industry or a track record of success, make sure to highlight it.
Include an organizational chart If you have.
6. Describe your Product or Service
- What is your business selling?
- What’s so good about your product or service?
- How will customers benefit?
- How is it better than your competitor’s products?
Write about your product’s life cycle.
For instance, if you are writing a plan for a small coffee shop, you would include a detailed menu that would outline all your products. Before writing the menu, you would write a short summary indicating why your menu sets your business apart from others.
You can write for example, “Our coffee shop will serve five different types of beverages, including coffee, smoothies, teas, soda’s, and hot chocolates. Our vast variety will be a key competitive advantage.
7. Your Marketing and Sales Strategy
In this section, explain how you want to penetrate the market, communicate with customers, manage growth and distribute your products.
Keep in mind, be clear in defining your sales strategy.
8. Make a Funding Request.
Write how much money you need to start and maintain your small business. write an itemized summary of how startup capital will be used. specify a timeline for your funding request.
Sometimes, you have to hire an accountant, lawyer, or other professional to accurately complete this step.
Financial statements must include:
- Forecast statements
- Balance sheets
- Cash-flow statements
- Profit and loss statements
- Expenditure budgets
You need to provide monthly and quarterly statements for one full year. Each year after that, yearly statements. These documents will be placed in your business plan’s appendix section.
9. The Executive Summary
Place this section at the beginning of your document and it will serve as an introduction to your business plan.
The executive summary will include the mission statement of your company and provide readers with an overview of your products, target market, and goals.
Existing businesses will focus on historical information about the company. Startups include industry analysis and their funding goal.
Startups and Existing businesses should highlight any main achievements, contracts, current or potential clients and summarize future plans.
10. Include an Appendix
This section provides additional information. Potential investors want to read this information before making a decision. The documents you put here must support claims made in other sections of the business plan.
This section includes:
- Financial statements
- Credit reports
- Business licenses
- Legal documents
- Bios/resumes for key personnel
- Elaborate risk factors (outline the risk factors affecting your venture and your mitigation plans)
11. Revise and Edit
Remember, you must review your business plan for spelling and grammatical errors and do this several times before deciding on the final version.
If you are creating a presentation plan, rewrite content completely to ensure it works from the perspective of the reader.
To detect if any sentences do not flow together well, and find-out any grammatical mistakes, read your document aloud.
Give a copy to a colleague or trusted friend to proofread and provide feedback and to protect your business idea to go online and print a Non-Disclosure Agreement (NDA) for them to sign it.
12. Create a Cover Page
This section identifies your document and gives it artistic appeal. It also helps your document to stand out.
Your cover page should include:
You must put Business Plan words centered in large bold font, along with name, logo and contact information of your company. The key is Simplicity.
Write your business plan by following the steps in this article and ask us any questions about your business plan in the comments.