A business plan is an official plan describing the business, its services, products, and all other details required for success. A business plan will cover how the company generates revenue, staff, higher executives, financing, and operational model. Every new start-up has to have a strong and clear business plan to define the direction of the business.
That is why every business owner should know how to write a business plan. In this blog post, we will break down how to write a business plan into simple steps. So without further delay, let us dive in.
Steps of How to Write a business plan:
Brainstorm an Executive Summary:
The first and most important step in constructing your business plan is coming up with an executive summary. The executive summary aims to grab the investors’ attention by putting up an elevator pitch-style sentence to keep the interest of the investors. Your executive summary should communicate your business name, the product or services you are selling, and the marketplace you are entering.
Ask for Help:-
When writing an executive summary, always go for a few different options. Write a few executive summaries and get them reviewed by the thought partners to conclude which one is the best.
Define Your Company:
In this section of your business plan, address two basic questions: who are you, and what do you plan to do? With a company description, addressing these questions introduces why you are in business. It also reveals what you have going for and why the investors should bet on you.
In the company description, you should include these components:
- Your business structure (Are you a general partnership, incorporated company, sole proprietorship, or limited company?)
- Your industry.
- Your business model.
- Your business, mission, vision, and value proposition.
- History or background information on your business.
- Both short and long-term business objectives.
- Your team, including key resources and their compensation.
Conceive Your Business Goals:
When on the business journey, you should always return to your goals and evaluate where you are in meeting your underway targets and setting new goals to strive for.
Every business has two types of goals:
- Number-based Goals.
- Intangible Goals.
- Numbers-based Goals:-
For different sections of your business, the goals also differ. When establishing your business, you focus on profit and financial goals, but other goals are equally important for the business’s existence. These are associated with brand awareness and growth, such as hitting up to 10k followers across social media channels or boosting engagement rates.
Similarly, another goal can be to attract new investors or get grants if the business is non-profit. Setting revenue targets for business growth is desired to also make that happen.
- Intangible Goals:-
Goals unrelated to detectable numbers are significant as well. This can include perceiving your business’s advertisement to reach the public or getting client reviews. These goals are crucial for the direction you take your business and the future direction you will go for.
Market Analysis:
Now the next step in how to write a business plan is to perform a market analysis. Your business plan must understand your industry outlook and target market well. You will learn what other businesses do through competitive market research and their strengths. In the market analysis, look out for trends and themes. What do your successful competitors do? Why does it work? Can you do it? It is time to answer these questions.
Set Down your Products and Services:
In your business plan, your product or services will feature prominently in major areas. Providing a section outlining the pointers for interested investors is still vital. You can conclude more generic information on each product line if your services are many items. If your services or products are few, give additional information.
Develop Financial Plans:
The next step in how to write a business plan is developing the financial plan for the business. Apart from financial goals, you must have a budget and set your planned weekly, monthly, and annual spending. In budget making, you have to consider many different costs to take into account, such as operational costs.
- Business Operations Costs:-
In your budget, rent for your business is the first major cost. If your business is online, that cost will be utilized in purchasing the software or domain of your business maintenance.
Next on your list should be the marketing and sales costs. Spending money to ensure people know about your business is as important as making it functional. Read More.
- Other Costs:-
There is always room for disasters and other maintenance costs; unanticipated costs can come to your business anytime. It is crucial to note these possible costs in your financial plans so that you are not unaware.
Appendix:
In the Appendix of your business plan, provide supporting documents or other material. Common documents to include are resumes, credit histories, product images, letters of reference, permits, licenses, patents, legal documents, and other contracts.
Additional Tips:-
Here are some other tips for designing a business plan:
- Be Particular: The more particular you are about your business, the better. This covers your services, products, target markets, and competitive advantages.
- Be Realistic: Do not overestimate your potential and make promises you cannot keep.
- Be Concise: Ideally, you should keep your business plan under 20 pages.
- Get Feedback: Get Feedback from other business associates and experts to find areas of improvement and loopholes in your business plan.
The Bottom Line
A perfectly crafted business plan is the base for success in any venture. A business plan is your road map to guide you through your business’s intricacies and ensure you have a vivid vision of your destiny. Following the steps in our blog post, you can draft an effective business plan to apprehend your business’s essence.
So now that you have learned how to write a business plan, attract investors to your business. Remember, a strong business plan is the key to turning your entrepreneurial dreams into reality.