A good business plan guides you through each stage of starting and managing your business. But, how to write a business plan?
You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.Your business plan is the tool you’ll use to convince people that working with you
Learn how to write a business plan quickly and efficiently.
Importance of a Business Plan
A business plan is a very important and strategic tool for entrepreneurs. A good business plan not only helps entrepreneurs focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve short-term and long-term objectives. Benjamin Franklin once said, “If you fail to plan, you are planning to fail.”
While a business plan is essential to entrepreneurship, not every entrepreneur sees the need for one. Many are reluctant to have their plan written down and there are numerous articles online claiming that the business plan is dead or irrelevant. Of course, not everyone agrees with that. A large number of business funding experts support the idea that having a good business plan is not enough. Even excellent business ideas can be useless if you cannot formulate, execute and implement a strategic plan to make your business idea work. If you are looking to raise funds from institutional investors and lenders, keep in mind that having a good business plan is extremely valuable. You should aim to have a well-documented plan that speaks for itself. It needs to be clear and easy to read and understand.
Guide to write a business plan :
Investing of the Business
Before anyone makes a decision to invest in business, they should be able to answer the question, “What does it mean to invest?” Investments are assets or items that are purchased with the goal of creating more income or appreciating in value. They are a purchase made not for the present but to be useful in the future. An investment is always purchased with the hope that its future payoff will exceed its original cost.
Business investment specifically refers to accounting assets that are purchased in the hope of making money on their own, as opposed to something like a delivery car for a restaurant. The difference is that a delivery car will help make the business more profitable, but the restaurateur is unlikely to be paid back for the vehicle itself.
Set main objects and goal of Business
The business objective is a goal, where the business wants to reach in the future. For example, a business wants to set up its franchise in another state in the next 3 years or it wants to increase its workforce in the coming months.
Business needs objectives, without objectives the business is like a car without headlights driving blind. Objectives of business are the purpose for which the business is established and performed. We can call objectives the cornerstone of every business.
Objectives are needed in every area where performance and results directly affect the survival and prosperity of a business. The right choice of objectives is critical for the success of the business. The objectives of a business can be classified into two main categories, which are
- Economic objectives
- Social objectives
Set mission statement of Business
A mission statement articulates a company’s purpose. It announces to the world at large why your company exists. Every business should have a mission statement as a way of unifying the organization.
You can think of a mission statement as a combination of what your business or nonprofit does and how and why it does it, expressed in a way that encapsulates the values that are important to you. It can be a challenge to clearly and concisely bring these ideas together, though.
Research takes up twice as much time as you would need to write your business plan. Research as much as you can about the market and your product or service.
Evaluate what you have researched and then spend more time researching.
If you want to write the perfect business plan, you must know everything about the product, your company, the market, and the competition. You must know everything about not only your company but also the market you are trying to enter.
Talk to industry experts and your audience to start your journey of writing a business plan successfully.
Purpose of the Plan
A detailed plan will help you as the owner and founder to manage your business effectively. Writing down and illustrating both your ideas and tactics will establish a path and course of action, akin to a road map. This will give you something concrete by which to monitor and assess the progress you make.
It may seem like an odd suggestion but you should look to work with your accountant on this task even at an early stage. Why? Well, a quality professional advisor will have helped many early stage businesses. Given how close a good accountant is to the operations and strategic direction of a company, they’ll be able to draw upon their experience of what’s worked and what hasn’t with other clients.
Write an Executive Summary
An executive summary of a business plan is an overview. Its purpose is to summarize the key points of a document for its readers, saving them time and preparing them for the upcoming content.
Think of the executive summary as an advance organizer for the reader. Above all else, it must be clear and concise. But it also has to entice the reader to read the rest of the business plan.
This is why the executive summary is often called the most important part of the business plan. If it doesn’t capture the reader’s attention, the plan will be set aside unread – a disaster if you’ve written your business plan as part of an attempt to get money to start your new business.Getting startup money is not the only reason to write a business plan; there are other just-as-important reasons.
Write an Overview of the Company
A company overview (also known as company information or a company summary) is an essential part of a business plan. It’s an overview of the most important points about your company—your history, management team, location, mission statement and legal structure. It usually appears after the executive summary in your business plan.
This is typically the shortest chapter of a business plan document, but that doesn’t reduce its importance. If you’re presenting this plan to people outside of your company, this is your opportunity to introduce yourself and your business, and you are going to want to put your best foot forward.
Imagine that the person reading your business plan document has never heard of you, and doesn’t know anything about your business.
Analyze Your Market
A key part of any business plan is market analysis. This section needs to demonstrate both your expertise in your particular market and the attractiveness of the market from a financial standpoint.
This article first looks at what we mean exactly by market analysis before looking at how to make a good one for your business plan.
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation.
Products and Services
Once you have described your organizational and management structure in detail, the next step is to write about your products and services. This is the section that will give investors and lenders information about your products and services and their position in the market.
Here’s what this section should contain:
- A description of your services and products
- Information about the current status of your products
- Product research and development goals
- Intellectual property
- Sourcing and fulfillment
You must invest a lot of time and effort in this section. After all, this is the section that highlights the core of your business.
A marketing plan is a strategic roadmap that businesses use to organize, execute, and track their marketing strategy over a given time period. Marketing plans can include separate marketing strategies for the various marketing teams across the company, but all of them work toward the same business goals.
The purpose of a marketing plan is to write down your tactics and strategies in an organized fashion. This will help keep you on track, and measure the success of your campaigns.
A sales plan is a strategy that sets out sales targets and tactics for your business and identifies the steps you will take to meet your targets and handle your business the right way.
A sales plan will help you:
- define a set of sales targets for your business
- choose sales strategies that are suited to your target market
- identify sales tactics for your sales team
- activate, motivate and focus your sales team
- budget and clarify steps you’ll take to achieve your targets
- review your goals periodically and improve your approaches to sales.
A sales plan sits within, or alongside, a marketing plan to direct the efforts of your sales team.
Financial Plan & Projections
When you develop a business plan, financial projections and cash flow analysis are among the most critical elements. New and existing businesses that need financing will have to demonstrate the profit potential of the enterprise in order to convince a lender to provide needed funding.
Unless you’re thinking of starting a religious or charitable organization, the primary reason you’re starting a business is because you think you can make money. The drive to be your own boss might have caused you to quit being an employee and start your business, but the quest for income is what keeps it going. When you develop a business plan, financial projections and cash flow analysis are among the most critical elements.
Make the Business Plan Adaptable
People make business plans for all sorts of reasons — to attract funding, evaluate future growth, build partnerships, or guide development. Unfortunately, the vast majority of these plans are usually out of date by the time the printer ink dries. Business moves fast: the product’s features morph, new competitors emerge, or the economic climate shifts. When these changes occur, many people just throw their business plans out the window. For a plan to be truly valuable it needs to evolve with your company and stay relevant in the face of uncertainty.
Show Your Passion and Dedication
Your business plan should reflect your dedication and passion for your business and your plan. It should describe your values and mention the problems that you are hoping to resolve. It should establish why and how you are different from all the competitors out there.
Now that you know the steps to write a business plan, you must also know that not all business plans are alike. You will need to create a different business plan if you are planning to create a startup and a different business plan if you are looking for loans and funding for an already established business.
Start your Business
After considering all the steps written above you can now start a business.
Business planning is a continuous process that can help you validate your idea, set goals, manage, and successfully pitch your business. If you’re not sure where to start, this blog can be very helpful to you.