Here is a detailed guide to write your Business Plan. It contains 8 steps. Follow each step carefully and write your Business Plan.
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A business plan is an important document that any business must have. Whether you are a start-up, or you are an established company, you need a business plan for understanding how your business is put together. Business plans guide owners, management and investors in every stage of a businesses lifecycle.
If you’re starting a business, a business plan is going to be the main source in figuring out how you begin, grow and develop your business.
A business plan is a written document, a roadmap, describing a company’s core business activities, objectives, and its plans to realize its goals.
Banks, venture capital firms or investors often ask for a viable business plan before considering providing capital or loan to businesses.
There are different kinds of business plans, each serve different purposes. Types of business plans include, but are not limited to:
- Startup Business Plans
- Internal Business Plans
- Strategic Business Plans
- Growth Business Plans
- Operations Business Plans
- Feasibility Business Plans
But then, here comes the question: How to write a business plan?
Don’t worry. It is a systematic process and can be done in some steps.
A business plan consists of some several sections, usually, of eight or nine sections. Let us have a look at these sections of a business plan to have a general understanding of its structure:
- Executive Summary
- Company Description
- Market Analysis
- Product or Services
- Marketing and Sales Strategy
- Organization and Management
- Financial Plan
- Appendix
Now, let us have a deeper look in each section and explain 8 steps on how to write a good business plan for your business:
Step-1: Write an Executive Summary
A good executive summary is one of the most crucial sections of your plan. It’s also the last section you should write. So, here is the tip: Write your executive summary after you have completed the entire business plan.
Executive summary is an overview of your business. It summarizes all the key information about your business in a few pages. It’s a high-level look at your whole business plan and it summarizes the other sections of your plan.
Keep it between 1 to 3 pages. Give the following information in the Executive Summary:
- The name and location of your business.
- Your business concept. What does your business do?
- What are your business goals and vision. What does your business want to do?
- What are your products or services? Which problem do they solve? Which need do they meet? Why are they different? What sets your business apart from your competitors?
- Who are your target customers? Who do you sell to? Why will they choose you?
- How do you plan to reach your customers? What will be your marketing strategy?
- A summary of your basic financial figures. What is your revenue and profits? What will it be in the future? Sales and profits projections for the next 3 or 5 years.
- A summary of your Business’s current stage.
- How much funding do you need? How will you use this Money?
- Who are included in your management team? How will they contribute to the Business?
Step-2: Write your Company description
Your company description is the place to present your strengths. In this section, you need to provide detailed information about your company.
Give your audience detailed information about:
- Your legal structure, location, history and background information if you’re already up and running.
- Your business’s vision, mission statement and value proposition
- Your business model
- Go into detail about the problems your business solves
- Your industry
- Business objectives, both short and long term
Step-3: Write your Market analysis:
In this step, you will have to define your ideal customer and the actual and potential size of your market.
You’ll need a good understanding of your industry outlook and target market.
For industry Outlook, you will need some industry statistics such as:
- Industry size
- Industry Dynamics
- Industry trends
- Market demand
- Economic indicators
- Market saturation
- Market growth
To define your target market and make a customer segmentation, you will need some of their information like:
- Location
- Income
- Age
- Gender
- Education
- Profession
- Hobbies
A competitive analysis is also needed to show you what other businesses are doing and what their strengths are. What do successful competitors do? Why does it work? Can you do it better?
Here is a simple process on how you can analyze your competition:
– Profile Your Competitors: Develop a basic profile of each of your current competitors.
and answer these questions about each one:
- What are their products and/or services?
- How do you compare your products and/or services with theirs?
- What are their main goals? What are they trying to achieve?
– What marketing strategies do they use? Look at their advertising, public relations, etc.
- How can you take market share away from their business?
– What are their strengths?
– What are their weaknesses?
It is also a good time to place your SWOT Analysis in this part of your Business Plan.
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats.
SWOT analysis is a strategic planning technique that enables you to assess your core strengths, weaknesses, opportunities, and threats.
Here is a simple process on how you can conduct your SWOT analysis:
Before starting, keep in mind: Strengths and Weaknesses are “internal” factors and depend on “your” existence and activities. They arise from situations inside your organization.
Opportunities and Threats are “external” factors which are independent from your existence and activities. They arise from situations outside your organization.
– List your business’s strengths: Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. It can be price or cost advantages, location of your business, your product/service quality, employees, capital, credit, existing customers, distribution channels, etc.
– List your business’s weaknesses: List things in your business that you consider to be weaknesses (that put your business at a disadvantage to others). Weaknesses can include increased costs, limited resources, absence of new products or clients, lack of expertise, lack of intellectual property, declining market share, poor location, etc.
– List potential opportunities for your business: List possible external opportunities for your business. Define what opportunities are open to you and what trends you can take advantage of. Finally, discuss on how you can turn your strengths into opportunities.
Some potential opportunities can include: growth in the industry and economy, changing government regulations for your advantage, new technology, partnerships, etc.
– List potential threats to your business: List possible external threats for your business. Describe what threats could harm you.
Some potential threats can include: shrink in the industry, slowdown in the economy, rise in supplier prices, unavailability of raw material, shifts in consumer behavior, new products or technologies, changing government regulations against your business, etc.
Now, you can use your strengths and minimize your weaknesses to take advantage of the opportunities and to overcome threats.
Try to overcome your weaknesses in order to take advantage of the opportunities
Step-4: Write your Product or Service Description
In this section, you need to describe what you sell or what service you offer and to which price.
Explain what your product or service does and how it functions.
Explain how it benefits your customers and what the product lifecycle looks like.
Give details about production, delivery and distribution processes.
Describe your Pricing structure.
Describe how your products or services are better than your competitors.
Explain any liability issues associated with the product, if applicable.
Step-5: Write your Marketing and Sales Strategy
It is very important to describe how you’ll attract and retain customers.
You also need to describe how your sales process works.
Your marketing plan should be supported by your financial projections.
With your budget in place, you can begin to define specific marketing strategies that will address your goals, reach your target audience and build your client base.
Each strategy should be related to a specific goal and should be made up of numerous actions.
After setting up your marketing strategies, you need to Develop an implementation schedule that shows which marketing actions will be done when and by whom. The schedule should also include the cost of each marketing action.
Some examples of marketing strategies are:
- Social media advertising,
- Search engine optimization,
- Word of mouth,
- Blogging,
- Print ads, flyers,
- Youtube videos,
- Webinars,
- Networking events,
- Radio, Television ads, etc.
Step-6: Organization and Management
Your business is only as good as the team that runs it.
Describe your audience how your management and team will be structured and who will run it.
Identify your team members, define who’s in charge of what and explain why they are the ones who can be successful in this organization. Highlight each person’s expertise, unique experience and qualifications.
Also, mention the roles you still need to hire to grow your company and the cost of hiring these roles.
You can also consider using an organizational chart to summarize the structure of your organization.
Step-7: Write your Financial Plan
The Financial Plan describes a business’s historical financial state (if applicable) and future financial projections. The financial section of a business plan is composed of:
- Assumptions used for projections,
- Three financial statements (income statement, cash flow statement, balance sheet) and projections made for these statements,
- Break-even analysis,
- Funding request,
- Exit strategy
- The statement of shareholders’ equity should also be included to give a brief idea about company’s ownership and equity structure.
If your business is already established, include income statements, balance sheets, and cash flow statements for the last three years.
If you are just starting up, include your start-up expenses and assets to fund.
Provide a prospective financial outlook for the next three to five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets.
For the first year make monthly projections.
This is the ideal place to use graphs and charts.
For more information about how to write the financial section of your business plan, click this link: https://www.peakplans.co/post/how-to-write-the-financial-section-of-your-business-plan
Step-8: Appendix
Finally, this is the last section of your business plan. Use your appendix to provide supporting documents or other materials. Common items to include are financial statements, charts, schedules, assumptions, credit histories, resumes, product pictures, letters of reference, licenses, permits, patents, legal documents, and other contracts.
Visit us at www.peakplans.co if you need a professional assistance in writing your Business Plan or Pitch Deck. We are Business Plan and Pitch Deck consultants and it’s our pleasure to help you through your way in every stage of your Business.