Is a business idea churning in your mind that you think will create a great impact in the world? If you are a small business owner or someone who has made the decision to become your own boss, your first step is to transfer your ideas into a business plan.
Your business will reach the zenith of success only with a solid and full plan and how well you can articulate your business idea in your initial days.
This is how you build the solid foundation of any business that everybody talks about! For beginners, writing a business plan may seem intimidating and daunting. But, if you follow certain steps, this task will not seem as difficult as you perceive it to be.
Don’t have an idea what a business plan is and how to write one? You do not need to worry anymore because you have made it to the perfect article where you will get the complete guide of what a business plan entails and how to create the perfect business plan.
Before delving into how to write a business plan, you need to understand what a business plan is. Continue reading to know more!
1. What Is A Business Plan?
A business plan can be defined as the most important document of your startup business that entails the goals of your business and also outlines how you would achieve those goals.
A business plan will further have all of the information related to the finance, direction that you will follow, your team and departments as well as the future of your business.
This document will bring your dreams and visions related to your business into fruition and will prove to you and the investors that your business ideas and thoughts do have weightage and power.
A business plan can be created for the potential investors who might be interested to invest in your company, for a bidding ceremony where you can raise capital or it can also be created for your teams so that they can be on the same boat and get proper direction.
Your business plan will help investors to learn about the vision and mission of your business. How you articulate your ideas will determine whether investors would want to invest in your idea or not.
The business plan is benefical for the owners as well because it will help the owners to stay on track so that they can meet their goals and take necessary actions accordingly.
Talking about the advantages of a business plan, let us now look at how a business plan will help you to achieve success.
2. How A Business Plan Will Help You To Succeed
The below points will tell you how a business plan can help you succeed:
It assists in the growth of your business and to get a grip of your goals
Think about it in this way, If you do not have a proper business plan where your goals and missions are set, tracking improvements or making any adjustments will be difficult.
That business plan will be like a data source that you can refer to at any time while making important updates to your plan in the future.
It is like a roadmap that will tell you which path you are taking currently and how it has impacted the goal in the present moment.
To get funds and pitch your idea perfectly
For obvious reasons, your potential investors need to understand the path of your business.
You need to present your business plan in a way so that they know that the solution you are running after is attainable and that the strategy to achieve it is strong and promising. It will also determine whether your business will gain profits.
You need to provide a proper financial structure as well as a practical explanation of your business model. All these factors should connect with each other to form a perfect business plan.
To understand the niche of your market
You definitely already know about the type of audience you are going to target with your product or service.
Still, if you do not have a proper business plan, you will get confused about how to enter the marketplace, the challenges you will need to overcome, and how to set your priorities accordingly.
Thus the first step to writing a business plan is to research the market properly. This will help you get a better understanding of how you can attract your target audience, what they want, the problems they face, how much they would pay to use your service/product, and learn about the other companies who provide the same service as yours.
Now that you know the importance and impact of a business plan, it is now time to turn your thoughts into words. Let us learn how to start writing any business plan.
3. What Are The First Steps Of Writing A Business Plan?
Starting to write a business plan can seem the hardest and may also feel overwhelming.
The steps given below will eliminate your fears and will help you kick start writing your business plan:
Recognize the reason for writing the business plan
Before you start writing and formulating your business plan, you need to be clear about who and what you will be targeting with your business plan.
For example, is it for your investors or just to create a framework that will help you to meet specific goals.
Determine the scale of the practicality of your business plan
In the initial days, you need to keep the business goals practical and your business plan should reflect that.
Thus, before you start writing your business plan, measure the practical nature of your business plan.
While it is good to stay optimistic, you should be mindful of whether the goals are realistic or not.
Jot down the goals and mission of your business
The goal and mission of your business is the main reason behind why you started the business in the first place.
Deciding on the goals will give you direction, and setting the objectives accordingly will draw a roadmap of how you can reach your business goals.
You need to get your goals ready before you start writing your plan, so that you can create the objectives according to the goals.
Determine the weakness and challenges
While setting the goals falls under the top priority, you should also keep in mind the weak spots and the challenges and threats you might come across on your journey.
You need to give equal importance to the weaknesses and threats along with the strengths of your business.
When you are done analysing all these aspects, you are ready to finally start to write your business plan.
Now that the first steps are clear, you might be wondering about how to write the business plan and the various components that you need to include in it. Continue reading the next section to know more!
4. What are the various sections of a business plan and how to write each one of them?
The format of your business plan will completely depend on you and the type of business.
There is no hard-and-fast rule that you need to follow. Nonetheless, there are a few important elements that you need to include in your business plan.
You can find below the information on how to write every section of a business plan:
The title page
The very first page that any investor or team member will see is the title page. The page will include:
Your company name and logo
Names of the business owners
Date when the plan was created
You should always start your business plan with the executive summary. It should be compelling in a way that will attract the reader to turn over the pages and show interest in your company.
It contains the overview of your business idea and other information that you have included in your business plan. Thus, you should always write your executive summary at the end. Your executive summary should not extend more than a page.
These are the points that your executive summary must have:
The problems that your products and services will solve
The vision statement of your goals and objectives (briefly)
The list of products and services you would offer
Description of who your target audience and market is and also how your services are different than the already existing ones
Mention shortly about your competitors
Funding requirements and where those funds will be utilised.
Description of the company
Just as the name suggests, this section will have all the details of your business.
Those details will include the purpose of your business, a vision statement, goals, the history of your business (how it was formed and how it started), framework, and the location of your main office.
You also need to include the type of business - wholesale, retail, manufacturing, or service provider and also the list of licences, permits, and even domain names that you have applied for.
Products and services that your company provides
Next, you need to mention the list of products and services that your business will provide.
Along with the list, you should also mention how your products differ from the pre-existing products that other companies are selling, what the demands will be, at what cost each product will be delivered, etc.
As your products and services will solve a particular problem, you need to mention how your products and services will solve the problem and in what ways.
This section is one of the most important sections of the business plan as it will give you a deeper insight into your niche market.
You need to invest a lot of time in researching for this section. It will entail:
Now that you have a clear understanding of your market that includes your customers and competitors, you need to create and state the marketing plan that you made in accordance with the market analysis you did in the previous section.
Your marketing plan should entail:
Your business objective
Your product/service distribution plan: the mode that your customers will follow to buy your products (store, website, or via retailers)
The positioning of your business in the industry and the price to bear that position
Marketing strategies to reach your business objectives
The timeline of your future - what you will achieve in the next six to twelve months?
The total budget you need for the marketing of your products and services.
This section is usually skipped by many people but it is considered to be one of the most fundamental components of a business plan that an investor looks for.
It will show who is in charge and the other team members involved in the company. It tells about how your company will be managed and the names of owners, the positions of different members, the duties and responsibilities, and the salary structure of each position.
The operations plan is the things and facilities you would require to provide the services to your audience and run the business.
This section is completely dependent on the type of business but you must include the information about these things:
The suppliers and what they will supply
Types of equipment to create your products that could include photocopy machines, computers, etc.
The requirements of your staff
The impact of the business relationships with vendors and suppliers
The number of hours your office will be open
The communication system through which your audience can connect with you, should they have any query
The options of payment methods that your customers will have.
This is the section where several startup business owners get confused and sometimes even get intimidated.
A solid financial plan is required if you seek investment by ‘outside’ investors or getting a bank loan. It also helps you to achieve business goals and bring in success.
Include these in your financial plan:
The revenue model - that will tell the different revenue areas
The financial reports like balance sheets, profit and loss, operating expenses, etc
The funds you need to run the business
How you will utilise the funds that you will receive
An exit strategy only if you want equity funding
It is an obvious fact that as the days go by, your business will grow as well. Thus, do not forget to keep updating your business plan in every step of your growth.
The business plan is more than just a mere document to get funding, it is actually the path your business needs to follow to be successful.
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