Is a business idea churning in your mind? If so, you will need a business plan to put your thoughts on paper.
Your business will reach the zenith of success only with a solid and complete plan and how well you can articulate your business idea.
For beginners, writing a business plan may seem intimidating and daunting. But, if you follow specific steps, this task will seem more straightforward than you may think.
In this blog, you will learn what a business plan entails, how to create one, and much more.
Before delving into how to write a business plan, you need to understand what a business plan is. Continue reading.
1. What Is A Business Plan?
A business plan is the essential document of a startup business that entails the business's goals and outlines how to achieve those goals.
A business plan will further have all the information related to finance, the direction you will follow, your team and departments, and the future of your business.
This document will bring your dreams and visions about your business to fruition and prove to you and the investors that your business ideas and thoughts have weight and power.
You might need a business plan for potential investors interested in investing in your company. Or for a bidding ceremony where you can raise capital, or it can also be created for your teams so they can be in the same boat and get proper direction.
Your business plan will help investors learn about your business's vision and mission. How you articulate your ideas will determine whether investors want to invest in your idea.
The business plan is also beneficial for the owners because it will help them stay on track to 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 Gets A Grip on Your Goals
Think about it this way, If you have a proper business plan where your goals and missions are set, tracking improvements or making adjustments will be easy.
That business plan will be like a data source that you can refer to at any time while making essential 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 solid and promising. It will also determine whether your business will gain profits.
You must provide a proper financial structure and a practical business model explanation. All these factors should connect to form a perfect business plan.
To Understand The Niche of Your Market
You already know the type of audience you will target with your product or service.
If you have a proper business plan, you will get clarity 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 properly researching the market. This will help you better understand how you can attract your target audience, 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 a business plan's importance and impact, it is 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?
Writing 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:
Recognise 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 to create a framework that will help you to meet specific goals?
Determine The Scale of The Practicality of Your Business Plan
You must keep the business goals practical in the initial days, 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.
Jot Down The Goals And Mission of Your Business
The goal and mission of your business are the main reason you started the company in the first place.
Deciding on the goals will give you direction, and setting the objectives will draw a roadmap for reaching 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 goals falls under the top priority, you should also consider the weak spots and the challenges and threats you might encounter on your journey.
You must give equal importance to your weaknesses and threats and your business's strengths.
After analysing all these aspects, you are finally ready to start writing your business plan.
Now that the first steps are clear, you might wonder how to write the business plan and the components you need to include. Continue reading the next section to know more!
4. What Are The Various Sections of A Business Plan And Gow To Write Each One of Them?
The format of your business plan will entirely 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 crucial 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 the following:
Your company name and logo
Names of the business owners
Date (when you wrote the business plan)
You should always start your business plan with the executive summary. It should be compelling to 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 you have included in your business plan. Thus, you should always write your executive summary at the end. Your executive summary should be a page at maximum.
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
Target audience and market description and also how your services are different than the already existing ones
Mention shortly about your competitors
Funding requirements and how you utilise those funds
Description of The Company
As the name suggests, this section will have all your business details.
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), the framework, and the location of your main office.
You must also include the type of business - wholesale, retail, manufacturing, or service provider- and the list of licences, permits, and even domain names 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.
You should also mention how your products differ from the pre-existing products that other companies are selling, the demands, and the cost of each product.
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 critical 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 this section. It will entail the following:
Now that you clearly understand your market, including your customers and competitors, you need to create and state the marketing plan you made per the market analysis you did in the previous section.
Your marketing plan should entail the following:
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 will you achieve in the next six to twelve months?
The total budget you need for the marketing of your products and services.
Many people skip this section, but it is considered 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 shows how you manage your company, the owner's names, 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 entirely 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 could include photocopiers, 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 where several startup business owners get confused and sometimes even intimidated.
A solid financial plan is required if you seek investment from 'outside' investors or get 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 will you 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, remember to keep updating your business plan at every step of your growth.
The business plan is more than just a mere document to get funding. It is the path your business needs to follow to be successful.
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