How to Write a Business Plan
Whether they are looking for funding or exploring new growth opportunities, small businesses need a solid business plan. A business plan template can come in handy here and help entrepreneurs with their business planning.
What to Include in Your Business Plan
Not all businesses invest too much time in creating a comprehensive plan in the initial phase. But most business owners find it helpful to take a step back, define their business idea and target market, identify their point of differentiation and chalk out the strategy to succeed.
A business plan template consists of many different elements. Whether it is a salon business plan or a farm business plan, it is important to address these different elements. And while it’s not crucial to include all elements, it is helpful to be concrete to create a successful business plan. Let’s take a closer look at these sections.
An executive summary forms the foundation of your business plan. It provides an overview of your business, your products, differentiators and financial projections. Most investors spend the maximum amount of time drilling down this section. The challenge is to provide the answers without going into a lot of detail.
Overview and Business Objectives
In this section, your business plan will describe who you are and what you plan to do with your business. A comprehensive business overview will help explain what makes you different. This section is also useful to provide your company overview. Who are your key team members? What value do they add? These are some questions that will be answered in this section.
This section describes the values that drive your business. It includes a mission statement that defines why your company exists. This statement has to be a short sentence that adequately conveys the core principle behind your business. To give an example, LinkedIn’s mission statement is connect the world’s professionals to make them more productive and successful.
The success of your company depends on your ability to understand the market. Where is your target market? What are their key concerns? What will prompt them to buy from you? These are some of the fundamental questions that will be answered in this section.
Organization and Management
This section will provide information on the organizational structure of your company. From an operational standpoint, it is important to have a legal structure that can help you in the future. Include information about your team and the management team.
Products and Services Offered
Although you would have included information about your products and services in the executive summary, this section will help you add more details. If you offer many products and services, you may provide more general information on your product lines. If you offer only a few products and services, providing detailed descriptions may be useful.
Your marketing and sales plan is a crucial element for many stakeholders: investors, employees and partners, to name a few. It should reflect your marketing strategy to promote your business and to ensure your products and services reach your target audience. Focus on highlighting your marketing efforts with an emphasis on the four key elements of marketing: product, pricing, promotion and place.
Analysis of Competitors
No matter how carefully you do your market analysis, you cannot succeed unless you keep a close eye on other businesses. This is important because it will help you identify your differentiator and gain competitive advantage in the long run. Given the importance of competitive analysis, it is a good idea to dig deep and identify your competitors’ leadership, history and products and services.
When you approach any investor for a business loan, they will look out for your financial business plan to understand how much money they can expect to make in the future. The business financial plan section will provide a clear overview of all finances involved in running your company. There are three major components that need to be included in this section: income statement, balance sheet and cash flow statement.
Future Business Plans for Development
While it is necessary to keep the present business goals in mind when you work on parts of a business plan, it is equally important to consider the future. What are your future business plans? Where would you like to take your company? How will you get there? These are important questions that you must try to answer so you can create a blueprint for your business’ future.
Logistics and Operations Summary
Getting your products and services to the finishing line is key to your success. To achieve this, you have to depend on many stakeholders such as suppliers and distributors. A small restaurant business plan is a good example of this as there are many logistics and operational requirements. This section will help you pinpoint key partners who will play a major role in getting your business off the ground. It will also create a solid supply chain that can work seamlessly when you are ready to sell.
In the management summary, describe how your business is structured, who is involved and the external resources. The idea here is to showcase the expertise of your team and your external business partners.
Since your business plan is supposed to be concise, you may find it tricky to include additional information. This is where including appendices may prove useful. You can add CVs of your team players, market research, legal documents and product information here. If for instance, you have a daycare business plan, make sure to include certifications and medical experience.
What is a Business Plan?
A business plan is a document that describes the business goals of a company and highlights its strategy to achieve its objectives. It outlines a business’ sales plan, financial and operational model and other key elements essential to its success.
Tips to Write an Amazing Business Plan
To create a good business plan, it is important to structure information. Here are some tips that will come in handy.
- Keep it concise: While there is a lot of information you may think is important, the plan has to be short and readable, preferably no longer than 20 pages.
- Provide supporting documentation: If you have documents that can make your business plan more compelling, consider adding them as appendices.
- Stay consistent: The document should have a consistent tone, messaging and style. It’s therefore good to proof it properly before finalizing.
- Avoid jargon: Do not include industry-specific jargons that make the document unreadable. Be straightforward and try to explain yourself in the simplest way possible.
- Be clear about your goal: Where do you see this plan being used? Is this something you want to create for your team or do you plan on taking this to potential investors? Based on your needs, you must create a structure that adds most value for your audience.
- Do your research: Your business plan should reflect the time and effort you put into it. This is especially important when you work on specific sections such as competitive analysis and target markets.
- Be transparent: When it comes to the financial health of your company, do not hide difficulties you might be facing. Providing a clear picture will help you gain your investor’s trust and confidence.
- Update it: A business plan evolves over a period of time. Your market realities may have changed or new competition might have entered the scene. It’s therefore good to keep the document updated so it reflects your current business.