Writing a Business Plan
Having a business plan to create and develop your business is extremely important. Writing a business plan may seem like an easy idea in thoughts, but is difficult to pull off on paper. In this article, we want to talk about writing a business plan.
A business plan is important as it can give you a precise idea about how your business will be. It is a document that says what your business is all about. A good business plan needs market research, experimentation, along with your objective and vision. You will be referring to your plan frequently as you progress through your business; hence make sure you give it enough time.
Do I really need to write a business plan?
Yes, you do… or at least, you should consider it. Let us tell you why. Writing a good business plan will help you define your goals, understand how your business would work, and a revenue estimate. However, there is more to that.
A good business plan will help you understand the market you are in. Why? To write a good business plan, thorough market research is required. This will improve your knowledge about the industry and help you familiarise yourself with it. Furthermore, you will also understand your competition better. You can take advantage of what they are lacking and you can implement that in your business. And of course, you also get to know your target audience and their demands from the industry. Knowing the demands will help you design and deliver your product(s) more effectively. This means you can generate the expected revenue that you will define in your business plan.
Besides, a well-written, detailed business plan will also attract investors and lenders. This may resolve your startup costs, and other upkeeps. Also, you will be able to experiment and achieve better results in the long run. On the other hand, you can also create effective business plans and sell them on the market too.
How to Write a Business Plan?
Writing a business plan is sort of like writing a graduation thesis. There are many sections in the business that you will have to get right to make it effective. Let’s take a look at each section individually.
a. Executive Summary
Probably the most important section. Whenever someone reads your business plan, they are going to read this first. This section has to be clear and concise. In a nutshell, an executive summary states what your business is about, success factors, and financial plans. This is the first part a busy investor would read, and if it fails to impress them, they are not going to bother reading further.
b. Company Introduction
The executive summary is like a thesis to your research paper, and this is the body. in Company Introduction, you will give details about your company, its legal structure, previous achievements, location, number of employees etc. This part will also include your vision, mission, and objectives.
c. Research Analysis
This section will be further divided into three subsections. Industrial analysis, where your research and anticipated industry growth overall is explained through your research. Customer analysis is about your target audience. This will also include projections about their demands from the market, how much would they be willing to spend on your products, and your solutions for the same. Competitive analysis is where you talk about your competition. This includes direct and indirect competition, and the competitive advantage(s) your business has.
d. Marketing Plans
Showcase your product and services, pricing, and promotional plans under this section. Tell the readers about how do you plan to reach your customers and sell your products or services. Include different marketing tactics you would adopt to advertise your business. Make sure you also include the ‘selling points’ of your business and how does it make you different from your competition. Having a solid marketing plan makes your business reassuring for investors.
e. Operation Plans
Just as the name suggests, this section will include how your business will operate. This also includes elaborated information about your goals and what would you do practically to reach it. Remember, being practical is important in this section. Avoid impractical goals and stating grand goals for the sake of impressing your readers.
f. Financial Plans
This is the second most important part for your investors. They are likely to jump on this section after the Executive Summary. This section will tell the reader about your loans and other expenses, and whether you would be able to repay them. Furthermore, from the investor’s point of view, they will look for a promising return on their investment. So make sure you add a good exit strategy in this section. In a nutshell, financial plans will be about your company’s expenses, revenue projection, and investment returns.
g. Management Team
As the name suggests, this section is about your employees. The hierarchical structure will be the point of interest for your investors. This will help them understand more about how your business would function. This section will also talk about your employees and their key roles. Furthermore, if there is any gap, such as your company needing a specialist but currently lacking one, you will be mentioning it. These are some people you would hire in the future at some point. Also, if you have a board of directors, you should include that information as well.
Important Notes and Conclusion
This was an attempt to give you a basic idea about writing a business plan in a nutshell.
It is extremely important to be humble and realistic in your business plans. Having hopes and dreams, and enthusiasm about it is cool and all, but be realistic about it. For example, don’t just blindly claim that your business would make a million in a month if you are just starting – unless you have something to back it up, realistically.
Secondly, and this is my personal opinion, is that you should come up with your own business plans. Refer to business plan templates, but don’t copy them. Think individually or collectively with your team, and come up with your own unique business plans. You are going to stick it for a long time. Besides, it will also help you in understanding your strategy better. If you need to view business plan templates for references, here are the top 10 business plan templates from Inc.
Lastly, I would also like to mention that business plans differ from business to business. What I have written above is the standard business plan format you should be having in your business. Also, note that your business plan should be flexible, and you should make changes if you face a number of setbacks. If a method does not work out for you, there is always another one.
We wish you well in your endeavours!