8 Steps to a Perfectly Written Business Plan8:25 PM
Before starting your business plan it is important to understand why you need one . Your business pl...
Before starting your business plan it is important to understand why you need one. Your business plan is one
of the most critical documents a business owner can have. But how do
you write a business plan that accurately predicts the future of your
business? Here are the objectives of a business plan:
- To provide for yourself a plan for your journey
- To present a business perspective of the idea to another business person
- To show that your ideas has been professionally examined and is feasible
- To convince prospective financiers to invest in the business
professional business plans.
This template will walk you through how to write a business plan and what to include in it.
How to Write a Business Plan: What Should Include in Business Plan
Title pageTitle or heading of the plan and a brief description if required, author, date, company/organization if applicable, details of circulation and confidentiality.
Executive SummaryThis is your business in a nutshell. This summary serves as an overview of the current and future position and goals of your business. Optional and usually beneficial, this should normally be no more than a page long (or it's not an executive summary) - the key points of the whole plan including conclusions, recommendations, actions, financial returns on investment, etc., clearly readable in a few minutes.
Business DescriptionThis section should give investors an elevator pitch about your business proposition. What does your business do? How will it distinguish itself from its competitors? How will it serve its target market? The answers to these questions will allow you to define a clear vision and methodically put it in place.
Explain any jargon or technical terms - assume that your reader does not know anything about your industry.
- What are you actually selling? It can be useful to include photos.
- What is your unique selling proposition (USP)? Explain what will make your customers use your products or service rather than your competitors.
- How can you build competitive advantage that will last? You may have a great idea but do you have the knowledge, processes or skills that others can’t copy that will keep you ahead?
- How much will you charge? How have you come to this figure and how does this compare to your costs and profits?
Market AnalysisBusinesses that fail to understand their position in the marketplace rarely enjoy longevity. Research your industry outlook, target market and performing competitive analysis. Be sure to capture the insights in this section to illuminate your company’s secret weapon for long-term success.
Organization and ManagementIt takes both a talented crew and a capable captain to steer a business to success. This section of your business plan should show the strength of your leadership team. This can also detail your organizational structure and the experience of the managerial team. The “who’s who” of the leadership team can attract potential investors. This can also help you determine whether you may need leadership changes.
Marketing and Sales StrategyA memorable business idea cannot succeed without a sound marketing and sales strategy behind it. How do you plan to attract customers and then sell your products or services to customers? Break down the details of how you intend to penetrate the market. Don’t forget to identify who your lead sales prospects are.
In order to have a successful business you need people to know about it. This section will outline how you will get your product/service known to your target market.
It should include:
- The four P’s of marketing:
Funding NeedsNeed outside investments to fund your business dream? Outline your current and future funding requirements, including the amount, type and desired terms. Remember to include how specifically you plan to leverage the funds as well as debt repayment plans, if applicable. This critical information can help decide whether potential creditors invest in your business.
Financial ProjectionsThe promise of success isn’t enough for your potential investors or creditors. You need financial data to support your argument. For start-up businesses, include prospective data like income and expense statements for up to five years. Established businesses may need to supply historical financial data. This could include the previous three to five years to prove their financial readiness.
More recommended post:
10 Common Business Plan Mistakes
10 Financial Tips for Startup Entrepreneurs
Editors Note: Then consider your living expenses and calculate how much money you need to take out of the business to live on. Work this out by detailing your monthly minimum personal expenditure – including things like rent, phone, utility bills and family expenses – and any income or state benefits you are receiving. This is often called your personal survival budget, wage or personal drawings. For more detailed help on writing a business plan you can visit SBA website.