A business plan is a document outlining your company’s goals. Depending on who you write it for, it can help you raise capital or give directions to your team. The best-written business plan comes with a purpose and steps to fulfilling it.
You need a business plan regardless of your business’s maturity and size. Here’s how to go about it.
Define the Why to Write an Executive Summary
An executive summary is the first segment people will come across when reading a business plan. It should be concise but detailed, highlighting – in brief – the purpose of the document.
For instance, if you seek funding, the executive summary should explain why you need capital, how you’ll reach the goal, and how you plan to return the loan. On the other hand, if you want to use it internally, for team alignment, for instance, explaining how you plan to do it and how it will drive business growth is vital.
Lastly, share your business’s financial state, supported by relevant data showcasing what you have done so far.
Next Segment – Company Description
You want to start this part by listing basic information, such as your company’s registered name and address. Next is to define your business structure — are you a sole proprietor, LLC, or corporation? Also, introduce your leadership team and the current number of employees.
Next, introduce your product and services. How they can fill the gap in the market and the problems they solve.
The company description could also contain the industry overview. It can help interested parties understand your company’s position in a given sphere, but also the state and future potential of the industry itself.
Market Research and Competitive Analysis
Research is the most vital step in writing a business plan. It’s a time-consuming process, but it’s worth your effort as it helps you craft a comprehensive plan that answers any potential questions investors might have.
When conducting market research, take these elements into consideration: the market’s history, financial worth, future potential, and risks. All these should be analyzed and included in the plan.
You must also take your customers into account when doing market research. As a startup, you may give a description of your ICP (ideal customer profile). If you are already in the market, provide data about the age, gender, location, purchasing behaviors, and preferences of your customers.
Finally, you want to provide information regarding how your offer differentiates from competitors. You must know your competition and not be afraid to share your findings in the business plan. Instead, highlight their strengths and weaknesses and explain how you plan to compete with them.
Include a Marketing Strategy
You may have the best offer ever, but you need to build a solid mechanism for promoting it and bringing it closer to your target customer to expect success.
The era we live in is a heaven on earth for marketing professionals. Technological advances and the internet have opened doors to new channels companies can use to promote their products and services.
Still, what approach you’ll take depends on your target audience. Maybe your customers don’t spend much time on social media or prefer old-fashioned promotional material such as flyers. If applicable, include these in your business plan, explaining how your printed material will set you apart from competitors.
To summarize, the marketing tactics, tools, your marketing team’s structure, what you want to achieve, how long it will take to hit the goal, and the costs should be integral to your business plan.
Discuss Finances
Transparency is an essential factor when discussing finances. Your business plan should include your business’s financial analysis and projections.
Include your income, cash flow statements, and balance sheet. The income statement is your annual net profit and losses, the cash flow statement gives an overview of how you spend money, and the balance sheet shows assets and debts.
Financial projections show how you plan to generate profit in a certain period – for instance, in the next three years. These are essential as they inform investors how you plan to grow your business and repay loans.
What you put in your business plan is not set in stone. Instead, you can and should change it whenever it could benefit your operations. After all, as your business evolves, so should your business plan.
