What Does It Mean to Draft a Business Plan?
Drafting a business plan means writing a business plan for your company. A business plan can be written before a business launches or after to reassess its methods and align operations with its goals.
A business plan is a legal document that states a company’s objectives and plans to achieve goals. It’s helpful to consider a business plan as a roadmap to success, offering guidelines for operations, finances, marketing strategies, and more.
Here is an article that defines a business plan.
How Do You Draft a Business Plan?
If you’re wondering how to write a business plan, the best place to start is with your company’s mission statement. The mission statement describes the business’s primary goal and purpose.
Your mission statement is a compass. It helps you draw a map that takes your business in the direction you want, always in line with your core values and objectives.
Next, you should determine a structure for your business plan. It may be lengthy, take weeks, or be written up in an hour or two and only a single page long.
If you’re feeling overwhelmed at the prospect of writing a detailed business plan, starting with a single-page template is a good starting point.
Here is an article by WeWork that gives 12 tips for writing an effective business plan.
4 Types of Business Plans
There are four main types of business plans that you may need to draft over the course of your company’s lifetime. These plans each serve a unique purpose and help you organize information about your business differently.
1. Mini plans
Mini plans are short yet comprehensive strategies that cover all the most important details about your business. A mini-business plan aims to give a reader a complete understanding of your company in just a few sentences.
A mini plan is often used as a business proposal when pitching your business to investors. They provide a widespread, high-level review of your business, what you do, and your goals. It can also show what your company has already achieved to demonstrate its profitability and potential.
2. Presentation Plans
Presentation plans showcase your company’s organization, mission statement, core values, and funding requirements. It is often used to introduce your company to investors while providing the most important information and details about an organization.
Presentation plans should be informative and engaging. They answer the 5 W’s of your business:
3. Working Plans
Working plans outline operations. They guide owners and management through the steps of running a business according to short-term and long-term objectives. The operational business plan can outline how the company will be run daily. It can also highlight ways it will change.
4. What-if Plans
What-if business plans use financial projections and forecasting to create hypothetical scenarios. They can help the business understand how its structure and needs would change if it experienced rapid scaling.
Likewise, these what-if plans are ideal for risk management strategy. They help the business understand what losses it may face in the future and make plans to prepare for or avoid them accordingly.
Here is an article that can help you write a business plan in 9 steps.
What Should Be Included in a Business Plan?
Business plans should include:
- A summary of your business
- Details about its organizational structure
- Descriptions of the products and services it provides
A business plan can also focus on specific elements of a company, such as marketing and advertising campaigns or funding strategies.
Every company is different, and business plans will fluctuate to accommodate each one’s needs. To determine the most relevant detail for your business plan, ask yourself, “What does my audience need to know?”
The main parts of a detailed business plan are:
The executive summary is a short statement about the business’s mission and the products or services it offers. This introductory summary also states the purpose of the business plan and its goal, e.g., to establish branding guidelines, set strategies, or attract investors.
Details About Your Company
Provide a top-down overview of your company, starting with its legal structure. Follow with an overview of your business, including what you offer, how you provide it, your suppliers, and your short-term and long-term plans for growth.
Information about products and/or services
Describe what your company offers its audience but focuses more on consumer benefits and solutions over products and services themselves. This portion of the plan aims to highlight the value your offerings provide and the benefits they create for your customers on an ongoing basis. This section covers intellectual property, patents, trademarks, copyright, and any relevant research or development.
Market analysis and financial figures
A market analysis helps assert the business’s market position and reveal a clear value proposition. In other words, how does your company fit into the current marketplace? How does it differentiate itself from its competitors? Investors are most interested in seeing a clear need for the products or services you offer, which makes your company more likely to be profitable. Financial projections are excellent ways to support your position in a market analysis.
Overview of company staff
Describe the organizational structure of your business, including the names and roles of the decision-makers, leaders, and managers. You should also outline how many employees you have, what departments you have, or how you plan to expand in the future. You should also mention board members, shareholders, and any representing attorneys.
Here is an article with an in-depth look at the parts of a business plan.
Who Needs a Business Plan?
Business plans are helpful for anyone planning to start a business or currently running their own company. Every business starts small, and business plans help pioneer a company’s growth. When you are a one-person operation, a business plan provides structure to your goals and a clear roadmap to help you strategically achieve them.
In the early stages of start-ups and small businesses, business planning helps turn ideas into strategies. The business plan can definitively turn your ambitions into actionable plans.
Here is an article by the Small Business Association that gives 5 reasons you need a business plan.
What is the Purpose of a Business Plan?
Business plans serve different purposes, but their primary goal is to help you recognize opportunities, develop strategies, and achieve your goals. You can use a business plan to:
- Raise capital
- Attract investors
- Attract new employees
Business plans also clarify a business's structure, organization, and needs at its current position. By understanding where your company is in detail, you can better align your marketing strategies and budget to reach your goals.
Here is an article by Growthink with 20 reasons why you need a business plan.
How Much Does it Cost to Draft a Business Plan?
According to ContractsCounsel’s marketplace, the average cost of a business plan is $1,000 to over $2,500. Of course, prices can change based on your business’s size and the complexity of your project. Some lawyers offer flat rates for their contracts, while others charge hourly.
Here is an article by ContractsCounsel that explains how a small business lawyer can help you with a business plan.
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