Business plans are an essential component for any company. From startups to major incorporations, they’re documents that can help you form new partnerships and obtain funding.
However, writing one can quickly become overwhelming for any business owner. Take an efficient approach by following the article presented below:
What Is a Written Business Plan?
Written business plans are documents used by entrepreneurs for business planning purposes. They also write a business plan as a part of a larger strategy to approach investors for capital funding. A written business plan can come in digital or paper format.
Here is an article that also describes a written business plan.
What’s Included in a Business Plan?
Business plans include a company’s business strategy. They also contain individual plans for business units, such as finance, marketing, technology, and management. Many professionals cite the executive summary or business plan overview as the most crucial business plan component.
Below are 10 common components you will see in a business plan:
- Executive summary
- Business description
- Market analysis
- Marketing plan
- Competitive analysis
- Organizational description
- Product and service description
- Operating plan
- Financial pro forma
- Supporting documentation
How To Write a Business Plan – Step by Step
Write a business plan by laying out your overall company objectives. Then, develop strategies for individual business units with current market conditions and business goals in mind. Finally, write your executive summary succinctly and creatively.
Below, we’ve outlined a clear, step-by-step process for how to write a business plan:
Step 1. Encapsulate Your Company Objectives
Staying on track with your company can be as simple as writing down your short and long-term business objectives. They could include:
- Mission statements
- Visions statements
- Financial objectives
- Non-financial objectives
- Annual, quarter, and monthly goals
Explain the steps you’ll take to achieve each goal, as well as how you’ll track your progress.
Step 2. Write a Detailed Business Description
Offer more about your company’s background, history, and structure in this section. It’s a good idea to cover the following points:
- Key team members
- Origin story
- Other basic details
You should also include information about your company’s legal and ownership structures, culture and values, current employees, and hiring needs.
Step 3. Complete a Market Analysis
Any well-written business plan should include a market analysis, an in-depth examination of your company’s viability and profit potential. Consider breaking up the section into four key areas:
- Industry trends
- Target audience characteristics
- Competitive trends
- Pricing trends
This section is one of the most challenging to write. However, it’s a section that is very important to investors. Anticipate their needs and remain transparent about market conditions.
Step 4. Describe Your Product and Services
The products and services part of your business plan has two purposes:
- Give a clear picture of your offerings to the reader
- Explain how you’ll position your products and services in the market
Here are a few key points you should cover to convey your message:
- Offerings description
- Current status of products and services
- Analysis of materials and resources used
- Unique value proposition (UVP)
In the products and services section, you’ll want to let the reader know why your offerings are different. Look beyond the obvious features that all companies describe. Instead, focus on your benefits and how you contribute to the market better than your competitors.
Step 5. Create a Marketing Plan
This section shows how you plan to raise brand awareness, attract new customers, and retain existing ones. You can use a sales funnel as a guide or organize it by specific marketing distribution methods and sales tactics. Describe your objectives, accomplishments, and potential roadblocks for each item.
If you’ve operated for a while, you can talk about what you’ve learned from previous marketing and sales strategies, how you overcame any obstacles, and how you’ll adjust your approach moving forward, if at all.
Make a list of your proposed marketing and sales strategies, research them, and address any potential concerns if you’re still in the pre-launch phase.
Step 6. Develop a Financial Plan
Your business plan’s financial section should go into detail about your company’s finances and goals.
Create a list of expected startup costs, sales and revenue forecasts, and a cash flow projection if you don’t have your business’ financials yet.
If available, you should also include the following information:
- Profit and loss (P&L) statement
- Pro forma templates
- Statement of cash flows
- Balance sheets
- Statement of owner’s equity
- Financial statements
- Funding requests
- Debt repayment plans
You can work with your accountant to help you produce these documents. They can also offer tips for presenting your company in the best possible light.
Step 7. Finalize an Operations Plan
Operations plans describe how you will carry out all of your ideas, processes, and procedures. They generally address how you’ll utilize your human, financial, and physical resources.
You’ll need to share how your company will use them to meet your long-term objectives in the short term, including:
- Developing key performance indicators (KPIs)
- Communicating a clear plan
- Offering an overall strategic plan
- Accomplishing the most important goals first
Try to focus on hitting the right notes in this section. Don’t get too bogged down by scope. Communicate your plan of execution from the perspective of your reader.
Step 8. Write Your Executive Summary Last
You write the executive summary last for several reasons. First, it’s easier to write an overview after reviewing all available information. Second, your executive summary should really “hook” the reader.
The executive summary offers them a high-level overview of your company. Keep it short—one to two pages—and try to include the following details:
- Outline your achievements and highlights
- Describe your products and services in a few words.
- Provide general company information
- Offer a statement of purpose
- Share your long-term financial and growth objectives
It’s perfectly reasonable to write your executive summary as a letter. This option is flexible. It allows you to change the angle based on the recipient.
Here is another article that describes how to write a business plan.
What Is the Format of a Business Plan?
Business plans primarily follow the same format. The primary structure of any business plan generally includes several vital parts as follows:
- Executive summary
- Company overview
- Business objectives
- Market analysis
- Products and services description
- Marketing plan
- Financial plan
- Operations plan
While your company’s business plan will look similar to another’s, there could be critical differences. For example, startups and established businesses write their documents from different perspectives. Industries may also address unique challenges.
You could also invest in automation or document layout tools to help you make your document more eye-catching. There are many design services and tools on the market today to help you elevate the overall aesthetics.
Regardless of differences, the above-referenced outline is a solid format that any business can use. You can learn more about business plan formats by checking out this article .
Who Needs a Business Plan?
Every business needs a business plan. You never know when your company will need to call upon one. Whether you’re seeking funding or not, it’s a best business practice to write, review, and update a business plan regularly.
The most ideal time to write a business plan is when you’re not in a rush. However, small business laws in your geographic area can affect your decisions. Speak with business lawyers when you need legal advice or information.