How to Write a Business Plan
I discussed how to plan your startup business in my previous article. A business plan is a written description of the future of your company. It is a document that outlines your business’ future and describes how it will be done. I explained that a plan is written when you only have a paragraph to describe your business strategy on the back cover of an envelope. A business plan is a combination of narrative and financial worksheets.
Writing a business plan is one of the critical steps in setting up a successful company. You should now be able to understand why a business plan is necessary. A business plan for traditional brick-and-mortar businesses will take a lot more time. The process can take as much as 100 hours. A business plan must be researched extensively before it can be created.
A detailed business plan for an online business is not usually necessary unless you’re trying to combine your online business and a traditional one. Online business startups do not require the same level of detail as conventional businesses. It would be helpful, however, if you covered all the essential topics, even if it was only briefly. A written plan will allow you to concentrate on the most critical aspects of your business.
Although you may not have considered your competition or outsourced some of your work, these things can impact your ability to make a profit. This is especially true in the early stages of your business. Even if you just open a lemonade stand on your front lawn, you still need to find out what Susie sells her lemonade for next door!
Although a business plan is not necessary for an online business, it’s worth having.
This article will discuss the steps involved in creating a business plan.
1. Executive Summary:
This is the first step in creating a business plan. Include everything you could cover in a five-minute interview.
Describe the basic business concepts: What product will you sell? Who are your customers? Who are your owners? What do you see for the future of your business?
It should be enthusiastic, professional, complete, and concise.
When applying for a loan, clearly state how much money you require and how you will use it. Include details about how the funds will benefit your business so that you can repay the loan.
2. Business Description:
You will need to describe the business after the executive summary. Your business industry should be described. Your company’s mission, goals, objectives, and business philosophy will be described. You can find the following information.
Your most important strengths and core competencies as a company. What are the key factors that will help your company succeed? What are your key competitive advantages? What experience, knowledge, skills, and strengths do your personal background, experiences, and talents bring to this new venture
3. Marketing Strategy/Strategy:
After the general description, your marketing strategy should be the next thing you write. Market analysis is a vital component of a marketing plan for new and existing businesses. It will also help to justify the sales forecast. As an indicator of the future, existing companies will heavily rely on past performance. New businesses face a more significant challenge. They will need to rely on market research, including libraries, trade associations, and government statistics. Make sure that your market analysis is pertinent to your new business’ viability and reasonableness of the sales forecast.
4. It is essential to note the exact location of your business.
It is more expensive to rent or buy a place with more customer traffic, but it requires less advertising to get customers. Retail companies are particularly vulnerable because of their importance in terms of traffic and accessibility.
You must explain how you plan to attract customers to your online business. If you don’t have a detailed statistical analysis of the tests you have done or those of a similar business, it will not help your cause. It could indicate a lack of thought in the rest of your business plan if you don’t have any data to back up your estimates.
5. Competitive Analysis:
Businesses are competitive by nature. Few businesses are entirely new. Be aware that there might not be a market for your product if there aren’t any competitors. Your concept of competition should be expanded. Your competition could be movie theatres, malls, and bowling alleys if you want to open the first skate rink in your town.
6. Management and Operations:
Since management problems are the most common cause of business failures, it is essential that we discuss qualifications and structures for managers. In supporting data, it is necessary to include the resumes of principals. List the capabilities of these critical people if your business relies heavily on outside experts and has few employees. In the supporting data section, list all principals and their financial statements if you’re looking for financing.
A company’s success depends on its ability to attract, train and keep quality employees. This section of your plan will be influenced by the type and number of employees you need.
8. Projection Financial Statements:
These statements can be helpful but not essential. Your Business Plan will include the development and description of your business strategies. You will be required to calculate the financial impact of these strategies in the financial section. This can be done by creating projected Income Statements, Balance sheets, and Cash Flow Statements.
These projected statements should be presented on a monthly basis for the first twelve months or until the business is expected to be stable and profitable. The summary form may be used to show activity beyond the monthly details (e.g., quarterly or annually). Most business plans have a forecast period of two to four years.
9. Summary Section:
Here, you can attach or explain any details that are not covered in the previous sections. This section should contain the financial statements of all Principles and other relevant data that an investor might be interested in.