Having a business plan is crucial for your business success. Without one, you would not have a clear vision of the business’s future. It is also essential to secure an investment or a loan and work as your pitch for impressing the investors.
However, drafting a business plan is not that easy. It can take you plenty of time to prepare one, but to help you speed things up, we have created a step-by-step approach on how to write a business plan.
1) Write your business description
The business description is the overview of what it is all about. It describes your business and its identity. In this section, you should add the details of when you started your business and your progress so far. But, in the new business case, you should give details about your professional background and the steps you have taken to launch the venture.
Also, mention the ownership details along with legal structure and key stakeholders. Include your team expertise to highlight a track record of success.
2) Write your market and competitive analysis
This section of the business plan will explore the nature of market conditions. It will help you identify market trends, challenges, and opportunities in the sector you are targetting.
You should also include the audience you want to target. You should know what age group your business is targetting and where are they located?
Lastly, it should include the details of your immediate competitors. You should compile a detailed analysis of competitor’s weaknesses, strengths, and their impact on your business. Competitor analysis will help you draft a strategy to capitalize on your competitors’ vulnerabilities and gain market share.
3) Describe your product or service
Your next section would be to cover the details about what you are selling. Remember that the product is the core of your business and has to be covered in full detail.
Some of the common questions you should answer are what’s so great about the business? How will your customers benefit from it? And how is it better than other products out there in the market?
Another important aspect is to include the product lifecycle, which shows where the product currently stands. Is the product still in the development phase? Or is it an established product that needs expansion?
Also, include your pricing. Make sure it is according to the market competition so you can capture some market share.
4) Sales and marketing strategy
This section of your business plan will explain your strategy moving forward. The first thing will be the details of your target audience and market need. Assure that there is a need for your product or service before launching, as in case of no need, you won’t be able to sell.
Market growth is another aspect the stakeholders will be interested in. While no one can predict the future, you must make a detailed forecast of sales and revenue for the following years.
Take into account the market trends as the demographic trends are essential for the business plan.
5) Funding request
Most small businesses have less capital, and a loan or an investment is required to raise it. The funding request will include the amount you need for the business and how would you use it? For instance, the additional capital can be used on inventory, skilled labor, or advertising.
Ensure to include all the information an investor or the bank might need, as securing additional capital is essential for business.
6) Financial plan
Next, you will have to draft the financial section, which includes historical and prospective data. If you are a startup, you don’t need to show historical data but rather your personal financial information.
Include balance sheets, income statements, cash flow statements, tax, and collaterals.
7) Make an appendix
Lastly, you can make an appendix to include information about your management team, reference letters, products, and contracts. It is not a core part of a business plan and can be skipped. However, it is recommended that you add it as it looks professional.
Final thoughts
Before you finalize your plan:
- Make sure it is free of any grammatical and spelling errors.
- Reread and review it multiple times before deciding on the final business plan.
- Add a cover image as well to make it more catchy and appealing.
