Companies that create and write a business plan are more likely to put the improvement in the following year compared to companies that don’t. A business plan software can walk you through the setup process rapidly. And you can also make your business plan by hand. So, keep reading and we will go over everything you need to know about how to write a business plan in simple steps.
Once you have a business plan in place, you will need a business checking account in order to keep your personal and business assets separate. Every business must have a written business plan in a detailed manner. Whether a business plan provides direction or attract investors, a business plan is vital for the success of your organization. But, how do you write a business plan?
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A business plan takes all the key considerations of your business, from your one-sentence pitch to your revenue model, and puts it in a single, neat document. Whether you are a new, established or evolving business, everyone needs to have these answers prepared and re-evaluated over time.
Even though your business plan is something you will reconsider constantly such as, when competitors come and go, it is not always necessary to write it down on paper. The exception is, however, if you are presenting to an investor, customer, or potential partner/employee. In these scenarios, you need a complete and up-to-date business plan that follows a standardized format.
However, getting started may be difficult to do. So, here are eight simple steps for writing a perfect business plan.
Analyzing your product, your market, and your objective expertise. Think spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan. In order to write the perfect plan, you must know your company, your product, your competition, and the market intimately.
In other words, it is your responsibility to know everything you can about your business and the industry that you are entering. Look through everything you can about your industry and talk to your audience.
A business plan is described documents that demonstrate the nature of the business, sales and marketing strategy, financial background, and containing a projected profit and loss statement. However, your business plan can serve various objectives and purposes.
It is also a road map that offers directions so a business can plan its future and helps it avoid bumps in the road. That is important to keep in mind if you are self-funding or bootstrapping your business.
But, if you want to attract investors, then your plan will have a different purpose and you will have to write a plan that targets them so it will have to be as clear and concise as possible. Therefore, when you define your plan, make sure you have defined these goals personally as well.
Creating a company profile as it has the history of your organization, what products or services you offer, your target market and audience, your resources, how you are going to sort out a problem and what makes your business unique and different from the rest of other businesses. Company profiles are usually found on the company’s official website and are used to attract possible customers and talent.
However, your profile is used to define your company in your business plan. It is not only an essential component of your business plan, but it is also one of the first written parts of the plan.
Investors just want to ensure that your business is going to make them money. Because of this expectation, investors want to know everything about your business. In order to assist you with this process, document everything from your expenses, cash flow, and industry projections. More importantly, don’t forget seemingly minor details like your location strategy and licensing agreements.
A great business plan always has a strategic and aggressive marketing plan. This typically includes achieving marketing objectives such as
Every marketing objective must have various goals (subsets of objectives) and tactics for achieving those goals.
In the objectives section of your marketing plan, you concentrates the ‘what’ and the ‘why’ of the marketing tasks for the year ahead. And in this section, you focus on the practical, sweat-and-calluses areas of who, where, when and how. This is life in the marketing trenches.
Of course, achieving marketing objectives will have costs. Your marketing plan needs to have a section in which you allocate budgets for each and every activity. It would be beneficial for you to build or create separate budgets for internal hours (staff time) and external costs (out-of-pocket expenses).
The potential readers of a business plan are a varied bunch, ranging from bankers and venture capitalists to employees. Even though this is a different group, it is a finite one. And each type of reader has certain typical interests. If you are aware of these interests up-front, you can be sure to take them into account when preparing a plan for that particular audience.
For instance, bankers will be more interested in balance sheets and cash-flow statements, while venture capitalists will be looking at the basic business concept and your management team. Your team manager, however, will be using the plan to remind themselves of targets and objectives.
Ensure that your plan can be modified depending on the audience reading your plan. However, keep these changes and alterations limited or restricted from one plan to another. Meaning when sharing financial projections, you should keep that data the same across the board.
Whether you are sharing your plan with an investor, customer or team member, your plan needs to show that you are passionate and dedicated, and you actually care about your business and the plan.
You can conduct the discussion of the mistakes that you have learned, list the problems that you are hoping to solve, describe your values and establish what makes you stand out from the competition. By explaining why you care about your business you create an emotional connection with others so that they will support your organization in going forward.
The appendix gets attached to the end of your business plan, and it will hold all the supporting information which you did not include in your document. Particularly, if you have any data points, charts, footnotes, or further explanations that are essential for creating a complete business plan, add those in the appendix section.
This is also a good place to insert your own resume and resumes of any key members of your management team. That way your readers can refer to the appendix if they need more, but are not distracted by long text explanations or confusing numbers while parsing through the plan.
The appendix should begin with a table of contents that breaks down the sections of your business plan, followed by the additional information that corresponds to each section.
While all of these should be considered carefully, you may as well emphasize, skip, or move around some sections depending on your particular situation. A business plan is, therefore, a collection of ideas, goals, and research about how to run your business in the long run. It matters less about how you write it and more that you are simply asking and answering these questions.
If you are sending your business plan to a lender or investor, however, be sure to follow a standard format and include the necessary data, such as a profit and loss statement. It is recommended to use LivePlan, which will help you make a professionally-formatted business plan much faster than working from scratch.