How To Write A Business Plan – Top 10 Ways
A business plan is the concrete base of your business. If you are a seasoned business owner or want to start a fully-fledged business. You need to know two things;
- Business plan to set up your business,
- How to write a business plan
What Is A Business Plan?
The business plan is a clear document of your objectives, and how you are going to achieve those objectives. It’s a clear written road map of the business’s marketing, finance, and operations. It will provide a road map of your next 3 to 5 years.
So simply put, a business plan consists of three things;
- Who are you?
- What is your plan to do?
- How are you going to do it?
Would you like to know how to write a business plan? Here are the top 10 elements of how to write a business plan step by step;
1. Write Down An Executive Summary
The first step in how to write a business plan is writing an executive summary of your business. It will be the first thing that the investor will look at.
The first step in how to write a business plan is writing an executive summary of your business. It will be the first thing that the investor will look.
So, it is better to write it in the last. With this, you can identify and write all the information which needs to be in the executive summary.
What is an executive summary?
Executive summary clearly explains your business, the problem that you are going to solve in customer’s life, the target audience of your business, the key financial structures and information of your business.
It is a short summary of your business, and it tells about the important information of the company. It is specially designed to catch the attention of the readers.
What to include in the executive summary for a business plan?
Six must elements to include in executive summary of your business plan;
- Product description and the problem that you are going to solve in customer’s life
- The target market, size of the market and its growth opportunities
- The competition and competitive advantage of your business
- What is your business model
- The business and executive team of your business
- Financial outline and projections of your business
Read more: How To Write An Executive Summary
2. Describe Your Business
In this section, your business plan is going to give key details about your business, like what your business is doing and what is unique about it.
It gives a clear image to the investor about the overall scope of your business idea within few paragraphs and few pages length. But, it also depends on business plan’s complexity.
The description of your business should be regularly updated as your business starts to grow. It is used by investors that can read your business idea and provide you the financial solutions.
The business description should include;
- Business registered name
- Business registered location
- Type of business structure, for example sole proprietorship, partnership, or corporation
- History of your business
- Profile of owners
- Mission and vision statement
- Overall (short term and long term) objectives of the business
- Offered products/services by your business
3. Define Your Business Goals
Business goal are the goals that a business is assuming to achieve over a set period of time. While defining, you are going to explain your goals, both long and short term goals. This setting of your goals will help you in setting priorities of the business.
Goals could be set for all levels, like goals for overall business level, departmental level, managerial level, employees level and for customers level.
What is the difference between business goals and business objectives?
The difference between business goal and business objective is that;
Business Goals
Business goal define the “what” purpose of a business. It sets a general direction that a company is going to follow. They don’t have set time limits and they are more broad.
Business Objectives
Business objectives define the “How” purpose of a business. It explains clear actionable steps of the outline. Business objectives are more specific and measurable. They have set time limits.
Read more: How To Set SMART Goals
4. Describe Your Business Products & Services
Here in the section of how to write a business plan, you are going to explain about;
- Your product and service offerings
- How they work
- Their pricing model
- Type of customer you are going to serve
- The benefits that are attached with them
- How they are better from competitors
- Your distribution and sales strategy
- Its production process
- Their lifecycle
5. Conduct A Market Research & Analysis
Market research is the technique to gather information and understand the company’s target market. It helps in identifying your target customers, their buying behavior and habits, their buying power, their buying patterns, what is the size of your target market.
Through this research, you can identify the customer’s problem, their desires, and the solutions you can provide. On this basis, you can build a better product or service to solve their problem, enhance their experience and fulfill their desires.
Conducting a market research is very important step in how to write a business plan because this will set the whole tone of your next steps and overall business. If it is strong your overall business will be standing on a concrete base.
With this, you can identify your potential customers and actual and potential size of the market.
Through research, you can segment your customers on the following basis;
- Demographic
- Psychographic
- Geographic
- Behavioral
- Firmographic
On this basis, you will segment your customers. Then from those newly made segments you will target those customers and position them according to your business positioning.
Top 5 best Market Research Tool
Here are top 5 best market research tool;
Types Of Market Research
What type of market research you can conduct, here are top useful options;
- Interviews
- Focus groups
- Pricing
- Awareness
- Customer interest
- Customer satisfaction
Where To Find Market Research Data?
Here are top 5 sources where you can find market research data;
- U.S. Census
- Beareu of Labor Statistics
- Consumer Expenditure Survey
- Mybestsegments
- SBDCNet Business Snapshot
Read more: How To Do Market Research
Read more: How To Do Market Analysis
6. Conduct Competitive Analysis
In this section, you will perform competitive analysis. It’s a process of identifying your competitors in the industry and researching about their different marketing strategies.
The idea begins with identifying the competitors and their products that they are offering in the similar market in which you want to enter. It takes some time to conduct competitor analysis but it will be extremely useful for your business in the future.
For competitive analysis, it involves four major key steps;
- Identifying your competitor in the business
- Collecting and gathering information about them
- Evaluate their strengths and weaknesses
- Identifying your own competitive advantage
Build your own competitive advantage and there are basically three primary factors of gaining competitive advantage;
- Cost leadership
- Differentiation
- Focus
There are certain tools from where you can perform competitor analysis.
Here are top 5 competitor analysis tools;
Read More: How To Do Competitive Analysis
7. Establish Marketing & Sales Strategies
Sales and marketing strategy is all about a plan to reach out maximum customers, engage them and convert them into profitable customers.
There are 4p’s in marketing that must be carefully addressed;
- Product
- Price
- Place
- Promotion
There are 5 sales strategies that are followed by businesses;
- Defining your product or service buyer
- Telling them a story
- Targeting a niche
- Selling your product or service brand
- Focusing on the growth
8. Establish Your Business Financial Analysis & Projections
If you are going for a new business, you may not have enough financial data. So, you need to set up some estimated financial data, financial statements and reports. Yet, you still need to prepare budget and financial plan of your business, so you can attract investors, customers and employees.
So, basically for financial data, you will need some financial statements like;
Income Statement
It covers all the incomes and expenses over a duration of time period, including revenues, gains, expenses and loss transactions. The main parts of income statements are;
- Revenues
- Expenses
- Profits
Balance Sheet
It shows the book value of an organization, subtracting all the business liabilities and owner’s equity from total assets. The main parts of balance sheet includes;
- Assets
- Liabilities
- Owner’s equity
Statement of Cash Flow
Its shows the aggregate data about all business inflows a business is receiving from it running operations and external investment sources. The main sections of statement of cash flow are;
- Cash flow from operating activities
- Cash flow from investing activities
- Cash flow from financing activities
Financial Projections
In the same way financial projections is very crucial part, when you are planning to have on board the investors and financiers. You will have to justify and show them that how your business will run, how and how much it will generate cash flows and how you will be able to repay your loans and debts.
Here you will provide the sales, profit and expenses estimates. Furthermore, build your business backed by solid market research so that idea attracts the investors.
Here are the 6 steps to consider while creating your financial projections;
- Project your expenses and sales
- Create monthly financial projections
- Identify what are your financial needs
- Make future plans on the basis of research and projections
- Always prepare other plans, what if plan A fails
- Analyze
9. Introduce Your Management Team
In addition to good business idea and plan, it is important to have a good management team that will bring out the best in that idea. They are the people who will turn your dream business idea into a reality.
Certainly, hire the right people, train them, highlight their expertise, motivate them, reward them and retain them.
The important thing to consider when hiring the people;
- Their education
- Professional expertise and background
- Professional achievements
10. Appendix & Annexes
Lastly, attach appendix and annexes in the last of your document to assist the reader to find important details.
Secondly, you can add legal documents, local or international certifications, local or international permits, deeds, certificates that enhance your credibility, patents and intellectual property rights, industrial membership, professional licenses and business registries.
Conclusion
Here we have discussed how to write a business plan and the top 10 ways to make a business plan. The key to the business plan is your idea and your research. You should have a strong idea backed up with thorough and strong research.
Identify the niche, gaps in the market, and polish them into idea to fill that gap in the market with strong use of product, and marketing tactics channels to attract the maximum customers towards your brand.
If your idea is extraordinary and you fail, make necessary amendments in your business plan, which you think were the reasons behind your failure. Then launch again and you will be successful.
How To Write A Business Plan FAQ
1. How do you write a business plan example?
How to write a business plan in 10 steps;
- Write Down An Executive Summary
- Describe your business
- Define Your Business Goals
- Describe Your business Products and Services
- Conduct A Market Research
- Conduct Competitive Analysis
- Establish Marketing & Sales Strategies
- Establish Your Business Financial Analysis & Projections
- Introduce Your Management Team
- Appendix & Annexes
2. What are 10 steps to writing a business plan?
Here are 10 steps to writing a business plan;
- Write Down An Executive Summary
- Describe your business
- Define Your Business Goals
- Describe Your business Products and Services
- Conduct A Market Research
- Conduct Competitive Analysis
- Establish Marketing & Sales Strategies
- Establish Your Business Financial Analysis & Projections
- Introduce Your Management Team
- Appendix & Annexes
3. How do I start my own business plan?
Here is how you can start your own business plan in 10 steps;
- Write Down An Executive Summary
- Describe your business
- Define Your Business Goals
- Describe Your business Products and Services
- Conduct A Market Research
- Conduct Competitive Analysis
- Establish Marketing & Sales Strategies
- Establish Your Business Financial Analysis & Projections
- Introduce Your Management Team
- Appendix & Annexes
4. What makes a good business plan?
A good business plan should have a good business idea, business goals, what you want to achieve, what will be your products and services, backed by strong market research, having an eye on competitors, making marketing and sales strategies, and including all the financial information.
This makes a good business plan.
