Thinking of starting a business? A business plan is a must. That’s what they say. But, what exactly is a business plan and how do you make one? We tell you how! Read on.
What is a business plan?
A business plan is a written document explaining the nature of the business, the sales and marketing strategy, the financial background and includes an estimate on investments and returns.
(Source – Entrepreneur.com)
A business plan provides directions so that an entrepreneur can plan his/her future and helps avoid issues along the way. Spend time making your plan thorough and accurate.
In the long term, you’ll see your plan as a profitable investment.
Why do you need a business plan?
If you’re thinking of starting a new venture, a business plan can help you understand if your business idea is affordable. Having that idea on paper can help you understand if your business idea will be profitable and possibly, successful. Every company should have a business plan. The plan is reviewed and updated to see if goals have been met or have changed and evolved.
Does a well-written plan assure success for a business? Definitely no. But great planning often is the difference between success and failure. You should do everything possible for your business to be successful.
How to write a business plan?
Now that you understand why you need a business plan and you’ve spent some time gathering the information you need to create one, it’s time to put pen to paper.
There’s no right or wrong way of going about a business plan. What’s important is that your plan must meet your needs. You’re spending time, money, and effort to reach your goals, so make sure your ideas convince You first.
Business Plan Outline
The length of the business plan varies greatly from business to business. Before you start writing your business plan, let’s look at some tips you could use that will make the process easier. If you can get your plan done, you’ll be able to focus on your business.
1. Keep it short
Make sure your business plan is to the point. You want your plan to be read so keep it concise. It should be a handy tool that will help your business grow in time to achieve certain goals. Eventually, you can refine it as you move ahead. It should give the reader a good general idea of its main contents.
2. Understand your audience
Make sure the language you use to explain your business is simple, use terms that your audience will understand and relate to.
3. Test your business idea
Going through your plan can help understand the business idea long before launching. The best thing you can do is get feedback on different areas of your business. Ask a mentor or a friend to check elements of your plan or speak to a customer by conducting market research. Conducting these tests will help you analyze and plan better for your business.
4. Establish your goals and objectives
You should know what’s your goal for your business. Having an idea of what your goal is can help you work on a plan to specifically reach those goals. You might not have every specific step in mind before starting. But It will help you work towards your goals and further build your business to complete objectives. And that’s the beauty of working through your business plan.
Writing a plan may feel like a big task, but it doesn’t have to be. The key is to start simple.
5. Key elements of a business plan
Your business plan should include specific elements and should address relevant questions that the people wanting to know about your business may have. Generally, a business plan has the following components:
6. Executive Summary
The executive summary is a brief outline of the company’s purpose and goals. It usually comes at the beginning of your plan and is ideally not more than one or two pages. Make sure you highlight the key points. It should describe what you expect your business to accomplish. It must be impressive and compelling as this is the first thing anyone would read in your business plan. It is always a good idea to include mission and vision statements, the rationale behind starting the business, and the needs gaps that you are trying to fill with your offerings.
7. Market Analysis
The market analysis should reveal the demand for your product or service in your target market. It helps you identify your prospects and set the price, distribution, and marketing strategies that will allow your company to be successful. You could also include a SWOT analysis in this section to set the context for your business and its offerings.
8. Competitive Analysis
The competitive analysis examines your competitors’ strengths and weaknesses. It provides strategies that will give you an advantage. Make sure your product offers something unique that will stand out from the rest. Whoever reads your business plan should have a clear idea of who your target audience is.
9. Management and Organization Overview
This is where you could talk more about how you plan to start off, who the owners/ founders are, and a brief overview of them. It will be a good idea to also mention whether your business will operate as a partnership, a sole proprietorship, or a business with a different ownership structure.
10. Products and Services
While your company description is an overview, a detailed breakdown of your products and services is intended to give a complementary but fuller description of the products that you are creating and selling, how long they could last and how they will meet existing demand.
This is where you should mention your suppliers, as well as other key information about how much it will cost to make your products and how much money you are hoping to bring in. You should list here all relevant information on patents and copyright concerns as well.
11. Marketing Plan
Your marketing plan describes how you intend to take your products and services to your target customers. Include steps that you will take to promote your products and the budget that you will need to implement your marketing strategies.
12. Sales Strategy
This section should look at answering how you plan to sell your products or carry out the services that you intend to offer. Keep it as specific as possible. Break down how many sales reps you will need to hire and how you will recruit them and bring them on board. Including sales, targets is a great idea too.
13. Financial Plan
After understanding the product, market, and operations, the next area to focus on is finance. New businesses will include targets and estimates for the first few years of the business and any potential investors. Your financial plan should include income statements, cash flow statements, and balance sheets.
There are many freely available business-plan makers and canvases that are available on the web. We’ve shared a few below.
These DIY planners prompt and guide you to build a fairly good business plan based on your requirements. For those who want to get straight to their business without stressing too much about the planning bit, there are online stores. These online stores or e-commerce platforms enable small business owners in many ways.
For instance, Dukaan helps sellers set up an online store in just three simple steps. With online stores made by Dukaan, sellers and new business owners can focus on products. All the other aspects of a business including – online store set up, marketing collaterals, social media amplification, etc are made very easy.
It even offers free business tools that one could use while setting up an online business.
14. Business Plan Examples
Write your own business plan
That said, it is always helpful to have a good business plan before you start your venture – be it online or offline. It helps you plan, and execute in an organized manner, foresee and prepare for challenges that will come along the way, and even help tell your story in a unique way to all the stakeholders – from partners to investors.
Business Plan Template – Free Download
Here is a business plan template you can download yourself and get a headstart with for your business.