10 Steps on How to Write a Business Plan
Business plans are the blueprint or roadmap of a business organization. It is the guidelines for obtaining the goals and objectives of the business organization. The importance of the business plan is to attract investors to invest in the business or to get financial help from financial institutions. So, a business plan should be well written, and here are 10 steps on how to write a business plan.
Business plans contain a lot of procedures and it is often harder to interpret what’s on your brain in written form as they can include a lot of elements as well as events. While writing a business plan, it has to define your business purpose, goals, structure, business quality strategy, business company description, products and services, financial plan and statements, required resources, business management, and operations.
Here are the 10 steps on how to write a business plan step by step:
Write an Executive Summary
A highly qualitative written executive summary can attract many investors to invest in your business plan. It must include all the major information about the business in concise and clear form. This will lead investors to believe that your team is qualified for your business and you also have a great business idea. While writing the executive summary you must focus on the investors as they are the ones who will invest in your business and don’t make a mistake by writing it for your sake. The executive summary must include the following details:
-Highly informative information for the positive response or decision from the investor’s side.
-Expected returns and time frame with an exit plan.
-Attractiveness and uniqueness must be reflected.
-Must be of 1 or 3 pages
-Fairly state all the expectations that you expect from the investors.
-Highlight your top-selling points 2 or 3 in the executive summary.
-Clearly state your cash flow inflow and outflow with future expected cash inflow and outflow for calculating profit margin.
-Lastly, present the total capital needed and a summary of the project.
Business description
The business description is about letting others know what you are doing in the business. It makes you do your business a lot easier. It helps to grab the attention of investors and loan providers. Not only that it is important from customer angel too as it is the main sources of attracting the customers. Therefore, while writing a business description you must understand your customers and what they want.
The business description must state the legal structure of the business, nature of the business, location of the business, products, and services of the business, the reason for business formation, and conduction processes such as online stores or physical stores or social media apps.
Operational Plan
An operational plan is a micro-management of every new business that manages day-to-day activities. The operation plan is related to cash flow, cash flow forecast, cash for the project operation. profit planning, breakeven point analysis, flexible budget, mission statement, expenses variance report, performance evaluation, weekly position review, position guidelines, outline principles, hiring procedures, strategic team planning, progressive discipline, the delegation of authority, compensation, incentive system, organization structure, management meeting, executive review, etc. It explains how goals can be obtained with cost-effectiveness for a business organization.
Organization and Management
Organization structure classifies board members and management teams based on their reasonable background. It is easy to show in pie chart regarding managers, employees, specialists, exports and other important individuals. It becomes more vivid and understandable by listing the name of individuals on the bases of positions, responsibilities, education qualifications, special skills, prior employment, who they manage, and the number of years they work with the company.
Legal Structure of Your Business
The legal structure of business refers to the types of your business organization. I.e Sole partnerships, partnerships, partnerships, a corporation, and limited liability corporations.
-A sole partnership is owned by only one person. Solely responsible for all profit and loss.
-A partnership is owned by more than two individuals and so does responsible for the business.
-A corporation is registered under the company act. Mostly a corporation consists of shareholders, a board of directors, officers, and employees.
-Limited liability corporations (LLC) are also registered under the company act having limited liabilities.
Products and Services
Products and services are the core form of earning of any business organization. Strong companies earn more income by selling their products and services. The main idea behind the product and services is what to produce, what to sell, how to sell, and to whom to be sold. The products & services must be unique with quality. The products and services must create value among customers as well as satisfy them.
Marketing and Sales Strategy
Marketing is the form of advertisement and making aware to possible customers about the products and services. Therefore, you must develop a marketing strategy as well as a sales strategy. The main key of marketing and sales strategy is to target possible customers based on demographics and areas. Marketing and sales strategy can be communicated by print, radio, television, internet, or marketing campaigns.
Consider the following things for market and sales strategy
-Marketing objectives and milestones based on time period i.eweek/month/years
-Target groups based on customer profiles.
-Gained success and orientated sales revenue.
-Develop marketing and sales action plans for further implementation.
Competitive Analysis
Competitive analysis means reforming new plans and strategies by analyzing your business competitors. So you can have a competitive advantage. First filters top 10 strong competitors among competitors based on their strength. Compare strengths and weaknesses among them and find out the advantages and weaknesses of your company. Analyzing competitors’ promotional tools and the way they promote. Compare products and areas of operation. This will help you gain strength and improvise your marketing strategy and sales plans. SWOT analysis is the key tool to do environment analysis. SWOT refers to strengths(competitors’ strengths), weaknesses(weak points & strong points), opportunities(optimistic and future possibilities), and threats(potential risk and threats) analysis.
Unique Selling Proposition
Unique selling proposition refers to the key feature of your business that you deliver to your customers. It creates unique value among customers. It may be the fastest delivery, best customer service, based on customer value, the combination of features, pleasant experience, etc. This must differentiate your business from the competitors.
Financial Plan
Financial resources are important and the life-blood of every business organization. Every business project and plan carries costs. Therefore you have to estimate and determine the total amount needed for the business operation. Cost occurs even to the start-up of the business such as registration fees, permits and licenses fees, rents, payments to workers, purchase of materials, and more.
Inconclusion,
The business plan should be clear and concise. In short, it must consist of agreements between partners, raising equity funds, business objectives, the value of a business, product line, getting loans, target customers, growth, development, expansion review of business ideas, and many more.
Thus, these are the 10 steps on how to write a business plan. I hope this article helped you a lot in developing and writing the business plan.