A business plan is a must-have guide for any new project.
It makes you plan out every detail of your business, create a roadmap and figure out what you will need to launch and manage your company.
So, in this post, we will walk you through everything starting from researching and then finishing those last couple of paragraphs to the entire process of business plan writing. Let's get started!
Conduct Thorough Market Research
You first have to research your market and understand what customers and competitors are, you then must write your business plan. You’ll use this research to inform a lot of the choices and estimates in your plan.
Invest some time researching your audience. Get VERY specific on the demographics, habits, problems, and problems of those you are trying to reach. Survey, interview and focus group to understand what your potential customers are saying.
Analyze your competition in detail. What are the big names around you? What are their products/services/price/best/worst/etc? How will your business differ? See where there’s a void in the market that your startup can fill.
Look at the statistics and growth estimates. Is the market growing or shrinking? So what’s new in store? You will know the macro-level landscape and this will position your business for success.
Craft a Concise Executive Summary
The executive summary is where you catch readers and get them in the door of your company. It comes first in your outline but, normally, you can write it after you’ve created everything for your company.
So try to get something that’s 1-2 pages and is essentially telling you:
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Your purpose and business vision.
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The customer pain point you’re addressing.
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Your market and USP.
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Your product/service offerings
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Revenue estimates and growth strategy.
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Money required and usage of funds.
Get straight to the point. Be specific but not too specific so that readers will be compelled to read your entire plan.
Describe Your Business in Depth
Your next business plan sections cover every aspect of how your company is going to function.
Mission Statement and Objectives
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Describe in a succinct way your business’s purpose. What do you end up doing?
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Develop 3-5 specific, quantifiable goals for the first 3 to 4 years of operation.
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Products and Services
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Explain your main product(s) or service(s). What do customers get in return for them?
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Share any future product or service growth plans.
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Tell us where you’re in the game and your competitive advantages. Why will consumers go with you instead of other competitors?
Execution Plan
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Outline your model and processes from source to manufacturing to delivery.
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State which employees you will need to run your company. Specify any existing hires.
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Explain your branding approach, marketing and sales strategy, customer acquisition and retention strategies.
Location and Facilities
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Tell them where you will have your business and why it is the right place.
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List the premises and equipment, furniture, renovations, signs, etc.
Make Realistic Financial Projections
Developing proper financial forecasts is one of the hardest and most important sections of your business plan. It tells potential investors that you are in the know about the cost-benefit of your business.
Startup Costs
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Calculate how much money you need to get your business up and running before you make a dime. Equipment, inventory, branding, website, permits, rent, marketing, insurance, hiring, etc. You may want to consider the cost of hiring web design agencies.
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Analyze one-time startup vs monthly expense. Notice if there are major purchases that need their own capital expenditures.
Revenue Forecast
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Estimate your monthly and annual revenue for the first 1-3 years. Do this based on expected sales numbers and prices.
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Offer low, medium, and high-profit scenarios. Explain in detail the assumptions that went into making each projection.
Operating Expenses Forecast
Estimate monthly operating costs (rent, employee pay, inventory, electricity, etc). Add costs that grow.
Profit and Loss Projection
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Take your operating costs and revenue projections and divide them by net profit estimates.
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Set aside times that you think the company should be a net profit generator.
Having a strong budget is the only way you can show yourself (and investors) that you can make money with your business. So, don’t be afraid of being in a fog. So, best guess, and put it down in writing.
Fund Your Business
You already know how much capital you will need to launch and run your business until it is profitable. The only question now is where that money will come from.
Personal Investment
Write down how much of your own money you are planning to contribute to the business. This shows that you are serious about the project.
Loans
Name any bank loans or lines of credit that you are planning to use. Suggest estimated terms and collateral needed.
Investors
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Enter the number of millions you want to raise from angels or VC companies.
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Identify target investors and tell them how you’re going to engage with them.
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Mention the type of investment security you will be selling (e.g., shares).
Other Sources
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Research small business loans, nonprofit microloans, crowdfunding, business plan competitions, etc.
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While it is not always easy, don’t depend on external funding. Investor capital is time-consuming to get hold of.
Manage Risks and Contingencies
Consideration of what-ifs and what-ifs is a part of a good business plan. This will set you up for unpleasant surprises.
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What are major threats to your startup that you might be facing, such as a competitor's launch, production delay, supply chain disruption, demotion of key staff, etc.?
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Create contingency plans for each risk. You can arrange backup providers or buy business interruption insurance, for instance.
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Highlight other growth plans, efficiencies and pivot opportunities if yours isn’t working.
You can anticipate road bumps so that you can show investors that you’re resilient enough to hit them and keep cruising along.
Craft a Polished, Visually Appealing Plan
You did all of the work on creating everything on your business plan, now make it professional. Use proper business plan formatting:
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Break things down into concise sections with headlines and subheaders.
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Fill in parts with bullet points, lists, charts, pictures, infographics, quotes or data.
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Don’t write paragraphs, but concentrate on one point.
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Choose a legible font such as Arial in 11 or 12 points.
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Make the margins big and white space to read.
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Proofread each page with care and have someone else proofread it.
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Print on a good paper and bound the page. Offer a digital PDF version.
Market analysis, business details, revenue estimation and funding plan, everything you need to launch your business is in your plan! Do it one by one as you get going. And look back at it often to see how things are going.
Thanks for visiting and best of luck building your startup!
