Do you have a business idea, and all you need is a business plan, or are you a student looking for a business plan template? If so, here is a step by step guide to creating a business plan (check out business plan example attached below). First, a business plan is a formal document that details the objectives of your business and a clear means of achieving them within a set period.
Before writing your
business plan, do a background check on the purpose of your business plan as
well as the audience it will serve.
Business planning is done for different purposes, including seeking
finances or for self-tracking. If you
are writing a business plan to seek finances, the language should speak facts.
Investors are not interested in fancy business plans, but they want something
that has facts that are realistic about making money.
Is it your first time
writing a business plan? Then start it small.
Starting small gives you a
chance to notice mistakes and learn at the same time.
It also gives you an
opportunity to make corrections without feeling overwhelmed.
A long business plan is
not preferable since most readers have no time to go through 100s of pages.
Starting small allows you
to improve it as your business grow
A business plan has two
key objectives, the more important one being to help you run your business with
a cohesive vision. Think of it as a roadmap to the treasure. To achieve success
in business, this objective dictates that you invest in a lot of research and
analyze your plan for the best strategies in sales, marketing, manufacturing,
web design, policies, etc.
This means that you can
keep adjusting your plan to measure up to the changing trends within your
sector. Additionally, you could decide to adjust it, so you always have the
best roadmap.
Secondly, you need a
business plan to acquire financing. Since it gives a realistic forecast of how
much you need and when the investor is likely to start getting their money
back, a business plan needs to be convincing. It should appeal to potential
investors and answer their queries.
A simple business plan
example contains chapters, section titles, and section subtitles. This is like
a business plan for students to help them develop the skills of formulating
creative forecasts that would propel a company from scratch or improve a
running company. Most business plan samples include the following chapters:
Is your company worth investing
in? This chapter provides valuable answers to potential investors, giving them
a general layout of your business, and that is why most business plan outlines
formats make it the first item. Think of it as where you provide realistic
replies to the hardest questions before the financiers can ask.
This is the most important
part of your business plan. Most of the audience will read it first, and if
they are impressed, there is a chance they will read other chapters. while writing this section, ensure that you
touch every important chapter in your business plan. It is very important if
you can have subheadings about each chapter and write a summary about them. Do
not use excess or jargon, instead be straight to the point while giving facts.
If you can create graphs or have figures that explain a chapter in a few words,
it is advisable to include. Kindly check our business plan sample pdf attached
below to view an executive summary example.
Write it last after
completing other sections
Give only facts
Keep it as short as
possible
Use graphs or figures if
possible
The aim is to outline your
company's legal, financial requirements, industry description, product and
services, your company's history, and mission statement. This is also where the
Articles of Operation is included in the case of a corporation.
In this chapter, the
audience wants to know what your mission and visions are. Your mission and
vision should be realistic and attainable. They also need to be specific. For
vision, it must include timely aspects. For example, it should be something
like "to attain a, b and c by the year 2030". Additionally, discuss the legal framework of
your business. Finally, discuss the amount of finances that you will need to
start the business.
Discuss the industry while
including the gaps that are there. Also, discuss the size of the industry and
why you chose to venture into it. Industrial trends are something that must be
included in the discussion. Finally, discuss the strength and core competencies
of your company. Basically, say what sets your company apart from the rest.
What
are you offering for sale? You have to ensure that you present a
minimum viable product and how you intend to build, assemble, and deliver it to
your customers. Besides, be realistic about your company's direct and indirect
competitors.
First, tell a story about
why a new product or service is needed. Tell the audience about the gaps in the
market. Be specific in your discussion by clearly defining the gaps that are
there. Examples of the gaps that are present in nearly all industries include poor
customer services, lack of product, lack of innovation, etc. conclude with a
masterstroke by telling a story about how your product will fill the gaps
identified.
The audience reading this
section of the business plan should identify the expert in you. Discuss your
unique experience and how it can be converted to something special effective in
solving customers' problems. So how can
you say you are an expert without being boring? Use simple language and be
concise. Finally, while describing the products or services, the language
should be customer-centered (but not an advertisement).
Highlight features of your
products and services
Use customer-oriented
language
Show you are an expert
Focus on market gaps and
benefit of your products and services
Discuss company mission
and vision
Company history and
company name
The main feature of the industry
Strength and competence
Be simple,
straightforward, and concise.
This chapter should
indicate the various customer segments that you target, their latest behavior
trends, and the niche you are filling in the market. Draw reference from the
current changes in the market sector. Additionally, focus on industrial analysis
and opportunities that are available to give a wide insight into the market you
are targeting.
There is a need to assess
the demography of your market and segment it. Assessment depends on the size of
the business. For example, if the business is a small games shop, assess local
demography around the shop. On the contrary, if the business is a large store
with many branches, assess demography on a national scale. Apparently, Market analysis for real estate or any other
business in different industries will include a similar framework, and it
should not worry you. Segmentation, on the other hand, deals with the market
division. In this case, based on the characteristics of the product, divide the
market based on gender, age, and even nationality. Skincare product companies
have market segmentations that are easily noticeable. For example, they segment
their market based on gender and age, and that is why most skincare company's
portfolios have children skincare products, women products, and men products.
Volume and value is
another important aspect that must be addressed while doing market analysis. Volume
talks about the number of potential customers, while value talks about the
monetary aspect of the market. It is advisable to always select a market with a
large number of customers and some competition rather than a market with few
customers and minimal competition. The rule is that you should always focus on
the market that you stand a chance of survival.
After evaluating the value
and volume of the market, it is time to estimate what the market needs. Opportunity
analysis is the first step for assessing market needs. Ask questions such as
what are the gaps in the market? What are customers complaining about mostly? And
how can their problems be solved? Besides, be future-oriented by brainstorming
and researching about future changes and how they will impact customers' needs.
Another important thing
that must be included in the market analysis outline is industrial analysis. In
this case, you will evaluate the forces that influence the operation of the
industry. The focus may include
discussion about suppliers, buyers, barriers to entry, substitutes, and
competition. To uncover industrial forces and ask questions such as what are
major barriers to enter the market? How strong is the bargaining power of
suppliers and buyers? How powerful are the competitors? Are there any
substitutes? And what are the trends in the industry?
If you still doubt your
ability to complete this section, kindly check the business plan pdf attached
for the market analysis example.
Carry out demographic and
segmentation analysis to understand market value, potential customers and
volume
Evaluate the market gaps
and needs
Evaluate your competitors
fairly
Evaluate industrial forces
What is the marketing
plan?
The marketing section of
business planning allows you to showcase the strategies you intend to employ to
sell your product or service. One question that you must ask yourself while
creating this section is: What methods of positioning, promotion, and
distribution should be used to ensure sales maximization?
Sales and marketing are
not only about advertising. If your goal is just to advertise, then you are in
for a big shock. You need to take marketing as an investment and expect a return
from it. The return for marketing is sales generation and profit maximization. The
question that you should be asking now is, how do you make marketing an
investment?
First, you need to create
a marketing program. A marketing plan action plan will allow you to have a plan
rather than spending money aimlessly on the advertisement. It will also enable
you to set goals for your marketing plan to achieve. Above all, it will allow
you to measure performance in a periodic manner, make adjustments, and improve
your strategy for better results.
So how do you create a
marketing plan?
Most marketing plan
examples start by evaluating the targeted market, and it is not a coincidence.
Without understanding the characteristics of your potential customers, it is
very difficult to create marketing plans and strategies that will win customers'
hearts. Therefore, if you want to uncover total marketing plan benefits, begin by understanding the characteristics
of your product and who possibly may find it useful.
How well do you understand
your competitors? Carry out a detailed market plan analysis of your competitors'
activities. Research their advertisement campaigns and find strengths and
weaknesses. Now, differentiate your marketing activities to stand out from the
crowd.
have you heard phrases
like "people buy brands?" Have you ever wondered why people buy
expensive products such as the latest iPhone even though there may be a cheaper
alternative offering near similar functionality? Or do you wonder why there are
people who would own specifically only Apple products and nothing else? This is
called brand loyalty. For Apple, they created a brand and associated it with
quality, durability, and luxury. That is why people do not complain about the
price of Apple products. So before you start marketing your product, think
about how you want people to perceive your products.
Marketing plan content
should focus on solutions and benefit rather than what you offer. Customers do
not care about what you offer to them. Their concern is whether the product you
offer provides solutions or benefits to them.
Finally, your marketing
success depends on how your products have been designed and produced. Your
R&D department should always try to differentiate your products by
providing unique and useful functionality. With products precious like gold,
your marketing department will have an easy time convincing customers to try it
out again and again. Above all, the well-done analysis will aid the proper
marketing plan budget estimation.
Have A Plan
Understand Your Target
Market
Focus On Unique Branding
Understand Your
Competitors
Ensure Your Products Are
Well-Differentiated And Functioning
Most operation plan
business plan sections deal with sourcing, production, and distribution of the
products that you sell. before writing the
operation plan section, you need to answer several questions including
Who Is In Charge Of
Completing A Particular Task In A Particular Department
What Each
Department Is Required To Do
Where Will The Daily
Operation Be Carried Out
When Should A Production
Process Or Task Be Completed
How Much Does Each
Department Need To Complete Its Processes Within The Scheduled Time
Operational plan
activities usually focus on objectives and strategies. The first section of
your operation plan should be to design the main objectives. After defining the main objective, there is a need to define departmental objectives. Generally,
operational plans aligned with the strategic plan focus on mapping strategies
to objectives. Apparently, each department should have strategies to attain its
objectives, and at the end of the specified period, the collective strategies
and objectives at the departmental level will propel the company toward
achieving the main objective.
Ensure the objectives are
reliable by using the SMART strategy in defining the operational business
goals. The SMART strategy suggests that the objectives must be specific,
measurable, attainable, realistic, and timely. According to the SMART strategy,
the objective should not be vague but specific, something like "increase
profit by 10% in the next year". Such an objective is specific since it
clearly states what is required. It is measurable since it includes percentage
change. It is realistic and attainable since a 10% increase is something many
companies achieve on a yearly basis, and it is timely since it states the
duration for the objective as one year.
Another important thing
that you must not forget while creating an operational plan for your business
plan is metrics and KPIs. These are tools that can be used to measure the
performance of operational processes. They include metrics such as profit
margin, employee turnover, net income, creditors, and debtors days.
Not sure about creating an
operational plan? Check out the attached operation plan business plan example
to understand what is needed.
Set Main Objectives
Set Departmental
Objectives
Define Departmental
Strategies
Ensure Your Objectives Are
Smart
Chapter
six: management plan
The management section of
your business plan is one of the most important sections. You may have good
ideas but lack adequate personnel and knowledge to run the business may scare
away investors. Most of the investors will keenly check the management section
of your business plan to understand if you have the expertise necessary to run
the business successfully. It is very important to ensure you have a team with
expertise in different areas related to your idea to increase your rating
score.
Start by designing the
structure for your business. The structure should outline the top managerial
position to the lowest level.
Assign roles to the
managers. Some managers will take up several roles since you are just starting
up. Ensure that those roles are assigned based on the qualification and skills
of each individual. Above all, do not forget to attach the CVs of your managers
since investors will want to ascertain the quality of your team before deciding
to be part of it.
Give detail about external
management support that you may need. Specify their roles and justify why they
will be required.
Lastly, address the human
resource requirement. Be specific by estimating the number of employees that
you will need and their roles. Define how their contract will be framed. Additionally,
calculate their wages and salary and include that information on the financial
statement. More so, ensure you include additional costs associated with wages
and salary, such as benefits and insurance charges.
Always Have A Simple But
Clear Structure
Assign Roles To Managers
Estimate The Number Of
Employees Needed Per Each Department
Estimate The Total Salary
Required
Include The Additional
Cost Associated With Salary And Wages
This chapter of the business
plan defines and calculates financial variables to be employed by the
entrepreneur.
Find a financial plan
business plan template that is well connected and develops it by including data
about expenses, expected sales, the price for each product offered, and tax
rate.
For expenses, brainstorm
about all possible raw materials, equipment, and furniture that you will need
for operation. List all of them and assign the possible costs. You can check
the latest prices on an online marketplace or ask around to get a true picture
of the expenses, you may incur.
For sales, be realistic,
and consider selecting worst-case scenario figures. Use your pricing strategy
to calculate the possible prices for your products.
Come up with financial
plan assumptions that are not too over-hyped but something that can be achieved
without struggling.
If you are struggling to
complete your financial analysis, ask for financial advice help from experts. You
can find them here.
Brainstorm And Research
About Possible Expenses
List All Possible Expenses
Use Most Recent Prices For
Expenses
Be Realistic In Estimating
Expected Sales
actually, appendix and
references should be different chapters, but the business plan appendix should
be the last item. For business plan references, the format depends on the
purpose of the business plan. If you are writing a business plan for students,
then you need to observe the business plan APA format, or Harvard, or any other
format specified by the instructions provided. Otherwise, if you are writing a
business plan for a small business, startup, agro vet, etc., you can provide
necessary links to justify the source of your information. Apparently, you do
not need in-text citations.
A business plan appendix
is the last item to be covered, and it provides additional information or
documents not provided on the main body.
Before starting to write
an appendix section of a business plan, you may have all the documents that go
there. The cheat sheet is to make sure you create subheadings for your
appendices. If there are more than ten items to go into your appendix section,
ensure they are included in the table of content. Finally, do not use original
copies of the document in the appendix, instead use the copies.
Still not confident about
your appendix section, check the attached sample for the business plan appendix example.
The Appendix Should Come
Last After References
The Format For References
Depends On The Purpose Of The Business Plan
Use Subheading To Identify
Your Appendix Items
Do Not Use Original
Documents On Your Appendices, Instead Of Copies
Include Business Plan Appendix
On The Table Of Content
It is important that you
understand every small detail in your business plan. To achieve this, try
writing it yourself and have a professional do the corrections after consulting
you. Alternatively, source it from a professional, and read through it to absorb
every detail. No investor wants to see errors in your business plan. They all
want to start the journey in a boat that looks promising, not faulty.
