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
Chapter seven: Financial Plan, Sales Forecast, Financial statements
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.