Every business, no matter how small, should have a business plan. This is a well-known fact - but why do you need a business plan?
The right business plan can serve as your guide to achieving a set goal, or can be used to attract investors to your business and the great idea behind it. The importance of this cannot be ignored if you truly crave success in your endeavors.
But the challenge many people face is how to create a detailed plan for their business. Below are examples of what a perfect business plan should include:
Executive summary - a summary of your business
Company description - what your company is involved in or its purpose
Organization structure and management - how is your business organized?
Product/Services - what product or services do you supply?
Marketing & sales strategies - how you intend to market and make sales in your business
Funding - how much will be required to run the business at the start, and through the next five years
Financial projection - a forecast of your future expenses and revenues
Appendix - this is optional, and it should include permits and any applicable resumes
Now we have a comprehensive list of what a business plan should contain, we will examine the steps needed to write a detailed business plan.
1. Comprehensive Research
This is the part of the plan where you need to spend the majority of your time, because it will determine whether you should go forward or not. At this stage, you will need to analyze any research you have about your product, check the market size to see if it is viable, and examine your area of expertise. According to former financial and management analyst Bill Pirraglia, you should try to double the time you spend on research so you can evaluate and think critically as you write your plan.
He says, "...to be able to write a perfect business plan; it is mandatory for you to have good knowledge of your company, your product/services, your competitors and your market size."
This means it is your duty to carefully study your business and understand the industry you are stepping into, so you’re prepared with all the necessary information to interact with your audience.
2. Define the goal of your plan clearly
By definition, a business plan is a written document that contains all of the information for your business; information ranging from the type of business, marketing strategies, sales, and financial background, to your profit and loss forecast. However, a business plan can serve some different purposes as well.
You can write a business plan to guide you and act as a blueprint for achieving a certain goal. This will save you from hitting obstacles as you move towards achieving your goals. In short, it is a personal plan for you to follow.
Business plans are also written to attract investors. If this is the reason you are writing one, then you must make sure you include every piece of information that will make it look viable, and worth investment in.
3. Build your company profile
A company profile includes your company's history, the product or service you provide, your target audience and market, the unique angle of your business, your resources, and how you intend to solve any challenges that arise.
Every business that has an official website displays a company profile to attract customers. Make this one of the foremost parts of your business plan. In most cases, your company profile is used to provide the details of your business in your plan. It is a vital component, that will never be looked down on if it is written in a way to make your company shine.
4. Document everything about your business
It is important that you record every aspect of your business in writing because investors like to see the details of what they are spending their money on. Nobody wants to throw their money into a vague business idea. To provide the information they require, your industry projections, cash flow, expenses, etc. must be properly documented.
Do not ignore any minor details such as licensing agreements and location strategies, because you can never tell which detail might attract and convince your potential investors.
5. Your marketing plan should be in place
A business that has no marketing plan is as good as dead. You may have a good product or service to offer, but if you do not have a plan to supply it to your customers, then your service/product is useless. Therefore, you must have an aggressive and strategic business plan in place. Below are some marketing objectives you should expect to achieve:
Introduction of new products
Regain or expand your market size
Refining a product
Enhancing product delivery services
Increasing product sales
Breaking into a new territory
Achieving all of these comes with a price tag, so marketing costs must be properly accounted for in your business plan.
6. Your business plan should be modifiable
Your potential investors can come from any field of business or another human endeavor. They could be a venture capitalist, a banker, or even an employee. Although these groups appear to be large and diverse, they all have the same objective - to invest and make money in return.
Each of the listed groups has their interest. Knowing their particular interest and working with them when drafting a plan, will be a great help in securing investment. So, your business plan should be able to be modified to suit the interests of a variety of investors.
7. Seek counsel from professionals in the same business
Nobody is an island of knowledge or needs to approach writing a business plan alone. It is both reasonable and advisable to seek advice from professionals who have been in your line of business for years. These professionals have gained a great deal of experience through making mistakes, and doing things over and over again. Their experience may help you add to the information you have already gathered from your research.
Make sure all the information you gather is well processed before including it in your business plan. You need to be objective in your dealings, and with what you choose to include in your business plan.
8. Make it known to the public why you are interested in the business
No matter who you are sharing your business plan with - be it a team member, your customer, or investor, your plan should explain why you are dedicated, passionate, and interested in your venture. You may even choose to discuss what you have already learned from past mistakes, challenges you look forward to solving, your competitive advantages, and your values.
The motive behind explaining your passion and interest for your business is to connect with your investor, so they can render their support in moving your company forward.
9. Review and Edit your Work
This is the final step you need to complete when writing your business plan. You may only have one chance to impress your investors, so it is critical for you to review your plan and make any necessary adjustments to make it look professional and interesting. Ask others to review it for you, accept criticism, and listen to their feedback.
Any business plan that has successfully won the backing of investors has been reviewed and reworked to suit its purpose. Never get tired of editing, and you should proofread it numerous times to make sure there are no errors that may discourage your investors.
Having a business plan is non-negotiable if you truly want to succeed in your business. However, writing such a plan has never been easy; it takes planning and multiple steps to help you achieve this feat.
Fortunately, all that is needed to write a perfect business plan has been put together for you in this article. Would you like to add those steps in the comments section below?