A traditional plan usually consists of seven sections, each of which is important to illustrate a different perspective of your business. The length and level of detail of the plan will depend on the target audience for the plan and the maturity of the organisation. You will use your business plan to sell your business to an investor and qualify your business for a loan from a lender. A solid plan is always useful and can help keep a business owner’s actions on track.
Step 1: Write a summary
As with any other document, the introduction to this plan is the catch. Why should readers believe in your company? Pitch your company and explain why it’s important to you. Add a high-level overview of your plan and operational model to your sales; don’t go beyond one or two pages.
Please feel free to include the following;
- Company Name
- Founder & Important Members
- List of Products and Services You Provide
Step 2: Write a description of your company
This is your first opportunity to really learn more about your company. What are the opportunities that your company is taking advantage of? What is your target market? How do you set yourself apart from your rivals? Emphasize how your company differentiates itself.
Step 3: Market and Competitive Analysis
Every blue chip company has done a comprehensive analysis of the markets it enters. This is not limited to large corporations, and readers will want to see evidence of this. Here, you can describe the industry and market in which your company operates and highlight the opportunities your company will take advantage of. Have you seen any unique trends in your market research? If so, this is the place to show off.
Also, please describe the competitive situation. What are your competitors doing well and what are they not doing well? Why are we venturing into this space and what are the weaknesses that should be exploited in the industry? How would your competitors logically respond? Take over a competitor’s customers? How do you do it?
Step 4: Operation system
Here are the specifics of your company. How does your company function on a day-to-day basis? This needs to be really detailed in your plan.
What is the legal structure of your company? Are you a sole proprietor? You may want to include this as well. If you have multiple stakeholders, it’s a good idea to draw an organizational chart to show not only who’s involved, but also that each one brings something to the table.
Step 5: Product Description
Now we can finally talk specifically about what we’re going to sell and what we’re going to offer. What does your product or service sell? This part may be a bit long, as it is of high importance.
Be sure to include a description of the product and how it differs from similar products. What will the price be and how does it compare to the competition in the market?
Put your marketing and advertising plans in here too. Even if you have the best product in the world, it’s meaningless if no one knows about it. Identify your target market and really detail how you want to make that market aware of your product. What is the message you want to appeal to, and why does it resonate with your specific product or target audience? How do you want to build recognition and loyalty?
Step 6: Raising capital.
If you are a potential investor or lender intending to read this, you should include a section on your loan application here. Be clear about how much money you are asking for and why you are asking. You don’t want to ask for a $100,000 loan or investment without a clear plan for how that money will be spent. In addition to explaining how the money will be spent, you should also state your expected ROI.
Step 7: Financial Analysis and Forecasting
It’s okay to include a funding request in your plan, but include a financial analysis here. There are a few things you’ll want to do here. Depicts the past performance of the business and indicates the future development of the business. We use charts and pictures to help simplify the experience.
If your business has been in business for several years, you have shown stability through your finances. However, if your business is new and not yet profitable, then be clear and realistic in your projections. For example, if your sales are growing steadily at a 5% rate every quarter, don’t suddenly assume a 50% increase in sales every quarter for no reason.
Research industry norms to see how comparable companies are performing. If possible, a multi-year income statement, balance sheet and cash flow statement should be included. When presenting your financial outlook, show a vision of at least five years. Clarify the logic behind the projections and, where applicable, link this section to the previous section on crowdfunding.
Step 8: Appendix.
If there is any relevant information about patents, licenses, charts, etc. left behind that is not appropriate for your plan elsewhere, please add it here. Please do not use this as a file dump space. Instead, make absolutely sure that every piece of information posted here supports your business plan.
Extra Tips & Thoughts
Be efficient in your planning. Make sure every word and image in your plan has a role to play. Here, you don’t want window dressing for the sake of window dressing. Being concise and to the point helps make your plan easier to digest and understand.
If your plan starts over 20 pages, really proofread it if you need to cut something out. Don’t write out plans that confuse or bore the reader.
Keep yourself honest: don’t assume a make-believe world when you write your planner. Be honest and down-to-earth. Note that to determine what these realistic measures are, use industry or sector benchmarks to inflate your projections. This is a very common problem that no one can help you with.
Accept help. There are so many free resources, both online and in-person, that can help you with all things small business; nonprofits like SCORE can offer free coaching, help you write a business plan, and more. If you are a woman or a minority, there are also many government-sponsored resources, such as the National Women’s Business Council, that offer free counseling.
Frequently Asked Questions
What needs to be written in your business plan?
The specifics of a business plan vary from plan to plan, but in general, a typical plan should include an executive summary, business description, market or competitive analysis, description of the proposed business structure, product description, and, where appropriate, a financing plan.
Why is a business plan important?
A business plan is an effective way to describe your business comprehensively and extensively. The lender can decide whether to lend to you based on your business plan. Investors can decide if they want to invest in your business based on your plans.
The plan not only communicates more information about the business to the outside world, but also serves as an internal reference. A written plan will help keep your business on the right track and will help you align your strategic goals with the actions you take every day.
Since a business plan is clearly so important, you might even want to hire a professional business plan writer to do it.
How to write a loan business plan?
Most lenders require a business plan from the applicant. A business plan should always take into account your audience, in which case you want to emphasize how your business will stand out in the market, which is why it is possible for your business to succeed, and your plan includes how to repay the loan quickly and on time. As long as the lender is confident in your loan repayment, your business plan has done the job.
What is the difference between a traditional plan and a lean plan?
Traditional plans are more common and carry more detail than lean plans; the two are relatively similar in content and structure, but lean plans contain only the most basic details. Lean plans are usually one page long and have the minimum amount of detail that describes the business to the highest point and should only be used when the business is very new and time is short.