Business Plan Steps

If you’ve learned what a company business plan is and why you need one to start and develop your company, then it’s time to dig into the real work: the planning process.

In this step-by-step guide, I will walk you through each phase of composing a business plan that will genuinely help you to attain your objectives.

Rules for writing a business plan

1. Keep it brief

Business plans should be concise and brief.

The justification for this is twofold. First, you want your company plan to be readable, and no one will read something that is 100 or even 40 pages long.

Secondly, your business plan should be an instrument that you use to operate and develop your company — something that you keep using and refining over time. An excessively long business plan is a lot of trouble to review.

2.Identify your audience

When writing your plan, use language that your audience will comprehend. For instance, if your business is developing a complicated scientific process, but your potential investors are not researchers, you will need to avoid jargon or unfamiliar acronyms.

3.Don’t be intimidated

The vast majority of company owners and entrepreneurs are not business specialists. They don’t have business degrees. They’re learning as they go, just like you.

It may seem like a big hurdle to write a business plan, but it doesn’t have to be. You understand your company — you are the specialist on it. For that reason alone, writing a plan and leveraging it for your company’s development will not be as difficult as you believe.

Also, you don’t have to begin with the comprehensive business plan I will describe here. In fact, it can be much simpler to start with a straightforward, one-page plan — what we call a Lean Plan — and then use it to build a slightly longer, more comprehensive one later.

4. Analyze your market and opportunities

Research is essential to the completion of a business plan, and ideally, more time should be spent on research and analysis than on writing the plan itself. Understanding the size of your broader market and its growth, history, future potential, and current risks is critical for the success of your business. These considerations should all be described at this stage.

It is also important to conduct research on your product or service’s target demographic. This could take the form of fictional customer personas or a broader overview of your existing and potential customers’ income, locations, ages, genders, and buying behavior.

Though the research should be objective, the analysis in this section is a good place to reiterate what makes you different from your competition, and how you intend to outperform them and capture the market.

5. Perform competitive analysis

In addition to explaining the elements that differentiate you from your competitors, it is critical to perform an in-depth analysis of them.

This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should investigate these competitors’ value propositions and explain how you can compete with or exploit their strengths and weaknesses.

6. Prepare an execution plan for operation, development and management

This section of your plan specifies how you will carry out the necessary work to complete it. It should include information on your corporate structure as well as your team, your contractors, and the everyday operations of your physical and digital assets.

Consider including the organizational chart of your company and detailed information about your leadership team. Who are they? What are their backgrounds? What are they bringing to the table? Include summaries of all your key staff.

For startups, your execution plan should include how long it will take to start operations and how much longer it will take to reach profitability. For established businesses, it’s a good idea to outline how long it will take to execute your plan and how you will change existing operations.

It’s also a good idea to include your strategy for hiring new team members and expanding into new markets, if applicable.

7. Make a marketing plan

As you scale up operations or launch a new strategy, you must have a comprehensive marketing plan in place, which should be shared with your stakeholders and employees. This section of your business plan should outline how you intend to promote your company, attract customers, and retain existing clients.

Include your brand messaging and marketing assets, as well as a timeline and budget for engaging consumers across multiple channels. Perform a marketing SWOT analysis to list your strengths, weaknesses, opportunities, and threats. Examine how your competitors market themselves, and how your target audience responds — or does not respond — to these messages.

8. Manage your risks

Lastly, you’ll need to figure out how you’re going to manage the risks you face. All companies face some degree of uncertainty in their operations and need to make sure that they adequately prepare for this.

Typically, commercial insurance protects you against things like property damage, bodily injury to other people, medical expenses, and personal and advertising injuries. However, your business plan will need to reflect your corporate and operational risks too. Think carefully about the kind of threats you might face, using a SWOT analysis. Consider whether your enterprise can realistically compete long-term against your rivals.

Elements to include in a business plan

Now that we’ve discussed the guidelines for composing a business plan, let’s dive into the components you’re going to include in it.

Here we will explore the specifics of what belongs in your company’s plan, what to skip and critical economic projections.

1. Executive summary

An executive summary is an overview of your company and your plans for it. Ideally, this section is just one to two pages. It should appear first, but most individuals actually write it last.

2. Opportunity

This section answers a few questions: What do you actually sell and how do you solve a need or issue for your industry? Who’s your competitor and what is the market you want?

3. Execution

How will you seize your chance and transform it into a company? This section will cover your sales and marketing plan, operations, and success milestones and metrics.

4. Company and Management Summary

Investors look for great ideas and great teams. Use this section to define who you need to employ and your present team. If you are already up and operating, you will also give a fast summary of your legal framework, place, and history.

5. Financial Plan

Your business plan isn’t complete without a financial forecast. This is often what entrepreneurs find most daunting, but it doesn’t have to be as intimidating as it seems. Business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. That said, if you need additional help, there are plenty of tools and resources out there to help you build a solid financial plan.

A typical financial plan will have monthly sales and revenue forecasts for the first 12 months, and then annual projections for the remaining three to five years. Three-year projections are typically adequate, but some investors will request a five-year forecast.

A sales forecast, personnel plan, income statement, cash flow statement, balance sheet, use of funds, and exit strategy must be included in the financial plan.

6. Appendix

Use the appendix for any remaining details, like if you need more room for product pictures or extra data.

Now, dive into each chapter of your business plan and concentrate on constructing one that will be read and understood by your shareholders and lenders.

Download Free Business Plan Template

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