A well-thought-out business plan is crucial for any business, no matter what industry it operates in or how big it is. Without a good business plan, it’s difficult to explain your company’s goals and ambitions succinctly. Thus, you can't plan for them. Writing an excellent business plan can be daunting, though, because there are few things as intimidating as a blank page and heaps of expectations.
This guide aims to help you with your business plan by offering advice and tips. Once you’re done with this article, you will know how to make a business plan that will stand out.
What is a Business Plan?
Essentially, it's a document that goes into detail about the goals and aspirations of your company. Factors such as a basic company description, the methods required to achieve your goals, finances, and the timeline required for goal achievement are all communicated in detail in the plan.
Typically, a successful business plan also includes the company’s financials, product deadlines, balance sheets, goals, losses, and projected profits.
Why Business Planning is Important
Imagine going on a trip without planning what form of transportation you’ll use, where you’ll stop to rest and refuel, how you’re going to pay for your expenses, or even what the final destination is. There's no way this trip will be a good one. It’s the same for businesses. Without a good business plan, you can’t hope to achieve great things. You’ll be better at strategic planning when you’ve got things written down neatly. A traditional business plan can also show outside parties that you’re serious about your company and the future you envision for it. If you need funding options like loans, for example, you’re more likely to be approved if you have a good plan.
How To Write a Business Plan
Now that the importance of business plans has been covered, it’s time to get down to business — let’s look at how to write one. The following steps are meant as a guide to help you with your planning, and you can use them for inspiration in whatever ways suit you best.
Without further ado…
Step #1. Choose Business Goals
First, you need to state your goals clearly. In this section, you must define what you hope to accomplish in the near future as well as over the long term. If you’re in need of funds, you need to discuss here why you need money and how you’ll use it to make your business grow.
Step #2. Describe Your Offerings
The next part of your business plan should indicate what services or products you are planning to offer. Explain thoroughly how your offering works, what your pricing model looks like, and how your supply chain will look in basic terms. One crucial thing to include is your Unique Selling Proposition (USP) (i.e., what makes your offering special).
Step #3. Research Your Target Market
You need to perform market research so you can show you know how big your potential market is and how you fit into it. A good analysis will show if you have any competitive advantages (things that help you get an edge over your competitors).
One helpful thing to include in this section is a SWOT market analysis covering your Strengths, Weaknesses, Opportunities, and Threats.
On top of this, Porter’s Five Forces is a worthy investment of your time. Porter's Five Forces include:
- Competition in the industry
- Potential of new entrants into the industry
- Power of suppliers
- Power of customers
- The threat of substitute products
Step #4. Describe Your Business Model
Your business model is an important part of your business plan. How are you going to make money as a company? What kind of sales strategy will you be using, and how will you measure the results?
Clearly define your value proposition, ideal target markets, and any plans you have for growth and advertising.
Step #5. Outline Your Financial Plans
It's important that you perform a business financial analysis and clearly display your financial health in your plan. If you don’t have a lot of information yet, just make sure that you lay out all your financial projections for the future and include a detailed cash flow statement. You might also want to include your business insurance plans.
You’ll need to provide this kind of information if you want to make a funding request (like lodging a loan application).
Step #6. Develop a Marketing Strategy
Good business plans need to discuss the company’s marketing plan. Go into detail about the four Ps of marketing — product, price, place, and promotion — and highlight your strategies for each of them.
Step #7. Build an Operations Plan
This step involves providing a layout of your operations planning. How you will build, store, and ship your inventory is important information that must be discussed in detail. You’ll also have to cover other considerations like suppliers, the facilities you’ll use, what equipment you need, and so on.
Step #8. Tie Your Report Together With an Executive Summary and Conclusion
Finally, you need to create an executive summary, which is like a mission statement. This part of the business plan is a condensed discussion of all the essential ideas from the other sections of your document.
Then, draw your report together with a conclusion.
Stuck? Try This One-Page Business Plan Template
Here’s a template that can inspire you:
Other Business Plan Resources
A template gives you a nice outline of what you should include when writing a plan, but there are other resources you can also tap into.
The U.S Small Business Association is known for curating some really good resources and SCORE, a non-profit organization, has a network of volunteer mentors who can help you create the perfect business plan!
Idea Financial Can Help You Put Your Business Plan Into Action
Now that you know how to create a business plan, it’s time to put that knowledge to good use and come up with a brilliant plan of your own. Of course, your work as a business owner won’t stop when the details are neatly put onto paper. The next step is putting all those plans into action. This can be an intimidating step to take, and you may need some financial assistance to kick off your journey. Idea Financial has two funding options that can help you start off the right way — business lines of credit and business loans.