Starting a business can be a journey that is both fun and hard. A business plan is an important tool that helps you stay organized, focused, and on track to reach your goals. A business plan is a written document that describes the goals, strategies, and financial projections of your business. It’s a plan for the future of your business.
In this blog, we’ll show you step-by-step how to make a simple business plan that will still work. We’ll also talk about how important it is to have a business plan, how to create one and give you tips on how to make your plan stand out. By following our simple step-by-step guide, you’ll be able to make a business plan that will help you get funding, bring in customers, and grow your business. Don’t forget to use our free business plan template to get started!
What is a Business Plan?
A business plan is a document that simply explains a company’s overall strategy, goals, and financial projections. It is also important to remember that a business plan is a living document that will be updated and improved as the business grows. This tool helps business owners and entrepreneurs clearly define their vision and goals and then come up with a plan for how to reach them.
It’s important to remember that a business plan isn’t just for new businesses. It’s also for established businesses that want to grow or move into new markets. A good business plan can help a company get money, attract investors, run well, and grow.
Importance of a Business Plan
1.Determining objectives and benchmarks
Planning will help you set goals that you can reach and a schedule for doing so. This contributes to long-term profit. It also allows you to achieve the KPIs and benchmarks essential to meet your objectives. About 70% of businesses that last for 5 years have a strategic business plan.
Only if you take the time to discuss your marketing, sales, and operational strategies in great detail, you will be able to answer any and all questions that your investors might have.
2.Helping with decision making
Running a business requires a great deal of decision making. Where to pitch,? Where to locate? What to sell? How much to charge?. A business with a well thought out business plan is able to predict the curveballs on the way. So, having a business plan doubles the chances of success of a new venture.
Your ability to think critically about the essential aspects of your company, as well as the decisions you make, are both possible with a business plan.
3.Attracting funds from investors
A business plan will help investors know more about your company’s aims and structure. It strengthens their confidence and encourages investment. The presence of a plan will assist investors feel more sure that they will receive a profit from their investment if the plan is put into action.
It is the instrument that can be used to convince other people that working for or investing in your company is a wise choice. A business plan increases the chance of growth by 30%.
4.Reducing risks in business
A well-considered company plan aids in reducing risky decisions. Based on the research you undertake, such plans help business owners make informed decisions. 23% of UK businesses do not have a written business plan
What Does a Business Plan Include?
1.Subtitle
The subtitle is a short phrase or sentence that explains what the plan is about. It usually goes below the title of the business plan and is meant to get the reader’s attention.
2.Executive Summary
The executive summary is a short summary of the company, its products or services, and its goals. It is usually the first part of a business plan, and it should be written in a way that is clear, brief, and convincing. It shouldn’t be more than one or two pages long, and should include a summary of the plan’s most important points. This should be written after the rest of the plan is done and should give an overview of the plan’s most important parts.
An executive summary includes:
- Business name and location.
- Brief description of your products/services.
- Overview of financial projections and funding requirements.
- Key milestones or accomplishments.
3.Company Description
In a business plan, the section called “Company Description” talks about the company’s history, who owns it, and who runs it. It should tell people about the company, what it does, and where it wants to go in the future. This part of the document is important because it tells the reader about the company, what it does, and where it wants to go in the future. It should be written in a clear and concise way and give an overview of the company’s mission, legal structure, location, current operations, future plans, management team, advisors or board members, and history.
Basically a company description includes:
- Mission Statement: Explains the company’s purpose and values.
- Legal Structure: Describes if the business is a sole proprietorship, partnership, LLC, or corporation.
- Location: Shows the headquarters and any additional operational sites.
- History: Summarizes the journey so far, including key achievements or milestones.
- Management Team: Introduces key leaders, their roles, and expertise.
- Vision for the Future: Outlines long-term goals and aspirations.
4.Business Opportunity
In a business plan, the business opportunity section describes the problem or need that the company’s products or services will solve. It’s an important part that helps people understand why the company exists and what it wants to do. It’s important to remember that the business opportunity section of a business plan should be based on thorough market research and should be realistic and well thought out. It should give a clear and compelling picture of the problem or need that the company’s products or services will solve and how the company plans to take advantage of that opportunity.
5.Competitive Analysis
In the competitive analysis part of a business plan, the company’s competitors’ strengths and weaknesses are looked at in depth. This part helps readers understand where the company stands in the market and how it plans to compete with other businesses. Overall, the competitive analysis part of a business plan is important because it tells readers where the business stands in the market and how it plans to compete with other businesses. It should be written in a clear and concise way and give an overview of the company’s competitors, competitive environment, competitive advantage, SWOT analysis, and marketing strategy.
6.Target Market
The component of a business plan devoted to the target market offers an in-depth description of the type of clientele the company intends to attract, including demographics, psychographics, and purchasing patterns. This part is significant because it helps readers to get a feel of who the firm’s customers are and how the company aims to reach out to those customers.
7.Marketing Plan
In the marketing strategy portion of a business plan, the company defines the strategies and techniques it intends to utilize in order to reach its target market, as well as to meet the sales and revenue goals it has set for itself. It is essential to emphasize that the marketing strategy should be founded on exhaustive research of the target market, and that it should also be practical and well-thought-out. In addition to this, it should be in line with the overarching objectives and strategies of the organization, and it should include goals that are SMART, which stands for specific, measurable, attainable, relevant, and time-bound. In addition to that, it ought to include things like a budget and measurement strategies so that the marketing efforts may be monitored for their level of success.
8.Financial Summary
In the portion of a business plan titled “Financial Summary,” an executive summary of the company’s financial estimates and funding requirements is presented. This part is crucial because it helps to give readers a feel of the firm’s potential for financial success and how it plans to accomplish it, which is helpful in making informed decisions about the company. In general, the financial summary section of a business plan is a crucial component of the document because it gives readers an understanding of the company’s potential for financial success and the strategies it intends to implement in order to realize that potential.
9.Funding Requirements
The portion of a business plan titled “financing requirements” discusses the funding that the company will require to get its business off the ground and continue growing. This section is crucial because it helps give readers a feel of how much money the company will need to get started, and it also helps give readers a sense of where that money will come from. When viewed as a whole, the financial requirements section of a business plan is a crucial component of the document. This is because it gives readers an idea of how much money the firm will need to get started, as well as where that money will come from.
How to Write a Business Plan Step by Step?
1.Executive Summary
The executive summary is a brief, positive review of your organization at the start of the plan. It explains your company and the factors that have led to its success. Create an executive summary that is not only understandable but also visually appealing by adding headings for each part.
For example: The overall content of your executive summary should involve
your business name, location, your mission and vision as a company, brief history, management and advisors information, products/services, industry/market, competitive advantages, and financial projections.
your business name, location, your mission and vision as a company, brief history, management and advisors information, products/services, industry/market, competitive advantages, and financial projections.
2.Company Description
Anybody reading your company description should be able to understand your company. Make a list of the people, organizations, or enterprises in your company.
For example: Consider answering these questions when writing the company description-
- Who is your target audience?
- What are your goals for your business and products/services?
- Where is your company located?
- When will you use your business plan and see results?
- Why should potential customers buy from you?
- How are you going to achieve the objectives you set for your business?
3.The Business Opportunity
Your business plan’s “opportunity” section focuses on the product or service you’re developing. The idea is to describe why your company is exciting and how it solves people’s concerns.
You determine your Business Opportunity by responding to the following four questions:
- What is your source of income?
- Who are you selling to?
- What do you provide them?
4.Competitive Analysis
You’ll need a solid understanding of your industry’s prospects.
It will help you in understanding your competitive environment, and it’s problems.
For example: Your report on competition analysis should consist of the following-
- Specifics on your goods/service in comparison to those of your rivals
- Price comparison
- Current and projected market share, sales, and revenues
- Variations in the ratings given by customers
- Marketing and social media strategy analysis
5.Market Research
You must understand who your consumers are or will become. That is why, implementing a market research will assist you in identifying any blind spots.
For example: The following should be the order in which you conduct your market research:
- Create a buyer persona for your business.
- Find a persona group that you want to participate with.
- Create research questions for the people in your market study.
- Compile a list of your primary rivals.
- Provide a brief summary of your findings.
6.Description of organizational management
Every business strategy must include a section on organization and management. Describe your company’s legal structure. and the section on structure and management needs to include an explanation of the chain of command, as well as roles and responsibilities.
It should explain a little about what makes each individual particularly well-suited for their particular part in the company and how it should be done. “Our management team of ten has more than 30 years of industry experience,” for example.
7.Product or service description
This is the focal point of your strategy. A product description will describe your goods/services and point out it’s benefits.
For example: Mention clearly what it is that your company will make, the price at which it will sell it, and any other relevant specifics.
8.Marketing plan
A business plan’s marketing section handles the product, cost, promotion, and location. The marketing strategy helps by specifying relevant tricks, such as plans to increase consumers.
For example: Include the following elements in you plan:
- Mission statement
- Marketing objectives
- SWOT analysis
- Market research
- Market strategy
- Budget
9.Sales strategy
It includes precise methods, market strategy, processes, goals, forecasting, budgeting, and a timetable. Create the ideal sales plan for your company’s image and business model.
For example: Make sure you include the points mentioned below:
- Align with overall business objectives
- SWOT Analysis
- Customer strategy
- Set goals
10.Details on funding (or request for funding)
This is the place where you can request the necessary funds. Outline your present requirements and why you are requesting these funds. Don’t forget to include a deadline for the repayment of the requested monies.
11.Financial projections
If you seek serious interest from investors, financial projections are crucial. Forecast your company’s future revenues and expenses using existing or predicted financial data.
For example: The financial statement should include forecasted revenue, expenses, and net profit in graphs.
Simple Business Plan Writing Tips
1.Learn about your competition and audience
While making a business plan you’ll need to know well about these two major components. Hence, you should define your competitions and what makes you a better choice. Your knowledge about your audience will only enhance your company’s image and plan. An in-depth research of your consumers and competition is critical to developing a good business plan.
For example: You could answer the following questions:
Why do they buy? When they buy? Why don’t they buy from your competitors?
2.Show why you care
It is essential to have a written business plan in order to demonstrate to all parties involved that you are dedicated to growing the business. The process of developing your plan compels you to consider and decide tactics that will drive your company’s expansion.
You will have to describe it through your content your eagerness and persistence. Your investors will need to know you have it in you and that you will focus on achieving your goal. 69% of venture capitalists have said they have never put money into a new business without first looking at its business plan.
3.Provide supporting documents
You need to go back over your business plan and look for instances where you have referenced to studies, surveys, or comparisons so that you can figure out which additional documents you need to include.
For example: Include any studies or other documents that lend the most credence to your facts, such as market research reports. Every single copy of the document ought to be legible and comprehensive.
4.Research a lot
The market and target audience research you conduct must be in depth. You should have complete knowledge about your strengths, weaknesses, threats and opportunities.
Here is where you have the opportunity to invest time in learning. Questions like who you are selling to, if there is demand for the things you provide, and if anyone else is selling it.
5.Keep it simple
If you want your investors to read the business plan that you develop, you really do need to keep it as straightforward as possible. You are required to keep the terminology and layout simple, and the plan itself should be kept to a minimum.
For example: Your business plan should be brief and easy to read, and in most cases it shouldn’t be any longer than 15 to 20 pages. This is true regardless of who you are writing for.
Business Plan Free Template Download
When you are enthusiastic about a new company or side project, it can be tempting to get immediately into the execution of the plan. However, making the effort to draft a business plan and put one’s ideas down on paper is extremely beneficial.
Looking for a fantastic customizable template to set the course for you? Smart Sales Kit has developed a carefully structured business plan template- and it’s free! Click here to download the free business plan template.
