Start from the Beginning: How to Write a Business Plan

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It’s easy to dream about starting your own business and the money it will bring you—but it’s not always so easy to turn that dream into reality.

Writing a business plan, which lays out your startup strategy, is an essential first step towards making your idea happen. A business plan outlines everything from how much funding you need to get started to how you plan to market your product or service.

Elements of a Business Plan

The length of the business plan will vary a lot depending on the business. Usually, all of the important information should fit in a 15-20 page document, as you can check in various business plan examples. The crucial aspects of the business plan that occupy much space should be highlighted in the main document and provided as attachments.

Like with most other business plans, no two are the same, but they all have the same elements. Here are some of the common and important components of a business plan:

· Executive Summary

This section of the document highlights the company, such as its mission statement. It also includes other important information about its employees, operation, and location.

Here, the company may also list the items it will offer for sale and include the cost, how long the items will last and any other benefits for the purchaser. Here, information on the production and manufacturing processes, any patents the company may have, and the company’s proprietary technology should be included. Also, you can include R&D.

· Analysis of the Market

It is essential for a company to know about the industry as well as its target demographic. It will identify the various competitors in the market, what each offers, and how. It will also discuss how hard it will be to take any market share away from the current contenders.

· A Marketing Strategy

It explains how the company will attract and retain its customer base and what ways it intends to reach its customers. In this case, a marketing and advertising campaign outline and plan for where it will take place need to be laid out.

· Financial Planning

The company should incorporate its financials to make a favorable impression. Financial statements and balance sheets for existing businesses may be available in addition to information about any future growth targets. However, financial statements will simply show current information for a new business, and potential investors can calculate potential earnings themselves.

All the best companies make it a point to maintain a budget. Expenses under this include staff salaries, production, marketing, and more.

What a Business Plan Entails

A business plan will help you take a big-picture look at your idea, determining whether it’s something you should pursue and how to do so in the most effective way possible. A well-executed business plan can help you stay on track with your goals, even when things get hectic in the day-to-day.

As you put together your business plan, keep these elements in mind so that you can use them to guide your path to success as an entrepreneur.

i. Company Overview

This section should begin with an executive summary and mission statement, followed by a detailed description of your company’s history, its future objectives, and plans, as well as an analysis of your competition.

Even if you’re not creating a formal business plan, thinking through these elements is extremely important to every aspect of starting and running a business. Before you even start writing (or typing or talking), think about how you’d respond to someone asking you what your company does in just 30 seconds; it’s OK if you don’t know at first–this exercise will help clarify things for you.

ii. Customer Profile

Your customer profile is essentially a description of your ideal client or customer. When you finish writing your plan, you’ll want to revisit your profile to make sure that it matches up with who will be buying from you.

Look at what types of people would benefit most from what you have to offer and consider why they might buy from you instead of someone else. Remember, your customer can be a person or an organization—just make sure that it fits into who will use your product or service. Also, consider things like geographic location, age range, etc.

iii. Competitor Analysis

Before you set off on your entrepreneurial journey, make sure you understand what’s happening in your industry. First, find out who is already in your space and what they’re doing well. Then, think about why they are succeeding—and where they might be falling short.

Suppose you want to start a business that sells car parts online, take inventory of what Car Parts Online Inc. (CPO) is doing now and where it’s lacking or making mistakes—and try to fix them for yourself if possible. It could save you down the road.

iv. Company Summary

You’ve got a killer idea, top-notch technology, and a design that looks like it jumped off an Apple store shelf. Now you just need to figure out how to sell your product. No sweat, right? Um, maybe not.

In fact, selling products is one of those areas where startups often hit brick walls and give up when they should be running at full speed. The good news is that there are plenty of resources out there to help you learn how to market your product.

v. Marketing Strategy

To get started, determine which market your product or service will appeal to. Who is your target customer? Are they male or female? What age group are they in? What other products do they already use in their everyday lives?

From there, you’ll want to create your marketing plan. This will include creating ways to reach customers and what types of messaging and content you’ll create to bring in more business. Do you have a budget for advertising and promotion, and how much can you spend on those avenues

vi. Financial Forecast

What is your financial forecast, and how do you plan to generate revenue? Be as specific as possible when providing these details.

Will you be selling products or services? If so, who will your target customer base be? Are there any major risks associated with generating revenue? Your business plan should include detailed answers to all questions like these to succeed.

How to Write a Business Plan –  8 Easy Steps

Writing a business plan can be an intimidating prospect if you’ve never done it before, but in the end, it’s actually quite simple. Before you start to write your plan, it’s important to remember: what kind of business you want to start, who your target audience will be, and how much money you’ll need to get your business off the ground. That’s what we’ll go over in this article about how to write a business plan.

1) Choose a Topic

This can be tricky. You need to find something that people will search for—ideally, one that’s highly specific and doesn’t have too much competition. But you also want something you’re passionate about because that will come through in your writing.

Ideally, it’s something you’ve got some experience with or at least know a lot about. Keep these things in mind when deciding what niche to choose.

Search volume: The higher Google search results are ranked, obviously, the more searches they get.

2) Brainstorm About Your Business Idea

Whether you want to start your own business or work for yourself within an existing company, every idea starts with some form of brainstorming. No matter what industry you’re working in, there are some things all great ideas have in common: they solve a problem, fill a need or entertain.

Before you spend too much time perfecting your plan—or writing it down on paper—you must make sure it meets those qualifications. If it doesn’t, ditch it and move on to another idea that does before you waste valuable time and money.

The initial step will always be about brainstorming and trial-and-error; that’s why no two companies (even those founded by close friends) ever wind up producing exactly the same product or service.

3) Look for Customers

Once you’ve developed your business plan, you can start taking concrete steps toward starting your business. And when it comes to learning how to start a business, one of the most important things is getting out there and finding potential customers.

Suppose you have an idea for a product or service; who exactly will buy it? Put yourself in their shoes—who are they, and what are their needs? Once you’ve identified your target market(s), it’s time to get familiar with them. Do they read blogs? What social media sites do they spend time on? These are things to look at while writing a business plan.

4) Figure Out Your Funding

Raising money is one of the trickiest and most difficult parts of starting a new business. You need cash to launch and grow your business, but banks, venture capitalists, and angel investors are reluctant to write big checks without an ironclad plan.

Even if you do have access to capital, it’s not uncommon for startups because they run out of cash. That’s why you need a funding plan.

5) Set Goals and Objectives

If you’re launching a startup, you probably have at least one reason for doing so. Maybe it’s more than one—you want to make a boatload of money, or you want to be your own boss, or maybe you just really enjoy starting new businesses.

Whatever your reason(s), defining your goals and objectives will help keep you on track as well as ensure that every step along the way leads toward those objectives. To set these goals and objectives, ask yourself: What is my ultimate goal with my business? How do I get there? How can I measure whether I’ve made progress? What am I willing to give up in order to reach my ultimate goal?

6) Create Action Plans

If you know what your business is going to look like but haven’t yet figured out how you’re going to get there, you may be setting yourself up for failure. One of your key goals is to develop a set of action plans to help push your business toward its final destination.

These action plans can change over time as you learn more about what works and what doesn’t, but having something laid out will keep you on track. Your company might not even make it through its first year without major changes; how many businesses do? Action plans ensure that whatever happens down the road, there’s still somewhere for your business to go.

7) Get Validation From Peers

This might sound like an obvious step, but it’s not: Before you can write a business plan, you need to know what your company will do. What service or product will you offer? How many people will your business employ, and what type of roles will they play? Where is your office located?

Consider all facets of starting up; if you think it will be too much work, you’re wrong. Answering these questions now will make putting together your business plan later a breeze. After that, start putting together an executive summary and table of contents.

8) Determine Next Steps

Last, of all, you should determine your next steps. That might mean talking with friends and family about your idea or investing some time in research. Whatever it is, make sure that you consider all aspects of your business plan before taking action.

Be prepared to revisit and revise your plan as needed. Remember that you don’t have to have everything mapped out right away; plans can change over time, so make sure that you have built flexibility into yours.

After writing down each step, check for holes and question any assumptions or goals that are unrealistic. Consider what could go wrong at each step of your plan—and how likely those things are—to help yourself prepare for challenges down the road.

Benefits of a Business Plan

Even the most successful entrepreneurs will tell you that starting and running a business isn’t easy – there are endless decisions to make, and many more things can go wrong. In order to give yourself the best possible chance of success, it’s important to take the time to develop a comprehensive business plan.

A free business plan won’t guarantee your success, but it can help you avoid common pitfalls and decide on the right business model for your particular situation. Here are seven benefits of developing an in-depth business plan before launching your company.

      i.        A plan helps you define your goals

Having a business plan doesn’t only help you figure out how to start your business—it also helps you define what success means for your new enterprise. For example, do you want to make $100,000 in profits over five years? Is that because that’s enough money for you to retire or because it’s enough money to attract outside investment?

Formulating these sorts of financial goals is critical; without them, it’s hard to know whether or not your business is succeeding or failing. A solid plan allows you to get clear on these goals and take steps towards achieving them.

     ii.        A business plan proves your business legitimacy

A business plan is often used to secure loans and other forms of capital. If you’re asking investors for money, they want to know that you’ve really thought your idea through.

Writing a business plan shows them you have and puts your proposal at an advantage over those who haven’t. If nothing else, it will make you appear more credible and professional than if you go into meetings cold.

   iii.        A plan helps you build credibility

The whole point of planning is to make your business a success. And, in order to achieve that goal, you need people to invest in your idea. A well-written plan will help establish your credibility by showing investors and others who could help you with funding that you’re committed to launching and growing your business—and that there’s more than just passion fueling you.

By taking the time and effort to create a detailed business plan, you are sending potential backers and investors a message: I’m serious about my business. It’s no wonder a small business plan has shown to increase your chances of raising money.

   iv.        Having a plan gives you focus

Without a business plan, it’s easy to get distracted by quick wins and short-term goals. Writing down your goals is powerful because you now have something to work toward. Defining success and knowing how you’ll achieve it also makes it more likely that you’ll actually follow through.

Many entrepreneurs say they rarely look at their plan once they’ve launched—but they’ll also tell you there’s value in thinking through and researching your idea. At the very least, you’ll quickly figure out what questions you don’t have answers to.

Having a firm grasp of your known unknowns is important and writing a business plan is the perfect way to make sure that happens.

     v.        A complete and well-written business plan attracts investors

Good financial backers will only take an interest in your business if they have confidence in you and your idea. A business plan is essentially a small research project that shows you’ve done some initial thinking about what you’re proposing to do and how you’ll do it. Investors are more likely to give money to people who have already put time into planning, making them appear serious about their goals.

They may even value an already-written plan more than an oral presentation, as it provides them with tangible information. Even if investors don’t use your plan directly, writing one can help by revealing any gaps or weaknesses in your plans so you can either tweak or make another go at it before approaching others with your idea.

   vi.        A good business plan is essential for securing funding

Whether it’s through grants, venture capital, or bootstrapping. But that’s just one reason you should write a business plan. The ultimate goal of writing one is to determine whether or not your business idea is viable.

It forces you to examine every aspect of your business and think about important issues like whether there’s enough market demand for your product, how much time it will take to build your product and launch it, what resources you need, etc.

Writing a business plan makes sure none of these issues are overlooked.

  vii.        A good business plan gives you peace of mind

Planning helps you envision and execute your goals with clarity. Even if you never follow your plan, just writing it out gives you structure. And if an unanticipated opportunity arises—or if things take an unexpected turn—you’ll have more confidence in your ability to keep things moving forward. The chances are good because you’ve prepared for any number of scenarios.

When it comes time to approach investors or lenders, for example, you won’t be scrambling to put together some semblance of a plan; instead, your business will be all ready for prime time. Having a plan also means that when new ideas arise or old ones need fine-tuning, you can quickly go back and revise as needed.

The Bottom Line

Before writing your business plan, you’ll want to gather as much information as possible. You should begin by researching your industry and competitive landscape. And everything starts with a business plan.

Do you want a free business plan sample? Get in touch!

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