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How to write a Business Plan

INTRODUCTION

Planning is essential for the success of any venture. Business plan is the document that shows the articulation of your thoughts and extensive plan for your business. Not every business starts with a business plan but those that take their time to write a business plan understands what they are going into better, hence have a greater chance of succeeding.

There are many proven benefits of having a Business Plan before launching your business. They include:

  1. Helps Develop Accountability: Adequate planning helps you set goals and have measurable index; Same applies to having a Business Plan for your business.
  2. Understand your Business better: Don’t think you have a clear understanding of your business yet. The moment you commit yourself into putting your idea into writing, you get a clearer understanding of what you are venturing into. This is to your own advantage.
  3. Essential requirement for Investment: Most Venture Capitalists and Angel investors will not invest funds to your business if you do not have a clear Business plan for your project. Business proves you have spent quality time thinking about everything that will help your business succeed. Investors simply love the idea that you have give your business such time and thoughts. So, even if they will not read every detail of your Business Plan (they may scan through), they are rest assured that you have done your homework and that you have first convinced yourself of the profitability of your business before trying to convince them.
  4. Helps your Team understand the Business better: A good Business Plan will also help your team and future leaders of your company understand your vision better and also know where you are coming from before making changes.
  5. Helps Prioritize tasks that are most important: Business Plan gives you a general overview of your business and helps you focus on the most important tasks

Our recommendation is that you keep your Business Plan very simple. Write in clear, understandable and simple language for any audience or investor with minimal English fluency. Remember that not everyone will like to read a bulky plan, so keep it concise and hot the hammer on the head!

We have organized this Business Plan template that you want to download into seven sections or sub-plans to be completed by you:

  1. Executive Summary
  2. Company Overview
  3. Business Description
  4. Market Analysis
  5. Operating Plan
  6. Marketing and Sales Plan
  7. Financial Plan

The Executive Summary is the very last section we will recommend you complete. The reason is that you really cannot understand the complete summary of your business until you have written the other sections. Your business becomes clearer to you as you write from Company Overview to Operating Plan and Financial Plan. It is only at this time that we recommend you write your Executive Summary.

Also note that your business plan should be update regularly as your business grow and possibly pivot with time. You can do this on quarterly or monthly basis.

1.  EXECUTIVE SUMMARY

As I wrote earlier, do not rush to write the Executive summary of your business plan. As a matter of fact, let it be the last thing you’d write.

When you are ready to write the Executive Summary, we recommend it should not be more than one page. It is a summary or overview of your entire Business Plan. Anyone who reads your Executive summary should see in it a description of your company and your positive vision for the company. Talk about the problems your business will or is solving and why your business solution is different from your competitors. Also tell of who you think your ideal business customer is and where you see your business in the near future.

New businesses usually seek for investment from external sources. If this applies to your company, you will have to state how much you need, how you will use the funds and how it will grow your business.

Organize your Executive Summary under the following suggested Headlines:

  1. Opportunity: Tell us the problem your business will solve
  2. Mission
  3. Solution: The product or service you offer and how it will solve the identified problem
  4. Market Focus: Your target market and ideal customer
  5. Competitive Advantage: How will you succeed against your competitors?
  6. Ownership: Who else owns a stake in your business
  7. Expected returns: How can you measure your revenues and growth and what milestone do you expect to achieve?

2. COMPANY OVERVIEW

This is the recommended place for you to start in writing your Business Plan. The Company Overview gives a brief summary of your business. You have to tell how you want to solve the identified problem differently from others. Also write out your mission, market positioning, financial goals and operational structure.

With everything listed above, you may be tempted to create a detail and lengthy overview of your Company but it should not be so. Please keep it simple as always.

Use the points below to create a compelling Company Overview. Keep it simple and straight to the point. Only include things that directly deals with your company and nothing else.

  • Company Summary: Here you introduce or write what is known as the Elevator pitch of what your company stands for which includes your goal and near-term objectives.
  • Mission Statement: Write down the guiding principles of the company and your mission or what the company aims to do for customers, owners and employees.
  • Company History: Tell the history of your company and your personal story that led to the founding of the company. Talk about the present state of your company in terms of profitability and your goals too.
  • Markets and Services: This is where you describe what your target market is. Also tell us the related needs your company will address. You don’t have to be explicit in this section, just a general overview. There is still a later section where you will be expected to give a detailed description.
  • Operational Structure: Describe how you plan to operate your business and all the process involved. Are you going to employ people? How many? List all of them and their roles in the company.
  • Financial Goals: Every business or startup will need some capital to run it. This is where you will describe it. Please note that you also need to tell your projected revenue and profits, budget of the business and forecast.

3. BUSINESS DESCRIPTION

At this point, try to describe to your reader the business opportunity in your venture. You will use this opportunity to tell the reader about your business concept and also answer the question: What problem(s) will your company solve?

Think of any story of the problem your customer encountered and how your business gave a real solution. Narrate this story to the reader as a case study. Some business idea is new and solves a problem that the potential market never knew it existed. You will have to make emphasis on how your solution will save the customer time, stress and money or how it will ease the process of doing business.

This section gives you all the room to describe your service in detail. Tell us about how you will sell your product or render your service. Also talk about the pricing structure of your business, that is how you will charge your clients.

Describe how your solution is different from that of your competitors and what your target market is.

Here are the points you are expected to write on:

  • Opportunity: Describe in detail your target market. Where are they and how can they be reached? In what way are your competitors solving the same problem? How will your solution be better? What other services or products will you sell in the future?
  • Product Overview: Describe in detail the service or product you offer. Use charts and pictures where applicable or necessary.
  • Key participants: Identify and describe how your strategic partners will make your business progress. By partners, we mean key participants like distributors, referral partners and suppliers, etc. Identify all the key contributors to your business process.
  • Pricing: Describe how you will price your goods and services. Your pricing must

4. MARKET ANALYSIS

This very important section will help you convince your reader, who is probably your potential investor, that you understand the market very well. And that you have the required capacity to meet the demands in this market. You are to convince them that your business objective is valid.

Use this section to give us a general overview of the industry you will like to participate in. The reader wants to understand the market value your business is aiming at acquiring. This is the number of potential customers multiplied by the average revenue for the product or service. i.e

Market value = No. of potential customers x Average revenue for the product or service.

Define your target market in detail to your reader. Let him know the demographics, geographic location, target market needs and all other necessary key elements that he must know to understand this target market. You should have direct competitors. Use this medium to discuss how your product or service will perform better than your competitor’s.

You may want to include the SWOT analysis to help the reader understand how you compete with your competitor in reality. SWOT stands for your Strengths, Weakness, Opportunities, and Threats.

There are other sections that are actually optional, which will depend on your type of business. You must not necessarily include them. They include:

  • Industry type
  • Market segmentation
  • Competition
  • SWOT analysis

5.  OPERATING PLAN

In this section, you will tell your reader how your company will continue to develop and maintain a loyal customer base. You have to write in concrete terms which should also be measurable or tracked. Write out your envisioned phases for growth in the future and the capabilities that need to be in place to realize growth.

In this Operating plan section, you describe how your business works. How will your business support your customers? How will your business deliver the services to the customers?

However, you don’t have to write in much detail in this section. Just keep it simple so that your business plan will not be bulky.

Here are the points you may want to consider while writing your Operating Plan:

  • Order fulfillment: Describe how you will deliver order to customer. Describe the procedure of how you will keep track of your customer base, how you will mage sales and data.
  • Payment: Describe the Payment methods you accept and standard payment terms. Describe how you charge your clients, hourly or onetime fee? What will be the impact to your cash flow?
  • Key customers: Identify the customers that will be very vital to the success and progress of your business. How will these customers impact on your business? Identify the customers that will bring in bulk orders and those that can bring in 10% of your entire sales. Simply identify your key customers.
  • Technology: All businesses today need technology to thrive. Some businesses cannot function without technology. Describe the technology that is proprietary in your business. If your business stores user data, describe the data security plan and how you intend to backup and restore data in case of a security breech.
  • Key Employees and Organization: Describe the unique skill your employee must have to effectively run your business. Describe the skills your present employees have. Tell the reader the training process you already have in place. Include Organizational chart in this section.
  • Facilities: Describe the tax filings for your business type and other legalities.

2.  MARKETING AND SALES PLAN

Businesses do not succeed without marketing. In this section, you are to describe how you intend to market your business. Describe the key channels you wish to use in your product marketing. Marketing and Sales go hand in hand. Describe your sales strategy also in this section. How do you plan to generate leads?

Here are the subheadings you may wish to describe. Choose the ones that suits your business most and discard the rest.

  • Key Messages
  • Marketing Activities
  • Sales strategy

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