Having a well-written business plan is crucial for the success of any company. In this guide, you will find all the steps needed to write an excellent business plan.
What is a Business Plan?
A business plan is an outline of your vision. It should describe your purpose of starting a business and how you plan to achieve your goals. The business plan can be everything from a simple paper written by hand to a sophisticated document. In either case, a professional business plan must contain some key elements to be of use.
How to Write a Business Plan: What Should I Include in My Business Plan?
All business plans should contain three basic elements:
Your business concept: This concept refers to the basics of your business.
- Business structure
- Products or services
- Strategies to attain goals
The company’s marketplace: The marketing section is about customers, competition, and sales. It should answer the questions below:
- Who is your target group?
- Where are these consumers located?
- What drives them to make purchases?
- What is the existing competition?
- How will you deal with competitors?
The company’s financial section: Naturally, financial aspects are also vital. In this section, you should provide the following:
- Balance sheet
- Income statement
- Cash flow statement
- Other financial data
How to Write a Business Plan Step by Step
To make it even easier to write a business plan, we can break down the steps further. You can follow the ideas below or use a business plan template. It is also advisable to review an example business plan. In any case, the plan should contain the information below.
- Executive summary: Here, you are expected to present the reason for writing a business plan. For instance, you may be looking to get funding for your business with a loan or business partner. Whatever the case may be, you should specify what you seek and for what purpose.
- Company description: In this section, you should provide information about the industry you plan to operate in. State what type of company your business is and which sector it is intended for. Is it a corporation aiming to operate in the manufacturing sector? A sole proprietor coffee shop? Be as specific as possible.
- Service or product line: Here, a description of your products or services is required. How can your product or service be used? In what way does it add value to consumers? How does it differ from similar products or services?
- Market and competitive analysis: The first thing you must specify is the market size. Define your ideal customer, the demographics of the area where you plan to operate, and the growth potential. Define your positioning strategy, your sales potential, the competition, and how you intend to handle the latter.
- Organization and management: This refers to your business structure and how it is managed. How many people will your company employ? What responsibilities will they have? How will the business function? All information related to logistics is to be outlined in this section.
- Financial components: A business plan must contain your company’s balance sheet, as well as its income and cash flow statements. An analysis of each statement is also necessary.
- Appendix: Lastly, a few supporting documents may be added to the business plan. It could be your contracts with various parties, tax returns, references, or legal statements. Additionally, you can add your personal resume or any other record that may be of relevance.
Why is it Important to Have a Business Plan?
A business plan is essential for two main reasons. First, it helps you collect your thoughts. Starting a business is a big step that involves a lot of work. Everything from setting up the company correctly to the marketing plan is essential. With a business plan in place, you will have a clear outline of your goals and how you will attain them.
Having a business plan is also crucial to attract investors. Whether you are looking to get funding with a small business loan or a business partner, a well-written business plan is indispensable. It can put your vision, plan, and business in a very positive light and thus be a highly useful tool for attracting funds, partners, and clients.
Five Mistakes to Avoid When Writing a Business Plan
- Having unrealistic goals: Sometimes, expectations can be slightly high. By researching the industry, you will have a better chance of seeing your potential objectively. This is vital to attract investors.
- Having no purpose: Have you noticed that these days, almost every business appears to be involved in charity? Whether they donate to orphanages or support environmental protection, most companies have a higher calling than “just making money”.
- Being vague: Investors and banks seek clarity. They respond positively to hard facts and well-defined strategies. If you seem wishy-washy, they may not find you or your business idea credible. Similarly, you need a clear plan to fulfil your duties well.
- Being a jack of all trades: Specialization is essential for any new business. It is important that you narrow down your focus, as opposed to offering too many services. That would also lower your credibility.
- Not having a clear target audience: Many entrepreneurs make the mistake of choosing a vast target audience. Being specific and having a narrow target audience is vital. In time, you may be able to widen your target.
How Long Does an ACH Transfer Take?
ACH transfers are one of the most common ways of transferring money online. The transfers can take between one and five business days, and the Automated Clearing House network manages them. ACH transfers are bank-to-bank transfers and include the payments below:
- Transfers between friends and family
- Bill payments
- External funds transfers
- Direct deposits
To read about the difference between an ACH transfer and a wire transfer click here.
Whether you plan to start a tiny business or a huge corporation, a business plan is an essential tool. Firstly, it will help you gain and maintain a clear picture of your own tasks and responsibilities. Secondly, it will increase your chances of receiving support from others. A professional business plan can make all the difference in the success of your business.