Every needs to have a written . Whether it's to provide direction or attract , a business plan is vital for the success for your organization. But, how do you write a business plan?
SBA.gov recommends that a business plan include:
Business Plans How to Write a Business Plan: A Step-by-Step Template Writing a business plan doesn't have to be an intimidating task, but it does require foresight, honesty, and plenty of research. A business plan is a formal, written document stating what a company does, what it wants to do, and how it plans to get there. Business plans are written in a standardized format, which allows anyone—such as potential investors or business partners—to assess how a company compares to other companies in the same industry using generally accepted standards and criteria. Section of the business plan. Then expand on that statement by telling more about each item in the text that follows. There is no set length to a business plan. The average length seems to be 30 to 40 pages, including the supporting documents section. Break the plan down into sections. Set up blocks of time for work with target dates for completion.
- Executive summary -- a snapshot of your business
- Company description -- describes what you do
- - research on your industry, market and competitors
- Organization and -- your business and management structure
- Service or product -- the products or services you're offering
- and -- how you'll market your business and your sales strategy
- Funding request -- how much money you'll need for next 3 to 5 years
- -- supply information like balance sheets
- Appendix -- an optional section that includes résumés and permits
However, getting started may be difficult to do. So, here are seven steps for writing a perfect business plan.
1. Research, research, research.
'Research and analyze your product, your market and your objective expertise,' William Pirraglia, a now-retired senior financial and management executive, has written. 'Consider spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan.
'To write the perfect plan, you must know your company, your product, your competition and the market intimately.'
In other words, it's your responsibility to know everything you can about your business and the industry that you're entering. Read everything you can about your industry and talk to your .
Related: Do You Really Need a Business Plan?
2. Determine the purpose of your plan.
A business plan, as defined by Entrepreneur, is a 'written document describing the nature of the business, the sales and , and the financial background, and containing a projected profit and loss statement.' However, your business plan can serve several different purposes.
As Entrepreneur notes, it's 'also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road.' That's important to keep in mind if you're self-funding or bootstrapping your business. But, if you want to attract investors, your plan will have a different purpose and you'll have to write a plan that targets them so it will have to be as clear and concise as possible. When you define your plan, make sure you have defined these goals personally as well.
Related: 3 Apps to Help You Write a Business Plan
3. Create a company profile.
Your company profile includes the history of your organization, what products or services you offer, your target market and audience, your resources, how you're going to solve a problem and what makes your business unique. When I crafted my company profile, I put this on our About page.
Company profiles are often found on the company's official website and are used to attract possible customers and talent. However, your profile can be used to describe your company in your business plan. It's not only an essential component of your business plan; it's also one of the first written parts of the plan.
Having your profile in place makes this step a whole lot easier to compose.
Related: Conducting a Market Analysis for Your Business Plan
4. Document all aspects of your business.
Investors want to make sure that your business is going to make them money. Because of this expectation, investors want to know everything about your business. To help with this process, document everything from your expenses, cash flow and industry projections. Also, don't forget seemingly minor details like your location strategy and licensing agreements.
Related: How Do I Build a Business Plan? (Infographic)
5. Have a strategic marketing plan in place.
A great business plan will always include a strategic and aggressive marketing plan. This typically includes achieving marketing objectives such as:
- Introducing new products
- Extending or regaining market for existing products
- Entering new territories for the company
- Boosting sales in a particular product, market or price range. Where will this business come from? Be specific.
- Cross-selling (or bundling) one product with another
- Entering into long-term contracts with desirable clients
- Raising prices without cutting into sales figures
- Refining a product
- Having a content marketing strategy
- Enhancing manufacturing/product delivery
'Each marketing objective should have several goals (subsets of objectives) and tactics for achieving those goals,' states Entrepreneur.
'In the objectives section of your marketing plan, you focus on the ‘what' and the ‘why' of the marketing tasks for the year ahead. In the implementation section, you focus on the practical, sweat-and-calluses areas of who, where, when and how. This is life in the marketing trenches.'
Of course, achieving marketing objectives will have costs. 'Your marketing plan needs to have a section in which you allocate budgets for each activity planned,' Entrepreneur says. It would be beneficial for you to create separate budgets for for internal hours (staff time) and external costs (out-of-pocket expenses).
Related: Why You Must Have a Business Plan
6. Make it adaptable based on your audience.
'The potential readers of a business plan are a varied bunch, ranging from bankers and venture capitalists to employees,' states Entrepreneur. 'Although this is a diverse group, it is a finite one. And each type of reader does have certain typical interests. If you know these interests up-front, you can be sure to take them into account when preparing a plan for that particular audience.'
For example, bankers will be more interested in balance sheets and cash-flow statements, while venture capitalists will be looking at the basic business concept and your management team. The manager on your team, however, will be using the plan to 'remind themselves of objectives.'
Because of this, make sure that your plan can be modified depending on the audience reading your plan. However, keep these alterations limited from one plan to another. This means that when sharing financial projections, you should keep that data the same across the board.
Related: 7 Steps To A Winning Business Proposal
7. Explain why you care.
Whether you're sharing your plan with an investor, customer or team member, your plan needs to show that you're passionate and dedicated, and you actually care about your business and the plan. You could discuss the mistakes that you've learned, list the problems that you're hoping to solve, describe your values, and establish what makes you stand out from the competition.
When I started my payments company, I set out to conquer the world. I wanted to change the way payments were made and make it easier for anyone, anywhere in the world to pay anyone with few to no fees. I explained why I wanted to build this. My passion shows through everything I do.
By explaining why you care about your business you create an emotional connection with others so that they'll support your organization going forward.
Every business owner needs to establish a direction for their company. Luckily, you can do just that by creating a business plan. It serves as a roadmap for how to structure, run and grow your operation. It helps you:
- Plan for the future
- Establish clear goals
- Find weaknesses you can address
It can even help you get funding or express your business idea to investors if you're trying to start a business. But how do you create a business plan? To find out, read through the steps below:
How to Write a Business Plan Step by Step
1. Executive Summary
Your executive summary explains who your company is and why it will be successful. In this section, you'll want to briefly explain your product or services and company's structure.
If you're writing your business plan to ask for financing from investors, you'll want to include high-level financial information. You can also mention your growth plan and then elaborate on it later to provide more in-depth details.
The executive summary is also the place to outline and explain your company's goals. This helps document your business' direction. Keep in mind that this section of your business plan shouldn't be over two pages in length. You'll want it to be a quick read for someone who doesn't have time to look through the whole report.
2. Company Details
This section of your business plan should start by outlining your industry. So if you own a store, you'll want to discuss your retail environment in detail. You can also highlight any expertise or experience you have within your industry. So, if you own a jewelry store and have years of experience making items, be sure to highlight that.
When discussing your industry, include details about your competitors. You'll want to mention their products and services, but it's okay to keep it brief in this section. You'll elaborate more about competitors in your marketing section of the plan.
3. Description of Products or Services
Your lineup of products and services is one of the most important aspects of your business. So, in this section of your plan, you'll want to include a detailed description of them. Be sure to specify how each will benefit your customers and why they need them. You'll also want to detail:
- Cost
- Features
- Distribution
- Target market
- Competing products
4. Market Analysis & Strategy
Before you write your business plan, you should conduct thorough market research. This will include what your customers' needs and preferences are. This will help you define your target market. And once you know who your clients are, you can conduct your research by:
- Giving out customer surveys and questionnaires
- Holding focus groups and in-depth interviews
- Looking at existing studies for your industry
- Finding out what your customers are saying on social media
- Seeing how many alternative products exist and how much people pay for them
- Looking into the income range and location of your potential clients
Your marketing plan is also a good spot to highlight your strengths and weaknesses. You can even use a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. These can help you see clearly what areas of your operation need improvement.
5. Company Organization & Management
The success of your business will depend on the people that run it. So you'll want to make sure you include an organizational chart with departmental descriptions and your management team. You'll also want to list any board members or advisors.
Typically, this section features your employees':
- Photos
- Contact information
- Job titles
Having a clearly outlined organizational chart is also helpful for managing your employees and making sure the internal structure of your company is efficient.
6. Financial Plan
Generally, it's a good idea to get your accountant's help when you create the financial planning section of your business plan. You'll want their expertise as you document your company's:
- Financial projections
- Budget estimates
Business Plan Examples
Some key financial elements you may want to include are your:
How To Write A Business Plan Uk
- Financial statements
- Cash flow projections
- Sales revenue estimates for each quarter and year
- Expenses
Writing a Business Plan: Use a Template
Not sure how to write a business plan template? There are several different ways that business owners and small businesses can outline their plans. You can utilize our small business template or you can also use the Small Business Administration's (SBA) guide or Service Corps of Retired Executives (SCORE) template.
Check out our business plan template.
More Tips for Writing a Business Plan
Writing your business plan is going to take work. But once it's done, it'll help provide direction, focus and organization to your operation. This will only help you achieve even more success.
Some more tips to consider when writing your plan include:
- Do your market research first. This can help you learn more about your customers and target audience, which is relevant to other sections throughout your plan. It'll also gives you insight into your competitors and industry.
- Write for your audience. This makes your document more relatable to those that read it.
- Keep it short. Making your plan concise will help others not only understand it but also remember it. This is important for gaining investors and for helping your workforce put your plan into action.
- Have someone review it. Ideally, you should proofread your document more than once. You may even want your employees to look through it to see if they have anything to add or edit.
- Remember to use it. After all this work, you don't want to just file it away and forget about it.
3. Description of Products or Services
Your lineup of products and services is one of the most important aspects of your business. So, in this section of your plan, you'll want to include a detailed description of them. Be sure to specify how each will benefit your customers and why they need them. You'll also want to detail:
- Cost
- Features
- Distribution
- Target market
- Competing products
4. Market Analysis & Strategy
Before you write your business plan, you should conduct thorough market research. This will include what your customers' needs and preferences are. This will help you define your target market. And once you know who your clients are, you can conduct your research by:
- Giving out customer surveys and questionnaires
- Holding focus groups and in-depth interviews
- Looking at existing studies for your industry
- Finding out what your customers are saying on social media
- Seeing how many alternative products exist and how much people pay for them
- Looking into the income range and location of your potential clients
Your marketing plan is also a good spot to highlight your strengths and weaknesses. You can even use a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. These can help you see clearly what areas of your operation need improvement.
5. Company Organization & Management
The success of your business will depend on the people that run it. So you'll want to make sure you include an organizational chart with departmental descriptions and your management team. You'll also want to list any board members or advisors.
Typically, this section features your employees':
- Photos
- Contact information
- Job titles
Having a clearly outlined organizational chart is also helpful for managing your employees and making sure the internal structure of your company is efficient.
6. Financial Plan
Generally, it's a good idea to get your accountant's help when you create the financial planning section of your business plan. You'll want their expertise as you document your company's:
- Financial projections
- Budget estimates
Business Plan Examples
Some key financial elements you may want to include are your:
How To Write A Business Plan Uk
- Financial statements
- Cash flow projections
- Sales revenue estimates for each quarter and year
- Expenses
Writing a Business Plan: Use a Template
Not sure how to write a business plan template? There are several different ways that business owners and small businesses can outline their plans. You can utilize our small business template or you can also use the Small Business Administration's (SBA) guide or Service Corps of Retired Executives (SCORE) template.
Check out our business plan template.
More Tips for Writing a Business Plan
Writing your business plan is going to take work. But once it's done, it'll help provide direction, focus and organization to your operation. This will only help you achieve even more success.
Some more tips to consider when writing your plan include:
- Do your market research first. This can help you learn more about your customers and target audience, which is relevant to other sections throughout your plan. It'll also gives you insight into your competitors and industry.
- Write for your audience. This makes your document more relatable to those that read it.
- Keep it short. Making your plan concise will help others not only understand it but also remember it. This is important for gaining investors and for helping your workforce put your plan into action.
- Have someone review it. Ideally, you should proofread your document more than once. You may even want your employees to look through it to see if they have anything to add or edit.
- Remember to use it. After all this work, you don't want to just file it away and forget about it.
How To Write A Business Plan Free
Whether your business is new or old, has an existing business plan or still needs one, you'll want to spend some time either creating a plan or making sure yours is up to date. Not only will it add focus, direction and unity in your operation, but it'll help you stay successful for years to come.
How To Write A Business Plan For Dummies
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