How to Prepare and Write the Perfect Business Plan for Your Company

Curated by WorkingFromHome

This article is an excerpt from the original article found in the Read More link – please follow for full article.

Here’s how to write a business plan that will formalize your company’s goals and optimize your organization.

15+ min read

Are you preparing to start your own business but uncertain about how to get started? A business plan ought to be one of the first steps in your entrepreneurial journey because it will organize the ideas that have been spinning around in your brain and prepare you to seek funding, partners and more.

What is a business plan?

A business plan is a detailed document that outlines a company’s goals and how the business, well, plans to achieve those goals over the next three or more years. It helps define expected profits and challenges, providing a road map that will help you avoid bumps in the road. 

Stever Robbins writes in an Entrepreneur article titled, “Why You Must Have a Business Plan,” that a business plan “is a tool for understanding how your business is put together…. Writing out your business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan and staffing plan.” But, a business plan is about more than just reviewing the past state of your business or even what your business looks like today. 

Robbins writes that a well-written business plan will help you drive the future by “laying out targets in all major areas: sales, expense items, hiring positions and financing goals. Once laid out, the targets become performance goals.”

The business plan can help your company attract talent and funding, because when prospects ask about your business, you already have an articulated overview to offer them. How they react can allow you to quickly understand how others see your business and pivot if necessary.

What should you do before you write your business plan?

It might sound redundant, but you actually need to plan your business plan. Business plans can be complicated, and you’ll be held accountable for the goals you set. For example, if you plan to open five locations of your business within the first two years, your investors might get angry if you only manage to open two.

That’s why it’s essential that, before writing your business plan, you spend some time determining exactly which objectives are essential to your business. If you’re struggling to come up with a list of goals on your own, Entrepreneur article “Plan Your Business Plan” offers some questions you can ask yourself to spark some inspiration.

  1. How determined am I to see this venture succeed?

  2. Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?

  3. What’s going to happen to me if this venture doesn’t work out?

  4. If it does succeed, how many employees will this company eventually have?

  5. What will be the business’s annual revenue in a year? What about in five years?

  6. What will be the company’s market share in that amount of time?

  7. Will the business have a niche market, or will it sell a broad spectrum of goods and services?

  8. What are my plans for geographic expansion? Should it be local or national? Can it be global?

  9. Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?

  10. If I delegate, what sorts of tasks will I share? Will it be sales, technical work or something else?

  11. How comfortable am I taking direction from others? Can I work with partners or investors who demand input into the company’s management?

  12. Is the business going to remain independent and privately owned, or will it eventually be acquired or go public?

It’s also essential to consider your financial goals. Your business might not require a massive financial commitment upfront, but it probably will if you’re envisioning rapid growth. Unless you’re making your product or service from scratch, you’ll have to pay your suppliers before your customers can pay you, and as “Plan Your Business Plan” points out, “this cash flow conundrum is the reason so many fast-growing companies have to seek bank financing or equity sales to finance their growth. They are literally growing faster than they can afford.”

How much financing will you need to start your business? What will you be willing to accept? If you’re desperate for that first influx of cash, you might be tempted to accept any offer, but doing so might force you to either surrender too much control or ask investors for a number that’s not quite right for either side.

These eight questions can help you determine a few financial aspects of your planning stages:

  1. What initial investment will the business require?

  2. How much control of the business are you willing to relinquish to investors?

  3. When will the business turn a profit?

  4. When can investors, including you, expect a return on investment?

  5. What are the business’s projected profits over time?

  6. Will you be able to devote yourself full-time to the business?

  7. What kind of salary or profit distribution can you expect to take home?

  8. What are the chances the business will fail, and what will happen if it does?

You should also consider who, primarily, is going to be reading your business plan, and how you plan to use it. Is it a means of raising money or attracting employees? Will suppliers see it? 

Lastly, you need to assess the likelihood of whether you actually have the time and resources to see your plan through. It might hurt to realize the assumptions you’ve made so far don’t actually make a successful business, but it’s best to know early on, before you make further commitments.

Related: Need a Business Plan Template? Here Is Apple’s 1981 Plan for the Mac.

How to Write a Business Plan

Once you’ve worked out all the questions above and you know exactly what goals you have for your business plan, the next step is to actually write the darn thing. A typical business plan runs 15 to 20 pages but can be longer or shorter, depending on the complexity of the business and the needs of your venture. Regardless of whether you intend to use the business plan for self-evaluation or to seek a seven-figure investment, it should include nine key components, many of which are outlined in Entrepreneur’s introduction to business plans:

1. Title page and contents

Presentation is important, and a business plan should be presented in a binder with a cover that lists the business’s name, the principals’ names and other relevant information like a working address, phone number, email and web address and date. Write the information in a font that’s easy to read and include it on the title page inside, too. Add in the company logo and a table of contents that follows the executive summary

2. Executive summary

Think of the executive summary as the SparkNotes version of your business plan. It should tell the reader in as few words as possible what your business wants and why. The executive summary should address these nine things:

  1. The business idea and why it is necessary. (What problem does it solve?) 

  2. How much will it cost, and how much financing are you seeking? 

  3. What will the return be to the investor? Over what length of time? 

  4. What is the perceived risk level? 

  5. Where does your idea fit into the marketplace? 

  6. What is the management team? 

  7. What are the product and competitive strategies?

  8. What is your marketing plan? 

  9. What is your exit strategy?

When writing the executive summary, remember that it should be somewhere between one-half page to a full page. Anything longer, and you risk losing your reader’s attention before they can dig into your business plan. Try to answer each of the questions above in two or three sentences, and you’ll wind up with an executive summary that’s about the right length.

Related: First Steps: Writing the Executive Summary of Your Business Plan

3. Business description

You can fill anywhere from a few paragraphs to a few pages when writing your business description, but try again to keep it short, with the understanding that more sections will follow. The business description typically starts with a short explanation of your chosen industry, including its present outlook and future possibilities. Use data and sources (with proper footnotes) to explain the markets the industry offers, along with the developments that will affect your business. That way, everyone who reads the business description, particularly investors, will see that they can trust the various information contained within your business plan. 

When you pivot to speaking of your business, start with its structure. How does your business work? Is it retail, service-oriented or wholesale? Is the business new or established? Is the company a sole proprietorship, partnership or corporation? Who are the principals and who are your customers? What do the distribution channels look like, and how can you support sales?

Next, break down your business’s offerings. Are you selling a physical product, SaaS or a service? Explain it in a way that a reader knows what you’re planning to sell and how it differentiates itself from the competition (investors call this a Unique Selling Proposition, or USP, and it’s important that you find yours). Whether it’s a trade secret or a patent, you should be specific about your competitive advantage and why your business is going to be profitable. If you plan to use your business plan for fundraising, you can use the business description section to explain why new investments will help make the business even more profitable.  

This, like everything else, can be brief, but you can tell the reader about your business’s efficiency or workflow. You can write about other key people within the business or cite industry experts’ support of your idea, as well as your base of operations and reasons for starting in the first place. 

4. Market strategies

Paint a picture about your market by remembering the four Ps: product, price, place and promotion. 

Start this section by defining the market’s size, structure and sales potential. What are the market’s growth prospects? What do the demographics and trends look like right now? 

Next, outline the frequency at which your product or service will be purchased by the target market and the potential annual purchase. What market share can you possibly expect to win? Try to be realistic here, and keep in mind that even a number like 25% might be a dominant share.

Next, break down your business’s plan for positioning, which relates to the market niche your product or service can fill. Who is your target market, how will you reach them and what are they buying from you? Who are your competitors, and what is your USP?

The positioning statement within your business plan should be short and to the point, but make sure you answer each of those questions before you move on to, perhaps, the most difficult and important aspect of your market strategy: pricing. 

In fact, settling on a price for your product or service is one of the most important decisions you have to make in the entire business plan. Pricing will directly determine essential aspects of your business, like profit margin and sales volume. It will influence all sorts of areas, too, from marketing to target c

Source: Entrepreneur.com

Read more:
How to Prepare and Write the Perfect Business Plan for Your Company

You May Also Like…

Married to Your Business Partner? Here’s How to Navigate Both Relationships.

Married to Your Business Partner? Here’s How to Navigate Both Relationships.

Married couples who run their businesses together face unique challenges, but they can also be extraordinarily successful. June 22, 2021 6 min read Opinions expressed by Entrepreneur contributors are their own. Marriage is tough. It’s more difficult than anyone realizes from the outside looking in. No matter how perfect your dating relationship is, marriage takes things to a whole new level. Couples find out what their marriage is really made of when challenges arise. For some, pressure and friction strengthen their relationship. For others, small fractures that were previously hidden transform into active fault lines that cause irreparable damage.Likewise, starting and managing a business is tough. It’s not nearly as sleek or sexy as they make it look in glossy business magazines. The work is gritty, the hours are long, and failure is plentiful. Few entrepreneurs make it past the first couple of years. Of those that do, there’s a long…

These 5 Branding Factors Will Take Your Business to the Next Level

These 5 Branding Factors Will Take Your Business to the Next Level

The importance of branding in business is undeniable. No matter what industry you are in, there will always be someone who offers the same product or service that you do. June 22, 2021 3 min read Opinions expressed by Entrepreneur contributors are their own. The importance of branding in business is undeniable. No matter what industry you are in, there will always be someone who offers the same product or service that you do. What sets your offering apart is the brand attached to it. Building a brand takes time and a lot of effort, but any business or entrepreneur who takes the brand-building process to heart will experience more success. But we need to realize that branding is more than just a logo. It’s about the experience as a whole. That includes the visual and tangible, and even the intangible aspects of your business experience. Unfortunately, many business owners today…

Working From Home TV …

Tips to enhance your own website…

How to “Easily” Create Custom WooCommerce Thank You Pages – Website Tips

How to “Easily” Create Custom WooCommerce Thank You Pages – Website Tips

Do you want to easily create a custom WooCommerce thank you page? A custom thank you page for order confirmation is a great way to connect with your new customers and even get additional sales. In this article, we’ll show you how to create a custom WooCommerce thank you page, step by step. Why Customize a WooCommerce Thank You Page in WordPress? Creating a custom WooCommerce thank you page gives you a way to connect with your customers when they make a purchase. The order confirmation or thank you page may seem like a small part of your online store, but it can actually be a very valuable part of your sales process. The problem is that default WooCommerce thank you page isn’t really optimized for conversions. This is why smart business owners build a well-designed and high-converting thank you page to replace the default option. There are a lot…

How to Connect Microsoft Outlook to WordPress (Step by Step) – Website Tips

How to Connect Microsoft Outlook to WordPress (Step by Step) – Website Tips

Are you looking for a way to use your Microsoft Outlook account to send emails from your WordPress website? Connecting Microsoft Outlook with WordPress helps improve email deliverability by making sure that your emails reach your subscriber’s inbox, even if you’re sending a lot of them. In this article, we’ll show you step by step how to connect Microsoft Outlook to WordPress. Why Use Microsoft Outlook to Send WordPress Emails? Using Microsoft Outlook is a great option for business owners who regularly use Office 365. You can use your existing account to send emails to your subscribers from your WordPress website. The best part about using Outlook is that it allows you to send a lot of emails at once. You can send up to 10,000 emails per minute, which is a much higher limit than other mailing services. If you have a busy online store, then this will help…

What’s Coming in WordPress 5.8 (Features and Screenshots) – Website Tips

What’s Coming in WordPress 5.8 (Features and Screenshots) – Website Tips

WordPress 5.8 beta is out with an expected release date of July 20th, 2021. It will be the second major release of the year and comes with lots of new features and improvements. We’ve been following the development closely and trying out the new features on our test sites. In this article, we’ll show you what’s coming in WordPress 5.8 with features and screenshots. Note: You can try out the beta version on your computer or on a staging environment by using the WordPress Beta Tester plugin. Introducing Template Editor WordPress 5.8 will ship with the new template editor. It is a step towards creating a full site editing tool using the block editor, which means you can expect it to get better with future releases. The template editor allows you to create and save templates for your WordPress website and use them later for any post or page. Switching…

0 Comments

Submit a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.