How To Start A Business Plan

Beginning a business is a thrilling and also a stressing task, and among the most important aspects of getting your business idea set up is the business plan. How are you going to start at it? So what actually is the appearance of a business plan? Don’t fret, you are covered. In this handbook, we are going to simplify the steps involved in the initiation of a business plan in a manner that is easy to understand, interesting, and feasible to undertake.

What Is a Business Plan?

A business plan is a document that is used to outline a strategy for your business and serves as a roadmap to how you may proceed to meet your set business objectives. Not only the investors or the banks, but also you. A properly formulated business plan will aid you in clarifying your thoughts, identifying possible pitfalls, and establishing achievable goals. It should be considered as the guiding point of building your whole business.

Step 1: Start With a Powerful Executive Summary

This executive summary can be referred to as the elevator pitch of your business plan. It should be attention-catching because it is the first thing any person sees. You will be writing this part in the beginning, but don’t worry about getting it just right at this time because this is something that you can tidy up at a later date.

Example:

In the case of starting a coffee shop, your executive summary might point to the fact that you plan to open a sleepy town coffee house that would cater to locally grown and organic coffee and pastry. You would also talk about your unique selling point (USP), i.e., you would mention your contribution toward sustainability or about your special coffee blends.

Note that you should ensure that it is small, precise, and big-picture focused. It must entail:

A short explanation of your company
Mission statement
Long-term and short-term goals
In a nutshell, the summary of your products or services
Market potential and growth

Step 2: Define Your Business and Products or Services

This section offers a detailed description of what is done in your business, what kind of services or goods you provide, and how you stand out from the competition.

Example:

In case you are starting a fitness center, explain what you offer, like group exercises, personal training, or wellness roundtables. It would also be nice to tell how your gym would be special, perhaps the high-tech gym with intelligent machines, or specializing in busy professionals and flexible schedules.

This is what should be discussed:

Business structure: Is it either a proprietorship, partnership, or corporation?
The products/services: What are your products, what are you selling, and how are they differentiated?
Pricing: What are the competitors’ charges, and how do you compare with them?
The product or services lifecycle: Will new products or services be released or upgraded after a period?

Step 3: Analyze Your Market and Competitors

An effective business does not live in a vacuum — it lives in a market where there are competitors, market trends, and customer needs. It is quite important to understand your target market to be able to tailor your product offerings, price accordingly, and market it.

Example:

In the case of your coffee shop, you would have to conduct a local study of the market. How many people will want to buy organic coffee in your region? Do any competitors exist already? What distinguishes your shop from others?

Here’s what to write in your own words:

Target audience: Who are they? Age, level of income, interests, etc.
Market trends: Does the industry have any trends which will benefit or affect your business negatively?
Competitor analysis: Who are your competitors, and what are they doing well (or not)?
SWOT analysis: What are the strengths, weaknesses, opportunities, and threats of your business?

Step 4: Marketing and Sales Strategy

Without customers, your business will not go far, and this means that a marketing and sales strategy is important. This is where you want to show your strategy that you will use in order to get customers to be attracted and retained, and how you will end up making sales.

Example:

Assume you have an online boutique that you will be opening. Social media marketing, using influencers, and email marketing might form part of your marketing strategy to reach the ideal customer. On the sales front, you can provide deals such as limited-period offers or bulk packages so that there is a greater sale of the product.

These should be included in your strategy:

In what manner will you address your target population? Social media or advertising on the internet, etc.
Which channels will you employ? (Partnerships, email, direct sales)
Sales tactics: What will you do in terms of turning leads into customers?
Customer retention: How will you make customers loyal to you?

Step 5: Description of Business Operations

What will be the day-to-day running of your business? This part discusses how to manage your business in terms of your team and your supply chain.

Example:

If you are launching a restaurant, you may be interested in mentioning your operating hours, workers, relationship with suppliers, and how you will keep stock.

Make sure you write:

The routines: What do normal days of your business involve?
Employment needs: How many people will you employ and what would their tasks be?
Equipments and technology: What are the resources you require to operate?
Suppliers: Who do you source from, and what are your terms with them?

Step 6: Budgets, Cash Flow, and Financing Needs

Here is where you will state what financial targets you have, the amount of money that you require to commence the business, and also what you anticipate in terms of revenue and profit.

Example:

Opening any business, let alone a boutique, requires you to estimate startup costs (inventory, rent, equipment), projected income based on foot traffic or online sales, and projected profitability. You may divide it into monthly, quarterly, and annual projections.

The important financial items to incorporate are:

Startup costs: What will it take to get your business off the ground?
Funding requirements: What amount of money would you want to invest or raise in the business?
Revenue projections: How much revenue do you expect to receive in the first few years?
Profit and loss forecasts: What are your projections on profits?

Step 7: Executive Team and Personnel

Depending on how many people are administering your business, it is also pertinent to emphasize your team’s strengths and abilities. Your investors would like to know that your business is safe.

Example:

In the case of a tech startup, you may provide experience of your CTO in developing scalable applications and experience of your marketing director in successful campaigns.

This is what to add:

Key Team members: Who will be working on this team? What skills does the team bring?
Roles and responsibilities: What will be the role of each individual on the business?
Structure of management: Will it be a board of advisers, or will it be yourself only?

Step 8: Time Schedule

This is where you will define your milestones and the time you will meet them. It will keep you anchored and will indicate to possible investors that you have a growing plan.

Example:

For your ecommerce, you can publish such milestones as establishing your ecommerce site in one month, launching advertisement campaigns in the third month, and reaching up to 1,000 sales in the sixth month.

Write a description of what you want to achieve with your business:

Short term milestones: What are some of the things that you have to accomplish in the first year?
Long term goals: How do you plan to have your business in 3-5 years?
Action plan: How do you intend to meet these milestones?

Frequently Asked Questions (FAQ)

1. What is the right length of my business plan?

The length of your business plan is supposed to be exhaustive; however, it must be concise enough to be read. A great business plan should include 20-30 pages of content on average, but this may change in your case.

2. When I am only starting small, do I need a business plan?

You may be starting off small, but still, you need a business plan. It can assist you in clarifying your vision, planning on growth, and being aware of possible difficulties. It is also useful in case of funding or a loan requirement.

3. What is the way to determine whether my business plan is realistic?

Research in order to ensure that your business plan is realistic. Test your assumptions through market research, interview industry players, and sources of potential customers.

4. Once I have written this business plan, can I edit it?

Yes! The business plan is a dynamic document. Once your business gets established, your plan must change to take advantage of the changes in the market, new objectives, or shifting strategy.

5. What are pitfalls in writing a business plan?

Common mistakes include being too vague, unrealistic estimation of revenues, failure to identify a clear market, and omitting financial information such as estimating cash flows among others.

Conclusion

There are joys of going into business, but it is not a walk in the park. One of the finest preparations for success is to make a good business plan. These steps are good, and with the help of illustrative examples, you will be well on your way to making your business dreams come true. It is important to remember that your business plan is not permanent; it is a guide that will take you through every step of your business.

Are there other questions you need relating to writing a business plan? Write them in the comments below, and continue with the discussion

Save the pin for later