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How To Write a Business Plan
Ultimate guide to writing a business plan for your small business
What is a business plan?
A business plan is a document that describes your ideas and objectives for your business. It includes details about your product or service and when it will become available. Whether you’ve been in business for a long time or you’re just getting started, a plan will help you make sure you’re organized and on track.
Why write a business plan?
A business plan helps tell your story to a broad audience. It should be comprehensive, well-written and easy to follow. A well-thought-out business plan reassures outside parties that you’ve thought ahead and prepared for this next step in your business venture. A good plan will help ensure that your business is set up correctly from the beginning.
How does a business plan help you start a small business?
When you start your business, it’s essential to follow the outlined steps in a business plan. Writing a plan will help you hit all of your goals from the beginning. It will also save you time in the long run and ensure that everything is running smoothly.
As a new entrepreneur, you may not have the money you need to get your idea off the ground. A business plan is a prerequisite for getting the funds you need.
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How to write a good business plan
The key to writing a successful business plan is to be diligent and thorough. You should try to think through every detail to ensure the plan is realistic. At the same time, you want to be as inclusive as possible so that your plan is easy for other people to read and understand. Your business plan doesn’t need to be complicated or lengthy when you’re first starting. You can always add more specifics later.
The following are areas that you’ll want to include in any small business plan:
Executive summary
This section of the plan should be short but concise. It’s the 1st section your reader should see but the last section you should write. It will give a quick snapshot of your business idea to the reader. This way, you’re able to hit all of the key points without overwhelming them.
The summary should include:
- Your goals for starting your business
- A description of what you’re selling or offering
- How many years you’ve been in business, if applicable
- Your target market
- Your business model
Company overview
This section should contain all the information about your company—who you are, what your industry is, what you do, where you do it, and how much money you want to make. It’s where you’ll write all of your basic information, including:
- A mission statement
- History
- Objectives
Market analysis
Your market analysis will give facts about your customers and competition. It’s where you’ll determine who your target audience is as well as the market’s size and scope. For example, it may include the number of potential customers for your product or service, the size of their income and estimated growth in sales.
Competitive analysis
This section of the business plan is about your competition. It’s designed to help you take a good look at your competitors’ strengths and weaknesses—a strategy that will provide you with a distinct advantage. It will highlight what makes you different and why people should choose you over other companies. Focusing on your strengths will show customers why they should buy your product.
Management and organization
This section should outline the management structure and any additional positions your company will have to meet its goals. It should cover everything from who will be in charge of each department to how long it will take to hire people who meet the qualifications you need. This section should also outline why you need each person in that position, their necessary qualifications, and how long you anticipate they’ll stay with the company.
Product or service description
This is the section where you should describe your product or service in detail. It should cover all of the specifications, as well as any additional features you might need. You should leave a lot of room for expansion, and write this section like a product catalog. The more information you can give about your product or service, the more likely people will be interested in buying it.
Business financials
When it’s time to write your business plan, you’ll want to access the financial data from 3 different places:
- A business cash flow statement
- An income statement
- An asset statement
Your financial information should be accurate and include everything you want to show off about your company. You should use the most relevant information applicable to each section of your business plan.
Appendix
This section of the business plan should contain all the necessary appendices, such as:
- Legal documents
- Employment contract
- All insurance documents
Tips for creating a small business plan
In addition to the sections noted above, keep in mind these tips to help you write an effective business plan.
Keep it concise
If you want people to take your plan seriously, you need to make sure it’s easy for them to understand at a glance. Don’t overload them with excessive information, but don’t make it seem scarce either.
Be organized
If your business plan is disorganized or hard to follow, people are less likely to take you seriously. It doesn’t need to be perfect on your 1st trial, but if things don’t start making sense at some point, stop and go back over it until they do.
Invest time in research
If you’re starting a new business, you need to research it and stay up to date. Investing time in research upfront will help you make wise decisions and make your business plan more thorough.
Proofread
Always make sure that you’ve proofread your plan thoroughly. Have others read it over to catch any mistakes you might have missed.
Know your audience
Try to tailor your plan to the audience you’re trying to impress. Some groups might need financial projections, others want details about how your product is made or works, and others might only be interested in the marketing strategy. Make sure that whatever you include will be helpful for them.
What’s the next step for starting your new business?
Starting a new business can be a daunting project, but if you have the right mindset and do your research, you’re already halfway to a successful business plan or start-up. The most important thing to remember is that the 1st step is often the hardest when you plan to start a new business. Choose your niche carefully, and then develop a plan that will help get you started in that niche and make the rest of the process easier.
