7 Steps to Write a Perfect Business Plan
Every startup needs a definitive business plan to more efficiently organize its goals and vision for the future. In most cases this plan is critical in directing a business and attracting investors. A business plan usually includes the following steps:
- Executive summary -- a snapshot of your business
- Company description -- describes what you do
- Market analysis - research on your industry, market and competitors
- Organization and management -- your business and management structure
- Service or product -- the products or services you’re offering
- Marketing and sales -- how you’ll market your business and your sales strategy
- Funding request -- how much money you’ll need for next 3 to 5 years
- Financial projections -- supply information like balance sheets
- Appendix -- an optional section that includes résumés and permits
If the proper amount of work is put into this plan, new companies have a much larger chance of success. Overall, there are seven main steps to construct the proper business plan.
Research, Research, Research
It is critical for companies to extensively research their product or service and how it fits into the market. William Pirraglia, a now-retired senior financial and management wrote that entrepreneurs should, “Consider spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan.” In order to write and effective business plan, entrepreneurs need to have a full knowledge of their company, product, competition, and market. This research is also beneficial because it forces new business owners to understand every aspect of their company. This education is critical especially for when they look for potential investment.
Determine the Purpose of the Plan
A business plan, as defined by Entrepreneur, is a “written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.” However, a business plan can serve several different purposes. Another service a business plan can provide is a plan for the future of the business so as to avoid possible complications. On the other hand, if the plan is presented to investors it needs to be far more concise.
Create a Company Profile
A company profile includes its history, its products and services offered, its target audience and market, its unique aspects, and the problem it solves. Company profiles are often found on the company’s website and are used to attract potential customers and investors. Overall, a company profile provides an overview of the business and highlights its key aspects. These characteristics are the ones which set the company apart from its competition and attract buyers.
Document All Aspects of the Business
Investors want to make sure that a company they fund will ultimately make them money. As a result, they will want extensive detail on the finances of the business. To help with this process, it is important to document everything including expenses, cash flow and industry projections. Furthermore, any legal documents or market strategies should also be documented and provided to investors.
Have a Strategic Marketing Plan
An effective business plan will always contain a strategic and aggressive marketing plan. The following objectives should be included in a marketing plan:
- 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 a set of goals and tactics needed to achieve said goals. In the objective section of the marketing plan it is important to address the “what” and “why” of the marketing tasks for the year ahead. In the implementation section it is critical to focus on the “who,” “when,” “where,” and “how.” Overall, these objectives will bring costs to the business. Therefore, in the marketing plan it is important to include the amount of money contributed towards marketing.
Make it Adaptable
The potential readers of a business plan range from employees to consumers, and sometimes even venture capitalists. In addition, each type of reader has a different set of interests. As a result, if these particular interests are known beforehand, entrepreneurs can tailor their respective business plan for a certain audience. For example, bankers will be more interested in the financials such as cash flow statements and balance sheets. On the other hand, venture capitalists will focus more on the basics of the business concept as well as the management team. These differences illuminate the need for flexibility within business plans.
Explain Why You Care
A business plan needs to show that an entrepreneur is dedicated about his or her business. Whether the audience is a client or investor passion is always something that is evaluated. If an entrepreneur demonstrated little interest in the business why should the audience? Entrepreneurs could discuss the mistakes they have made, list the problems they are hoping to solve, and demonstrate what makes them stand out from the competition. All of this information demonstrates a clear passion for the business that investors and customers look for in a startup owner.
Starting a new company may seem like a daunting task without a clear plan. However, with the creation of a unique and efficient business plan entrepreneurs can develop a clear outline for the future of the company.
Rampton, J. (2019, February 20). 7 Steps to a Perfectly Written Business Plan. Retrieved July 4, 2019, from https://www.entrepreneur.com/article/281416