Starting a company without writing a business plan is like going for a road trip without a map. You might reach your destination, but you’ll probably get lost a couple of times in the process. A business plan helps you see the big picture, lay out your goals, and take fruitful steps.
Best of all, it doesn’t need an experienced professional. Through the following step-by-step guide, you’ll know how to write a business plan that truly works. Without any further ado, let’s get going!
How to Write a Business Plan in 9 Steps
Before getting to the actual steps, we need to first identify the basic structure of a business plan. Highlighting the big picture before handling the small details is always crucial for understanding complex subjects.
A business plan is a written document that discusses everything about your business. It describes the general idea, identifies the goals, and explains how your company is supposed to reach these goals.
That said, a business plan has three major parts: company description, market analysis, and financial plan. I’ll point to a bunch of other secondary sections on the way, though. I just wanted to keep things simple at first.
Step 1: The Formating
The business plan is primarily intended to be a personal reference to help the people working in the company. Nevertheless, it’s the first document that you present for potential investors to consider funding you. If it’s not properly organized, they’ll be more likely to pass, even if you have a killer concept.
The Roman numeral system is the most widely accepted format. Use it to number your sections to make it easier for people to jump into a specific part.
Step 2: Write the Company Description (Section II)
Your plan should start by writing the basics of your business in the company description. Briefly identify the nature of your business, the problem you’re trying to solve, your products or services, your target customers, and competitors.
It’s crucial to highlight the most unique competitive points that should increase the likelihood of your success. Do you have an unprecedented feature? Do you have famous experts in your team? Will you open in a place that has an ideal customer flow?
In the final plan, the company description should be the second section. The first is a general overview called “executive summary” that I’ll talk about at the end of this post.
Step 3: Write the Market Analysis (Section III)
The market analysis is where you’ll break down every detail about your competitors. What are their strategies? How did they achieve their goals? Were there any mistakes that hindered their growth?
This part is crucial if you want to land an investment soon. This is where an investor would decide to consider either you or one of your competitors.
Step 4: Explain Your Management Hierarchy (Section IV)
You’ve talked about your business, now it’s time to introduce your team. For optimal clarity, it’s better to include an organizational chart that highlights who’s in charge of what in your company.
You can also mention the previous experience of your team members. But avoid speaking about history that doesn’t directly relate to your industry, or else you might bore your readers.
Step 5: Describe the Service or Product Line (Section V)
In this section, you have to establish every small detail about the service or the product you’re offering. What’s the need you’re satisfying? What makes you unique?
For physical products, it’s important to explain the planned life cycle or production line. If you did some research based on a prototype, you should describe this process and honestly detail its results, regardless of how good or bad they look. Explaining negative aspects and planning a way to get around them would show how serious you are about the whole thing.
Step 6: Consider the Marketing and Sales Strategy (Section VI)
Based on the information stated in sections III and V, you should start talking about the actual steps through which you’ll sell your product or service. Are you planning to use billboards, create a website, or depend on social media?
Step 7: Establish a Funding Request (Section VII)
Obviously, this is the part that an investor would care about the most. You’ll probably need to edit it dozens of times to make sure it’s written in the best form.
Start by stating how much money you’ll need for the next 5 years and how exactly are you planning to use it. Will you buy equipment, hire experts, do research, or cover bills?
Then, explain the nature of the requested funding. Do you want debt or equity? Do you have any special terms in mind?
If your business has been running for a while, it’d be necessary to include financial statements talking about your expenditure history.
Step 8: Write the Executive Summary (Section VIII)
After writing all the previous details, it’s time to summarize them in the executive summary. Don’t dwell too much on a single topic. Try to mention the most important highlights that would make the reader curious to head to the respective sections to know more details.
Although there’s no ideal length, try to keep this part shorter than 2 pages to prevent boredom.
Step 9: Proofread, Proofread, Proofread (Section IX)
It’s totally absurd to ask for a whopping fund by using a poorly-written business plan. The presence of grammatical and structural errors would tell the reader that you’re too lazy to do your work.
That’s why it’s critical to revise the plan dozens of times before handing it out. Read the sentences out loud to make the mistakes sound clearer to your ears.
Preferably, editing should be carried out by more than one person. This would point out problems that you couldn’t notice.
I hope this humble guide has clearly explained how to write a business plan. Remember, this plan is supposed to help your business in the first place. So make sure to stay 100% honest about every detail.
For an ultimate presentation, include a professional cover with your business plan. It doesn’t have to be fancy. Just write a catchy title alongside your company’s name, logo, and contacts.