Every business owner needs to establish a direction for their company. Luckily, you can do just that by creating a business plan. It serves as a roadmap for how to structure, run and grow your operation. It helps you:
- Plan for the future
- Establish clear goals
- Find weaknesses you can address
It can even help you get funding or express your business idea to investors if you’re trying to start a business. But how do you create a business plan? To find out, read through the steps below:
How to Write a Business Plan Step by Step
1. Executive Summary
Your executive summary explains who your company is and why it will be successful. In this section, you’ll want to briefly explain your product or services and company’s structure.
If you’re writing your business plan to ask for financing from investors, you’ll want to include high-level financial information. You can also mention your growth plan and then elaborate on it later to provide more in-depth details.
The executive summary is also the place to outline and explain your company’s goals. This helps document your business’ direction. Keep in mind that this section of your business plan shouldn’t be over two pages in length. You’ll want it to be a quick read for someone who doesn’t have time to look through the whole report.
2. Company Details
This section of your business plan should start by outlining your industry. So if you own a store, you’ll want to discuss your retail environment in detail. You can also highlight any expertise or experience you have within your industry. So, if you own a jewelry store and have years of experience making items, be sure to highlight that.
When discussing your industry, include details about your competitors. You’ll want to mention their products and services, but it’s okay to keep it brief in this section. You’ll elaborate more about competitors in your marketing section of the plan.
3. Description of Products or Services
Your lineup of products and services is one of the most important aspects of your business. So, in this section of your plan, you’ll want to include a detailed description of them. Be sure to specify how each will benefit your customers and why they need them. You’ll also want to detail:
- Target market
- Competing products
4. Market Analysis and Strategy
Before you write your business plan, you should conduct thorough market research. This will include what your customers’ needs and preferences are. This will help you define your target market. And once you know who your clients are, you can conduct your research by:
- Giving out customer surveys and questionnaires
- Holding focus groups and in-depth interviews
- Looking at existing studies for your industry
- Finding out what your customers are saying on social media
- Seeing how many alternative products exist and how much people pay for them
- Looking into the income range and location of your potential clients
Your marketing plan is also a good spot to highlight your strengths and weaknesses. You can even use a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. These can help you see clearly what areas of your operation need improvement.
5. Company Organization and Management
The success of your business will depend on the people that run it. So you’ll want to make sure you include an organizational chart with departmental descriptions and your management team. You’ll also want to list any board members or advisors.
Typically, this section features your employees’:
- Contact information
- Job titles
Having a clearly outlined organizational chart is also helpful for managing your employees and making sure the internal structure of your company is efficient.
6. Financial Plan
Generally, it’s a good idea to get your accountant’s help when you create the financial planning section of your business plan. You’ll want their expertise as you document your company’s:
- Financial projections
- Business forecasts
- Budget estimates
Some key financial elements you may want to include are your:
- Financial statements
- Cash flow projections
- Sales revenue estimates for each quarter and year
Writing a Business Plan: Use a Template
Not sure how to write a business plan template? There are several different ways that business owners and small businesses can outline their plans. You can utilize our small business template or you can also use the Service Corps of Retired Executives (SCORE) template.
Check out our business plan template.
More Tips for Writing a Business Plan
Writing your business plan is going to take work. But once it’s done, it’ll help provide direction, focus and organization to your operation. This will only help you achieve even more success.
Some more tips to consider when writing your plan include:
- Do your market research first. This can help you learn more about your customers and target audience, which is relevant to other sections throughout your plan. It’ll also gives you insight into your competitors and industry.
- Write for your audience. This makes your document more relatable to those that read it.
- Keep it short. Making your plan concise will help others not only understand it but also remember it. This is important for gaining investors and for helping your workforce put your plan into action.
- Have someone review it. Ideally, you should proofread your document more than once. You may even want your employees to look through it to see if they have anything to add or edit.
- Remember to use it. After all this work, you don’t want to just file it away and forget about it.
Whether your business is new or old, has an existing business plan or still needs one, you’ll want to spend some time either creating a plan or making sure yours is up to date. Not only will it add focus, direction and unity in your operation, but it’ll help you stay successful for years to come.
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