If you are running a business or you are about to start one, it is important to have a business plan. To do this, you need to know the steps in writing a business plan. There are so many reasons why you should have a business plan.
First of all, a business plan is your guide all through the business. It acts as a map to show you how you are supposed to drive your business, goals to achieve, and estimates of income and expenditure. If you don’t know how to write one, you can get a simple business plan example online.
Another reason why you should get a business plan is because of prospective investors. In the event that you don’t have enough funds to run your business, you may need to take loans or seek external investors. No one wants to make a bad investment. The only way to prove to these investors or the bank that your business idea is profitable is by presenting a business plan.
If you are going to write a great business plan, you need to understand the steps in writing a business plan. In this post, we will take a look at these steps and also the contents of a good business plan.
Steps in Writing a Business Plan
If you have never written a business plan before, it might be quite challenging to write your first one. Don’t worry if it is your first time, our steps in writing a business plan has got you. It is not rocket science and it does not require a lot of expertise.
Follow these steps and you would have your professional business plan ready in no time.
Research as much as you can
Sure, your business is not a school project, however, it is your pet project. This means you have to take time to research. The reason why most businesses fail is that the owners fail to carry out sufficient research before setting out.
Wondering what you need to research? There’s a lot including your product, your target market, and other businesses offering the same product or service. In fact, the time taken to conduct your research might double the time used in writing down your business plan.
This is the bottom line, before you put pen to paper, or go on your laptop to write a plan, know about the business. The research will require you to read a lot and speak to individuals from your target market.
Figure out the purpose of your plan
Generally, a business plan is a document that provides information about a business, its product, marketing strategies, and finances (present and future). As we have stated earlier, a business plan serves several purposes.
You can write a business plan for the following purposes:
- To guide you as an entrepreneur.
- As a guide for employees and members of your board.
- To seek investors.
- To get a loan from the bank.
For each of these purposes, your plan has to be a bit different. This means that you have to figure out the purpose of the business plan or who you are writing for before you start. Make sure you understand your reading audience properly and write to suit their needs. Just so you know, this is one of the most important steps in writing a business plan.
Build a Company Profile
You must have visited the “About Page” of different websites. This page tells you about the owners of the website, their history, and their achievements. It also gives an insight into the mission and vision statements of such organizations as well as their goals and objectives.
If you go through any free sample business plan, you will find this information. This is what tells the reader about you and what is unique about your business idea. It doesn’t have to be extensive but make sure it summarizes what you stand for and how you plan to solve problems.
Asides being an essential component of your business plan, it is one of the first parts that capture the reader. So if you don’t already have a company profile, draw one up today.
Document the different sections of your business
Every piece of information is important, especially when you want to woo an investor or get a loan. Writing a business plan requires you to be as detailed as possible. Like we said earlier, no investor wants to make a bad investment.
Because of this, they want to see your proposed cash flow, projected income and expenditure, the industry projections, etc. You also need to disclose information about your operations. This is basically how you will run the business, how many staff you hope to have and their specific responsibilities.
Also, include your business location and different licenses you need.
Draw up a marketing plan
You cannot think of the steps in writing a business plan without considering a marketing plan. It is important that you draw up specific marketing objectives to push your products and services. If you don’t have these in place, it may spell doom. Don’t know how? Here are a few pointers:
- Discuss how to introduce your product or service to the target market.
- How can you extend the market for an existing product or service?
- Be specific about boosting sales for your products.
- Do you desire to strike long-term contracts with loyal clients?
- How to raise your prices without reducing your sales.
- Method of marketing which may be physical or virtual.
When writing your marketing plan, you need to be as specific as possible with the information. This means you must state how much you plan to spend on each stage of your marketing. Draw up terms and conditions for long-term contracts and come up with specific marketing tactics.
Also, Check [ Poultry Farming Business Plan For Nigerians]
In the end, it all boils down to being able to aggressively market your product or service to the market. If you can put these plans down, then you are almost ready to start writing your business plan.
Adapt your plan to suit your audience
Even if you take these steps in writing a business plan for one audience, chances are you need to share the plan with another audience. Each audience has a set of specific interests so you need to figure that out.
You don’t have to start writing your business plan all over, you just need to focus on the interests of your audience and amplify them. This may take a bit more of your time but it is worth it in the end.
One thing you should ensure as you do this is that information must be kept consistent across all versions of your plan.
Do not be vague
Many business plans do not show the passion of the entrepreneur which why most don’t get the desired attention. It is very unlikely that the reader will go through the plan while you are present. This means you don’t have the opportunity of explaining your business plan step by step.
However, if your business plan is written with the passion that you carry for the business, it speaks on your behalf. Anyone can get convinced to invest so be deliberate with discussing your drive about the idea. Talk about the problems to solve and the approaches you intend to employ.
Sections in a Business Plan
Our steps in writing a business plan post will not be complete without this section. Here we show you how to write a business plan step by step, though not in full detail. These are the different sections that your business plan is expected to have.
- Executive Summary – It is just like the abstract or summary of the whole business plan. It is the last to be written yet it comes first.
- Company description – This is made up of your company profile, your mission and vision statement, achievements, and objectives. It also takes up a page at most.
- Market analysis – A research on the industry, current market state, and the existing competitors.
- Organization and Management – This is also known as operations as it discusses your business structure.
- Product or service
- Marketing and sales – Discuss your marketing strategies and how you intend to grow your brand.
- SWOT Analysis – SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. You can carry this out yourself or seek out the help of experts. It is one of the most important aspects of your business plan as it explains how your product or service will thrive against the competition.
- Financial Projections – This may include balance sheets but must show income and expenditure, profits, and the breakeven point. All of these will lead you to calculate your profitability index which tells if the business is viable or not. Again, this section may require the help of a professional.
- Funding request – This is important if you are writing to seek an infusion of capital into your business via loan or investment.
- Appendix – This is optional and it shows all the necessary permits, licenses, resumes, etc.
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