How to Write a Business Plan (Step-by-Step Guide)
No matter the kind of business you’re starting, either a Small Scale Business or a Large Scale Business, you need a Business Plan.
A business plan is like your roadmap, which guides your business in many ways; Hence knowing How to Write a Business Plan is a must.
Many business owners usually complain that writing a business plan seems to be a difficult thing for them.
Never to worry, if you are among this category of people, then thank your goodness because you’re lucky to be here.
Here on this page, I will share the steps, processes, and vital things involved to write a perfect business plan with you.
I hope you are ready to see them now? Read on.
How to Write a Business Plan (Step-by-Step Guide)
See below the eight steps to follow in Writing a Business Plan, and the business plan format.
Step 1: Create a Summary
The first step to take when learning How to write a Business Plan is to create your Summary.
This should be the first chapter in your business plan explaining what your business is all about, your business stand, and your business’s vision.
Creating an Executive Summary in your business plan should only include the “What, Where and Why” statements of your business idea.
However, this should not be more than one or two-page length of your plan book, and it requires only a short section of your plan.
According to SBA standards, you can make this executive summary for your business plan following the below six steps.
- The Mission Statement
- The General Company Information
- Products and Services
- The Financial Information
- The Future Plans.
It might seem extensive but remember, it’s only the first summary, so you need to make it short and simple.
Bearing in mind that you have the other seven steps left to complete. Hence, this first step will show your readers what they’re getting into.
Step 2: The Company Overview
The second step is to add your Company Overview for your business, either Small scale or Large scale business.
This seems similar to creating an executive summary, but here you only need to present your business’s structure.
You can create your company overview by breaking it down into the following.
- What does your Business do
- The Industry and Marketplace of your Business
- The legal Structure of your Business.
Also, remember to keep your company overview short, just like the executive summary.
Step 3: Market Analysis for Your Business
The next step is to conduct an in-depth market analysis for your business by analyzing the industry, market, and competitors.
The above two steps are meant to be made short while you will need to go into details.
Performing a fair market analysis will help attract investors and make them feel confident that you understand your business.
Hence, to properly show this understanding, you need to make sure your market analysis includes the following.
- The Description of the Industry
- The Overview of the Target Market
- The Characteristics of the Target Market
- The Size and Growth of the Target Market
- The Potential of Your Market Share
- The Marketing Pricing
- The Risk and Barriers
- Competitor Research.
In your quest to learn How to write a business plan, this section usually takes the longest and requires you to provide enough details.
Make sure to prepare and plan out the logic very well for any of the above market analysis sections.
Step 4: The Business Organization
Defining your Business Organization is another step to take here in writing a Business Plan.
Here are the following things you need to define the organization and management structure.
- The Organizational Structure
- The Ownership Structure
- The Background of Owners
- The Board of Directors
- The need for Hiring
Make sure to point out these sections carefully on your plan to help you make a perfect business plan.
Step 5: Product and Services Description
When writing your Business Plan, it is vital to describe your products and services in the plan.
This can be done after describing your business and organizational structure. Then lay out plans for positioning your products/services.
Also, add what your products/services are made for, the needs your product solves, and those they are meant for.
Here are things that are expected in describing your products and services.
- The Description of your Product and Services
- The Current Status of your Product/Service
- The Product Development Research
- The Intellectual Property
- Sourcing and Fulfillment.
So, with all this listed out in this part, your business plan will eventually take a good shape to shine.
Step 6: The Marketing and Sales Plan
With all other steps above properly made available on your business plan, the next step is to list your marketing and sales plan.
Here, you need to explain how you will market and sell your products and services to the right audience.
Also, you explain how you will target the right audience, create customers, and get them to be interested in your products and business.
However, you can start your marketing strategy and sales plans with the following points.
- Positioning your Products and Services
- Promoting your Products and Services
- The Sales Force and Team
- The Selling Strategy.
This is your best marketing and selling strategy points required for your business plan. Make this known and always revisit to make adjustments when necessary.
Step 7: Your Financial Plan and Projections
This section is one of the steps needed to know as a business owner looking for How to write a business plan.
This usually comes at the ending part of a business plan but still serves as an essential part of your plan.
You need to detail your financial plan and projections, then make available some financial statements if applicable to your plan.
Below are some of the financial statements to be included in this section of your business plan.
- Income Statements
- Cash flow Statements
- Balance Sheets
- Accounts receivable Statements (if applicable)
- Accounts payable Statements (if applicable)
- Documentation of Debt Obligations (if applicable).
The above can go for your financial data; hence, if no financial data, then you can include your financial projections here too.
Your financial projections can include these documents below.
- Statements of projected income
- Cash flow forecasts
- Balance statements
- Capital expenditure budgets.
This section typically requires your financial goals, in and out of your finances, towards your business.
You can also include charts and graphs to illustrate the current financial situations and the plans you have for it.
Step 8: Add an Appendix
This is the final step to note among all the steps involved in writing a business plan, and it should be at the very end of your business plan.
Adding an Appendix will help hold all other information you didn’t include anywhere in your business plan document.
Any additional information, details, points, explanations, charts, and footnotes necessary for your plan can be added in the appendix.
You can also add your contracts, documents, licenses, pictures, and even your resume to the appendix section of your plan.
The appendix should have a table of contents with a breakdown of all the sections in your business plan.
Then, add all other additional information needed to be added to your plan and corresponding to each section.
This will help readers to reach you or refer to the appendix if they need more any time any day.
So, this is all you need to know about Business Plans and the steps involved in How to Write a Business Plan.
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