Starting a business is hard enough of a leap of faith without the countless easy mistakes an average entrepreneur has to willfully dodge.
It’s no wonder only 1 in 5 startups survive their first year. The odds are stacked against you. That’s a fact, but most of all these obstacles and dangers are quite avoidable, given the proper amount of planning.
In this case, the kind of plan you require is referred to as a Business plan.
Your business plan is the foundation and bedrock of your business. When you are starting out your company, a well thought out business plan is a very essential piece that cannot be overlooked or half-assed.
To avoid corrupting the roots of the company, a good plan has to be prepared even before you start your business.
Writing a business plan may seem like a big hurdle, but it doesn’t have to be. Amazingly, business plans are not that complicated to prepare.
The fact that you understand your business like the back of your hand means that writing a business plan and leveraging your plan for growth won’t be nearly as challenging as you think.
It’s as simple as following this guide step by step and putting the pieces together to form your own business plan.
Formats of a business plan.
There are two main formats you can follow when writing a business plan. First is the conventional/standard business plan format and the other is the One Page business plan format.
For starters, you can try building out your business plan with the one-page format. As you get more serious with the business idea, you can commit time and resources into building the standard business plan.
Next, we’ll delve into the specifics of how to write a business plan, and share some tips on how to make sure your plan is well-rounded and serves the purpose for which it was made.
Sections of a standard business plan
This is the first section of your plan that you need to address. It’s the most crucial part of the plan that summarizes your whole plan and intent to your reader.
The goal here is to give the reader an overview of what your business entails and highlight your key points. A well-rounded executive summary should provide enough information to be a standalone document, outlining the finer details of your business without being bulky.
First impressions matter a lot so you must aim to impress and excite in this section. A good executive summary should entice the reader to want to hear more of your plan.
Company description and overview
In this section, your objective is to portray a more detailed insight into your business. You need to outline as best as you can the history (if any) of your company and its current structure as it stands.
General information like where your company is located, how long it has been running, your competitive advantages, and previous achievements need to be included.
This is the place to show your strengths so try not to be vague at all. Paint an impressive picture, nothing less!
Market or industry analysis
An analysis of your industry works to reveal to the reader that you know your niche or target market well.
To pull this off properly, you need to stay abreast of the trends and patterns in your industry. Ask yourself questions about your competition. Research thoroughly because you want to be sure of any details you speculate in your plan – cite reliable sources if you can.
Generally speaking, in this section you need to help the readers understand to some degree the available market opportunities and assure them that you’ve done your homework.
Organization and management
In this section of the plan you should share with your reader a list or chart of your team members and their roles in the general scheme of the business.
This is essential because your plan and its execution is only any good if you have the right kind of people that can make it work out. This section should be your way of giving your readers a view of company’s inner workings and organizational structure.
Inform the reader about the legal structure of the business. Try to vividly outline the pipeline as it runs from the management team, to the board members, to other members of the team – even roles that are yet to be filled in the organization.
Service or product line
This is where you share with the reader what kind of services or products your business will be providing.
Go into more detail about what makes your services special, talk more about the general life cycle of your product. Detail as best you can all the steps you have taken to getting your product to where it is. How you’ve gone about protecting your idea legally.
Marketing and sales
This section is trained towards the acquisition and maintenance of customer satisfaction, whatever the cost.
Your approach to marketing should never be set in stone, rather it should evolve to as the need arises.
In this section of your business plan you have to describe to the reader how you aim to gain and retain customers. Be as thorough and detailed as you can be outlining who your target customers are and how you plan to reach them and sell them on your product and services.
This section needs to describe the important day to day activities that your company perform to keep satisfying customers.
Done well, this section would appropriately imply to the reader that you have a working route to achieve your goals, hence reassuring them more.
This section usually also details the poignant milestones that your company expects to accomplish in the foreseeable futures.
This section brings out a financial perspective of your business concept by detailing the financial ramifications of the plan that you’ve already outlined. This will help you understand just how much funding you require to achieve your goal.
You can’t afford to be vague in this section as more details always tends to paint a broader and more analytical picture of your financial standings and tendencies. You need to give the reader a probable financial outlook for your business for the next five years.
Use detailed graphs and charts if you can. Tell a convincing story and make sure you tell the whole story without leaving room for misinterpretation. The more accurate your financial plans, the more you can project how much funding you’ll need to achieve your goals.
This section exists so you can provide the readers and potential investors with supporting documents and specially requested materials.
Popular examples of things you may attach include; permits, licenses, resumes, credit histories, patents, legal documents and contracts.
Additional business plan tips
I. Keep it brief
A good business plan should be between 20-35 pages.
It’s important that you ensure that every bit of information you are writing down has earned its place on the page. This will significantly improve the value of your business plan.
II. Allocate appropriate time and resources to your plan.
You need to be realistic about planning out your business plan writing project. Yes, it is a project because it requires a significant amount of time and effort to complete.
Do away with tools and templates out there that promise to help you complete your business plan in 1 day! If you must build a business plan at all, then you should as well build it properly.
III. Spruce up your plan with designs and other visual aids.
A business plan is as much of a business document as it is a creative document.
Reason is because readers make snap judgments. According to a study conducted, it takes only 1/10th of a second to form a first impression about a person. Business plans are no different.
If you want to make your reader spend more time on your business plan, spruce it up with visual designs.
IV. Edit and Proofread
Once again, prospective investors and lenders could form their opinion about your business idea just by checking out your spelling, punctuations, and grammatical syntaxes.
So, pay attention to reading and re-reading your plan to spot out technical mistakes.
V. Consult an expert, if possible.
As you can see, the process of writing an effective business plan requires a number of skill sets.
Are you busy and can’t commit to spending a week or two in properly writing your business plan?
Then consider consulting with a business planning consultant to help you bring your business idea to life.
With that said, there are precautionary steps that you should take before hiring a business plan writer.
A lot of business plans are little more than fantasies. Rather than make sure that a plan actually works, a lot of aspiring entrepreneurs just see business plans as a means to an end – a bargaining chip filled with hopeful projections that would not stand in the reality of the cold market.
Even though business plans are meant to attract investors, you should not forget that the goal of the plan is to convince not just investors but yourself that your idea is viable in the long run.
Because let’s face it, ultimately it is all about you and your future.
HIRE OUR TEAM
Our team at S&W have a combined business consulting experience of over 30 years. We have developed business plans for clients in over 50 industries across Africa, North America, Europe, Asia Pacific, and MENA.