[Step By Step Guideline]How to Write A Business Plan?
fore starting any business, a well-prepared business plan is essential. Success in business depends on the business plan. So, how to write a business plan step by step? Today I am going to suggest step by step guideline for business plan.
Before going to the main topic let me tell you a story. Maliha and Zaber, two university students from a non-business background, are planning to start a business on their own.
Since they are not from business backgrounds, they don’t have any clue where to start, what their business model will be, how they are going to make money, and how to make a business plan, and how they can make their business sustainable.
Fortunately, there is a cliche that you may be familiar with that you don’t need to be an MBA to become a successful businessman. What you need is a healthy business plan. The odds are there that you may be hearing the term business plan for the first time; in fact, Maliha and Zaber didn’t have the idea about a business plan.
We just care about those people who want to start and don’t have any clue from where to begin or don’t know what the initial stage should look like. Today, I am going to describe, how to write a business plan step by step?
Types Of A Business Plan
If you ask me how many kinds of business plans are there, then I would have to say that there’s plenty of them. Some of the business plans are designed only to attract the investors, some of the business plans are intended only to motivate the team members, but chances are there that you may be thinking of giving a startup, everything here is about the startup ecosystem.
So, today I am going to describe a business plan that is needed by a startup entrepreneur at the initial stage, which is called a one-page business plan. You may be wondering how many pages should a business plan be.
Who Should Write A Business Plan
If you are thinking of giving a startup or you are the CEO of a giant company, you should be the one to write a Business plan. Whenever you are writing a business plan, make sure you are doing it in the right way and let me describe it with an example, why a business plan’s accuracy is essential.
Imagine yourself as a driver of the car, and you have to go to a destination; if you don’t know the road to the goal, then there are chances that you may fail to go to the destination entirely. A business plan is just like the map that I have mentioned above; it will help you to drive to your desired goal.
When To Write A Business Plan
There is no specific answer to this question, but while writing a business plan, one should keep in mind that the business plan is the business’s blueprint. So I suggest every entrepreneur write a business plan just after they think that they are pretty serious about their idea.
Make sure your idea has a business plan—one thing more to add that wa business plan is not an unchangeable thing. If you are thinking of a business idea and you are not sure whether or not your idea is good enough, you can write a business plan.
There is a vast difference between your concept that is in your brain and the concept that is given a written form. A business idea also tells you what changes your business needs and what updates have to be made in the business.
Why Is The Business Plan Necessary?
You will hardly find a businessman without a business plan. The question should be whether or not the business plan is written or not. Let’s discuss why you strongly need a business plan.
Analyzing The Strengths And Weaknesses
SWOT analysis is necessary for every business plan you are going to work on. A business plan, when presented in a written form, you can quickly identify the core weaknesses and core strengths in the paper.
A business plan also presents you with the opportunity of identifying the threats and opportunities of the business.
Finding a business without an error is just like living in a dream or living the life of a fairy tale. Whenever you are trying to do something new, you are bound to make mistakes.
Famous Nobel Laureate Albert Einstein once said:
“The person who has never made any mistake has never tried something new.”
When you are writing a business plan, you are getting the opportunity of identifying the weaknesses and mistakes. Once the errors are identified, you are ready to minimize them, which is why you should have a written, organized business plan.
For Fund Raising Purposes
Fundraising is one of the essential aspects of a startup journey. When you have a written business plan, you are good to go to the investors. Investors will see the business plan, they will get the idea about your business plan.
If the business plan is well-organized, chances are there very high of getting investment. So, make sure you have a well-organized and clear business plan.
Helps in Strategical Planning and Decision Making
Decision making and strategic planning are the few significant components of a business. If you are unable to make correct decisions at the right time, your company can hardly have a promising future.
Once all the plans are written in a paper, you will get a clear cut idea about what to do next. Having a written business plan allows you to analyze all the threats and opportunities, and this helps you to take in decisions.
Fewer Risks in Business
As I have already mentioned in the previous section, taking risks in the business is something that you can never avoid, but with the help of a written and well-organized business plan, you are good to go.
A well-organized business plan offers you with few risk-taking situations. Moreover, a Business plan helps you to see the opportunities and threats in brief, which I have already mentioned in the previous section; this will help you to take a few risks in the business.
I could go on about a written business plan’s significance, but I would not like to lengthen this reading with only about the importance of a business plan.
8 Steps To A Solid Business Plan
There are different components of a business plan. Executive summary, objectives, products and services, market segmentation, sales and marketing, competitive analysis, operations, management team, and financial analysis are the core part of a business plan that you may need while writing a business plan.
If you are going to write a business plan, whether to get investment or to motivate the employees of the business or for long-term planning of the company, you have to make sure these components are there in your business plan.
Now let me describe the components of the business plan in brief and the steps to writing a business plan.
You may be wondering how to start a business plan, and here you will get the answer. If you ask me, what is the most important part of a business plan? I will definitely reply that the executive summary is the most prominent. part of a business plan
Although I am giving this part’s description at very first while writing a business plan, you have to make sure you are writing this step at the very last stage; in fact, most of the entrepreneurs write this at the very last moment.
Now you may have started to wonder what there should be in an executive summary. The word summary here has already said that this should be the summarised version of your business. The executive summary must be very concise and clear in meaning. Nobody Should get puzzled while reading an executive summary.
What’s your business is all about, what are the core funding opportunities, where you would get product’s supplies, where you will sell your products, how will you get traction of your products or services, who your potential clients or customers could be, all of these questions should be answered in the executive summary. In short executive summary should contain everything about your business but in short form.
An executive summary is the first thing that your investors are going to read, so it’s better to put why your business is the one they should put their trust in, and for this, you have to give the signs of early success here too.
It should also be as transparent as possible since this one is the first thing of a business plan. Another thing you should keep in mind that you have to give an essence of how much money you require in the business. You can read different samples so that you will get an idea of what is the first step in creating a summary.
Overview, Objectives And Mission
In this part, you have to describe the goals and objectives of your mission. Imagine yourself as the CEO of a new tech company that focuses on solving an environmental problem.
How you are going to solve the ecological crisis, how you are going to operate, how your business goal is, and what’s your core team’s belief should be mentioned here.
Objectives, overview, and business mission must be there because it will motivate you and your team, so you have to have a specific overview and objective mission. What amount of customers you would like to attain, how much sales are you looking for in the first year of the business, and how satisfied you are going to make the customers, and what impact your business is going to drive into the world definitely has to be mentioned in the business plan.
Reaching the right customers or right clients also could be an objective for a company. Also, don’t forget to add the legal structure of your company.
Products and Services
You may have a product or service-based company; whatever solution you are going to offer or planning to offer, you have to describe all those things here. Imagine yourself as a car company owner.
How many features you are going to add to your car, what kinds of products you are going to offer, how you are going to design your product line all of these things have to be described in the products and services section.
You have to keep in mind that your products and services section is going to be very specific and well organized. You also have to add the competitor’s products and your product’s comparison here because adding a comparison will give you an ultimate benefit. As a businessman, you have to know your competitors very well, and in some cases, you have to know their next moves also.
What kind of pricing you are going to offer, how you are planning to make offerings, how you are going to design your offer, how you are planning to acquire the market are also have to be added in this section. In short, everything about your products and services has to be added in this section.
Sales and Marketing
I believe that you can already understand from the headline of this section, you can already know that we will discuss everything about marketing and sales. You may be wondering what you might include here. You have to include TAM, SAM, and SOM.
Total available market means how much need is available to you. For example, you are thinking of the Obesity problem. Now you are going to solve the obesity problem. While solving the Obesity problem, every single person who is suffering from the obesity problem can be included in the total available market size.
This is the market that you would like to target while dominating the market. You can follow what I call the STP rule. Now you may be thinking about what is STP rule. S stands for segmenting, T stands for targeting, and p stands for positioning.
Now SAM refers to the segmented market that you would like to acquire or where you would like to give your offerings.
Imagine yourself again as an entrepreneur who is trying to solve the problem of obesity. Now you may have customers from different backgrounds. You can classify the customers on various characteristics.
After segmenting the customers on different aspects now, you have to identify which of them could be your potential customers or potential clients. This identifying of customers would be your serviceable available market.
Serviceable obtainable market refers to the market size that you can easily acquire with the help of your promotional and marketing strategies and so on. Consider yourself again as an entrepreneur trying to solve the obesity problem.
Now how many customers you believe can be captured by you and your company is the size that defines the serviceable obtainable market.
As I have mentioned earlier, in marketing and sales operation, you have to write down these three core components.
Imagine yourself again as the person who is trying to solve the obesity problem. Now you may be wondering who are your potential competitors. Now in this section, you have to discuss in detail why you should be the one to solve the problem and who are your potential clients.
You have to both identify them and analyze all the advantages and disadvantages. Moreover, you have to state how you can outrun your competitors, how you are going to face the competitor’s strategy, and so on.
Competitors’ analysis is a very crucial thing while writing a business plan. Without a well competitive analysis, there is a risk of getting outplayed by your competitors.
In this section, you have to describe where you will get your supply, how you will distribute your products, where your company or factory should be situated, how you are going to solve the legal issues, and so on. In the operational plan, you also have to describe the hierarchy of the company.
Where your company’s shop should be situated, where your distributors should be located, everything like this has to be added under this section.
How you are going to use your transportation system has to be added in this section. How you will distribute, what kind of vehicle you are going to introduce to your company has to be specified in brief.
As an entrepreneur, you have to look for legal issues too. Is there any patent required or, do you need to fight any legal lawsuits to get your products into the market? It should be stated in this section. You don’t need to be a law expert to write down the legal part.
Providers and Suppliers
From where you would get the supplies of the products and where your distribution should be, how you are going to collect products, all these things have to be stated in this segment.
In this section, you have to write about your team combination in brief. Who is going to look at the accounts, who will do the marketing, who will see the tech part has to be decided in this section. In this part, you also have to rule out how your team is going to solve all the managerial issues.
How much profit you are going to make, how much money you will require to start the business, how much money you should take from investors, and so on, financial analysis has to be done here. You also have to add terms like Break even, cash flow, and profit loss.
Now you may have written a business plan step by step and start wondering if your business plan is good or bad. Now there are few characteristics of a business plan that you would like to know, I believe. So Let’s find out how you can know your business plan is a good one.
Keep It Short
Try to keep the business plan as short as possible; if you can make the business plan as short as people would love to read. If you keep your business plan short, people will not get bored, and investors do not like a lengthy business plan.
Keep It Simple
Just because I have said that short business plans are good, this doesn’t mean that you have to keep it ambiguous. Try to keep it as simple as possible so that everyone can easily understand what your business is all about.
Keep It Logical
You have to add realistic goals to your business plan. You can not add fancy goals to your business goals. You have to write plans logically. For example, You can not define an impractical time for a break-even point.
So be logical as much as possible. One thing you have to keep in mind that being analytical and being pessimistic are two different things. So, in short, you have to use your full brain while writing a business plan.
Communicating and Convincing
A business plan has to be both communicating and convincing. If your business plan is clear and compelling, you don’t need to be steve jobs in order to sell your idea. There are several ways to make an effective business plan. Try to give as much credible data as possible but don’t jumble the business plan with lots of data.
Purpose and Vision
Your business plan should have a clear purpose and vision. What you are trying to do, what you are trying to focus on, what problems you are trying to solve, what kind of KPI you are targeting must be clearly stated in your business plan.
A good business plan should clearly state where the investment opportunities are. For that, you have to show your break-even points, cash flow; all these financial analyses with the help of the economic calculation. For that, you don’t need to be a finance specialist or a finance expert; a superficial knowledge of basic math will do the trick for you.
As I have already stated above, your business plan is something that defines the fate of your company. Your company’s future depends on how good you are going to make an offering, and you can only make an acceptable offering if you have a good business plan.
Making a business plan will indeed look like a challenging task but trust me, once you have done this work, you will get a significant amount of satisfaction.
Take your time and try to follow all the steps to write a business plan. You may consider this writing as a business plan step by step guideline. So, don’t panic about how to make a business plan you can easily do; just follow the steps.
If you are a new entrepreneur, then the first stages of creating a new product business plan will be a difficult task, but things get easier gradually.
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