How To Write A Business Plan
Posted September 5, 2019, by Elesha
A great business plan could be the key to turning your entrepreneurial dreams into real business success!
A business plan can help you secure finance, get clear on your vision, guide your business journey and evaluate opportunities. Let’s take a look at what a business plan is, the traditional vs lean option and how to write one.
What Is A Business Plan?
A business plan is a document that details the opportunity for your product or service, an outline of your company, market analysis, key financial details and action plan.
It outlines the strategy on how you plan to get from where your business is today to where you want your business to be in three to five years from now – greater profitability and increased assets, etc.
A business plan plays a crucial role in convincing banks, investors and other supporters to fund you to grow your business and sets out the financial goals, projections and cover funding requirements.
Aside from securing funding, your plan is an important tool you’ll regularly reference to –
- Prioritise business activities and come up with new ideas
- Help identify and maximise opportunities
A solid business plan is your tool to navigate the ups and downs of launching and growing a business. It will keep you on track and if it’s good enough, convince investors to fund your plans.
Do I Need A Business Plan?
Every business needs a plan but the question is – which one is the best fit for you? A traditional plan or a leaner, one or two-page plan?
Traditional vs lean business plan
Traditional business plans are more detailed usually take longer and require more research to complete.
They project three to five years into the future and outline all the details that can contribute to the success of the business.
On the other hand, a lean plan is usually only a page or two which requires less time to put together and may only project 12 months ahead. It might be short, but it still needs to communicate the future of the business in a clear, articulate manner.
How To Write A Business Plan
Ready to get started on your business plan? Let’s dive into the elements you’ll need to include and 3 tips for writing a great business plan.
Tip #1 – Watch the length (yes, even for traditional plans)
You don’t want to go over the top with content because a) you actually want people to read it (100 pages? No-one has time for that) and b) it’s intended to be a tool you’ll refer to often.
Because you’ll use the plan to run and grow your business, it needs to be short enough to refine and revise as needed. A monster plan is likely to be shoved into a desk drawer and never referenced again.
Tip #2 – Don’t sweat the details
Writing a business plan might feel overwhelming but it doesn’t need to be. Don’t get caught up in making it perfect – you might even want to start with a lean one-page plan and build a more detailed business plan later on.
Tip #3 – Know your audience
Who will be reading your business plan – a bank or potential investors? You’ll need to tailor it according to the audience – like you would tailor a job application for a specific role.
Do your research and understand how your investors work, their past investment decisions and be clear on the synergy with your business opportunity.
What You’ll Need To Include In Your Business Plan
An overview of your business and plan, the executive summary comes first – although most business owners write it after they’ve completed the plan. Keep it to one or two pages.
Outline the opportunity
Here’s where you answer the question – how does the product or service you are selling solve a need in the market? Outline your target market and competition.
How will you execute your plan?
This section covers how you plan to grow the business and should include a marketing and sales plan, KPIs, strategy and milestones.
How will your management team and other staff be structured? Who will you need to hire? If your business is already up and running, you can include a brief overview of your current team, history and legal structure.
A very important part of your business plan! You’ll need to include a sales forecast, expenses budget, cash flow statement, balance sheet, and a profit and loss statement.
This is the appendix where you can include any additional information relevant to your plans, like product images, rental agreements, licenses, permits, patents and trademark documentation and marketing materials.
A Lean Business Plan
Opting for the lean approach? Writing a one-page plan is also a useful exercise because it forces you to get right to the point of what you’re doing and think critically about your business.
Follow the same structure for the traditional business plan covered above but simply write 2 to 3 sentences about each point.
Starting your business is an exciting (and scary!) time. If you’ve decided to take the leap, make sure to check out The Ultimate Guide To Starting Your Own Business.