All businesses start from scratch, but the most successful ones are founded on solid, well-rounded business plans. While a business plan does not guarantee success, having one makes all the difference in the dynamic entrepreneurial environment.
But how do you come up with a robust plan for your business?
Business planning 101: Steps to creating a comprehensive business plan
A strong business plan is well-thought-out and provides a roadmap that you may follow to grow your business. It should provide data and information to help you secure funding, make educated decisions and secure the resources you need to take your business from idea to profit.
Understandably, creating a detailed business plan can be overwhelming. Here’s a quick guide to help make things much easier:
- Write an executive summary.
This offers a brief overview of your business, including its mission, projected profits and expenses.
- Describe your business.
In this step, you’ll need to outline the essential details about your business, including its legal structure and details that make it unique.
- Do market analysis.
Identify your target audience and take a close look at your competitors and trends in the market.
- Explain your offers.
Are you selling a product or a service? In any case, detail your offer and highlight its benefits to your target market and how much it will cost.
- Make a marketing and sales plan.
This will involve the processes by which you market and sell your offers, detailing specific revenue goals.
- Build your team.
Understand who you need to fulfil your business goals, and create a well-structured team around these essential roles.
- Create financial projections.
Take a second look at the plan you’ve developed so far and come up with realistic financial predictions covering your profits, expenditures and general cash flow.
- Understand your risks and address them.
Review your business model and offers. Identify the possible risks and create contingency plans to manage them.
- Gather the necessary documents.
Produce documents supporting your business and ensuring its legal compliance. You may include them in the appendix of your business plan.
- Finalise your plan.
Double-check every detail and make sure there are no errors.
Additional tips for writing your business plan
A well-written business plan does not only ensure that you have a clear path to follow when building your business. It is also useful when you’re looking to present your entrepreneurial ideas to investors in an effort to secure funding.
- Have clear goals and objectives. Build your plan with a clear understanding of what you wish to accomplish. Your goals and objectives should be S. M. A. R. T. – specific, measurable, achievable, relevant and time-bound.
- Know what you’re going up against. Understand your target market and know how you can cater to it. Additionally, learn about your competition and identify what sets your business apart.
- Prove that your idea works. It pays to run thorough research to come up with proof to back your claims and explain why your idea works. It will also help if you test your business ideas before you finalise your plan.
- Be realistic with your estimates. Be conservative with your estimates and resource consumption. Avoid overestimating profit projections and underestimating expenses to avoid coming up short.
- Be flexible and adaptive. Prepare to adjust your plan as you encounter new learnings and challenges, making sure you stick to your original objectives as closely as possible.
- Be confident with your plan. Stick to your guns and guts; do not be intimidated when presenting your plan, understanding that you know your business idea better than anyone else.
- Keep it brief. No one wants to look at a lengthy business plan and you don’t want to overburden yourself either.