How to write a business plan step by step
The business plan is an important subject in the world of business and the discussions around it will always be relevant and cannot be overemphasized. Exactly what an architectural or building plan is to a building project, that is what a business plan is to a business. Have you ever tried to imagine what will happen to anyone who attempts to start a building project without following any plan? Yes, that immediately gives you a picture of losses, trial and errors, catastrophe, collapse, injuries to workmen on-site – name it! These and many more are what can be expected when a building project is attempted without following any plan.
In the same way, running a business without a business plan (which is what many people are doing) is not so good an idea – it is actually dangerous!
What is a business plan?
A business plan, like our analogy of the building plan referred to in the opening paragraph, is a document that is created by a business owner(s) which contains the goals which the business owner(s) is/are trying to achieve with the business and the step-by-step detailed plan on how to achieve those goals. It is usually a blueprint for how the business will be run, documenting the breakdown of activities and tasks that must be done and accomplished to achieve the objectives of the business. It not only documents tasks and activities but also the strategies that must be adopted in all the aspects of business operations all through the life span of the business. The guide and the strategies that a business plan provides for an entrepreneur are usually along operations, marketing, management lines, among others.
Why is a business plan important?
Why is it important to learn how to write a business plan step by step? When you are planning to start a business, you need direction, focus, and set goals so you can follow a track that leads to success. You need to know what your business entails and how you will go about meeting your goals and objectives. You also need funding to grow your business. Any serious investor would want to know the feasibility of your business before putting their money in it, and the only documents that provide such information at a glance is the business plan. This is a key reason why it is important to know how to write a business plan step by step. A business plan also helps you to have a clear picture of what your product and services is (or should be) all about, “where do you want to take your business and how will you get there?” are the pertinent but difficult questions which a business plan equips you to provide answers to. Furthermore, a business plan creates a very clear roadmap to your business’ future such that trials, guessworks, and errors are eliminated.
How to write a business plan step by step
Business plans can vary in contents and volume depending on the industry and the goal that the writer wants to focus on. However, there are general guidelines from which anyone writing a business plan can draw examples and inspirations. Here, I will provide a step-by-step guide that simplifies the entire process of writing a business plan for anyone who cares to practice it.
- Research the industry you want to write about
A business plan is a data-driven document. The usefulness and the result you can get from a business plan are directly proportional to the depth of research and the accuracy of information or data that it is based on. One mistake I see people make often is writing business plans without any research or rich supporting data. When you write a business plan that is full of assumptions, that plan is dead on arrival – it is bound to fail, and if anyone is foolish enough to invest in such a business, we already know what happens to buildings that were built following no plans, right? Even when you think you know a lot about that industry or business line, research is still one thing you cannot skip in this regard
- Adopt an outline that you want to follow and develop the plan
Like I did say, business plans differ in terms of content and complexity depending on your goal and your industry. Determining the points, or the outline, you want to write on is very crucial and will be determined by a number of factors. Below is an outline that can be adopted for most businesses and you will do very well adopting it if you are a beginner.
1.0 Executive summary
This is an important aspect and section in your business plan document that you need to pay attention to, especially if you plan to raise funds or attract investors or partners with your business plan. This part of the business plan is what call, “The Attention Grabber” and if you can’t use your executive summary to grab the attention of the required audience, it has failed in its purpose, and most likely that failure will affect the overall goal of your business plan negatively. It’s that critical.
The executive summary of a business plan is the opening part of the business plan that gives a summarized overview of the entire contents of the business plan. The executive summary is the first section of the business plan although it must be written last.
This is the section where you introduce your company and the business it is involved with. The following are some of the key items to focus on in the background section:
- Introduction of the company
- Vision and mission statements
- Legal status
- Location and facilities,
- Production plan
- Business strategy
- Key success factors
Your market simply talks about the people you are planning to sell your products and/or services to. Who and where are they?
- Nature and size
- Market segments
- Key competitors
- Service delivery
- Demand/supply analysis
- Competitive edge
4.0 Marketing Plan
Having identified your market, the next question to answer will be how to reach them, how to win them, and how to keep them as customers who are literarily happy to keep paying you for the goods and services you provide for them? A plan to help you do this is what we refer to as the marketing plan. In a marketing plan, the issues you will be dealing with include but not limited to the following:
- Distribution strategy
- Sales strategies
- Market positioning
5.0 Operational Plan
This section of your business plan is where you tell your audience the exact activities that will be going on in your company daily and how they run. What are the daily activities that your company engages with in the process of creating your products and services, and delivering value to your customers? You need to be detailed at this point, and also describe who is responsible for each of these activities.
6.0 Management Plan
This is another section of your business plan that is very important. This is basically where you describe the kind of people in your organization – or the kind of people it will need – in order to achieve its overall goals. Describe the team you are working with and the competencies you and your team have that convince anyone that you can get the job done, run the company profitably, and make it successful.
7.0 Financial Plan
This is that aspect of your business plan which lending institutions (if you require a loan), investors and prospective partners will scrutinize very seriously and so, you can be careless when writing this part. Some important contents expected here include
- Cashflow analysis
- Profit and loss analysis
- Break-even analysis
This where the addendums go. Here is where you include any other information and details which you consider important but you could not have included in the main document. The following are good examples.
- Photocopy of certificate of incorporation
If you need a service of a Professional Business plan writer, then Dayo Adetiloye Business Hub is the place to go Call or WhatsApp us now on 081 0563 6015, 080 7635 9735, 08113205312 or send an email to firstname.lastname@example.org and we will solve any of your business plan problems.
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