Starting a business might be frightening when you're beginning or reorganising your company, especially if you've never done it before and have no business plan. It can be even more difficult to persuade potential investors of the worth of what you foresee; this is where learning how to write a business plan step by step comes in handy.
If you want to learn how to create a business plan, you can take a few steps to make it as simple as possible. Write your strategy today by following this simple step-by-step tutorial!
Did you know?
While writing a business plan, you need to keep a few things in mind - to not overcomplicate and choose substance over form.
The 9 Steps to Writing a Successful Business Plan
The executive summary is a quick rundown of your company and its goals. It should be no more than two pages and utilised to catch the attention of prospective partners, investors, and vendors. It should emphasise why you will succeed.
The following items must be included in executive summaries:
- A mission statement is a line or two that explains your company's goal and what problems you can solve.
- The information which highlights your products and services stands out from the competition.
- Basic information about your company's leadership team members, including their titles and responsibilities, should be included.
- Information about the location of your team,
- Basic financial details (including present funding or what you're seeking funds for) and high-level development goals (if you're seeking financing)
This part will go into great detail about your firm, including the problems you want to tackle and the communities you wish to serve. Make a list of the audience groups, consumers, organisations, or corporations you want to be your clients.
You should also emphasise what differentiators or competitive advantages will help your company succeed. Simply said, this is the spot where you may promote your abilities.
The following should be included:
- Every one of your company's unique selling propositions (USPs) should be linked to your mission statement.
- An overview of every strategic advantage you have as a company and as the company owner.
- A distinct highlight for each of your team's experts
- If applicable, information on the company's patents or copyrights.
A company’s organisational objectives should be outlined in the objective statement. It should also contain a brief explanation of your company, including what you want to accomplish with it and how you plan to do it. It is normally written in the beginning because it informs everyone about your company's direction.
It's crucial to know what your company's aim is. When drafting a company purpose, don't be overly unclear. Make a list of what you want to do and however you wish to undertake it. An objective statement also must explain how your vision has influenced you personally and why it is vital to everybody else (customers).
Organisation and Management Structure
The organisation and management section will describe how your business will be operated and who will be in charge.
The following items should be included:
- Details on your company's legal structure, which might be an S or C corporation, a general or limited partnership, an LLC, or a sole proprietorship, should be included. Describe who the various owners would be.
- Include an organisational chart that shows your company's management and leadership structure.
- Include information on any executives and upper-level team members who are presently onboard and information about how they will contribute to the development of your fledgling company. It would be beneficial to include the CVs of important team members.
Service or Product Line
Your company will sell goods, services, or both, and it is where you'll go through the specifics of what you're selling.
The following information should be included in this section:
- A description of how your consumer will benefit from your product or service
- The product lifespan refers to how long a product may be sold after it is initially launched on the market.
- Patent filings and copyright protection are examples of intellectual property plans.
- Product testing or research that you've done for your product or service
Marketing and Sales
It describes your marketing plan and how you intend to implement it. Here you can discuss how you want to persuade clients to acquire your products or services and how you intend to build customer loyalty and repeat business. This section can also emphasise your company's capabilities and concentrate on what sets you different from the competitors.
If a company wants to connect with new consumers and produce revenue, it needs a sophisticated marketing plan. Your plans will be detailed in this section of your company strategy.
You'll need to include the following:
- Include exact strategies for attracting, gaining, and keeping consumers. It will contain the many channels you want to employ, both online and offline, and all stages of the digital sales funnel.
- A description of the sales process, including if online checkout will be offered, how to lead collecting will work, and any customer onboarding procedures (if any).
- Information on how much you want to spend on marketing initiatives and which channels you intend to use. Don't overlook this during the financial predictions section of the business plan; you can always alter it later, but you want to start with a firm foundation today.
Not many business plans ask for money, but if yours does, this is the section where you should explain what you're looking for in terms of finance and what it will cover.
Explain how much money you'll need in the next five years and why you'll need that.
This section should go through the following points:
- Whether you choose debt or equity as a form of funding
- The terms on which you're looking for a loan
- The loan's, line of credit, or investment's duration.
- A description of how you'll utilise the money and why you'll need them to start and grow your company.
- A plan for how you will pay off your debt burden.
Your financing requests should be accompanied by financial predictions right away. It will show you how much money you can anticipate making in the first year and the next five years. You must persuade the audience that your company will be financially secure in the long run, allowing them to return their investment.
Here's a list of things to include:
- For the previous five years, established enterprises should have financial records such as income statements, cash flow statements, profit and loss statements, and balance sheets (or whatever is available)
- Mention any collateral you might be able to use to get a loan.
- Include details such as profit margins on your product or service line, explaining how you expect to generate money.
Suppose there is something extra you'd like the users to understand or see; the appendix is where to do it. If you're already up and running, this may include client testimonials, photographs of items or product prototypes, or resumes of any important players.
If they aren't already stated in the business plan, your appendix should also include the following:
- Any patents or copyrights copies
- Testimonials or personal recommendations
- Product research that wasn't included in the business strategy earlier
- Any high-level members' resumes or CVs
- Additional information about the production or producing process
- You've gotten the relevant permissions or licenses.
- The cover letter for a business proposal
How to Make a Business Plan Cover Letter
The last step in writing a business plan is to make your cover letter. Your work isn't done until you've completed your business strategy. When submitting your business plan to lenders, investors, and possible joint venture partners, you'll also need to compose a cover letter to go with it. Even though it is different from the plan, the cover letter is still a vital submission aspect. It demands the same amount of care and attention.
Your cover letter will be tailored to the person or people you're sending the plan to, making a personal pitch to them. It should state that a business plan is attached and offer a brief description of the business. It is to ensure it seems engaging enough for them to want to read the entire project.
While following the above style is a wonderful place to start, there are a few simple things you can do to make your cover letter stand out.
Avoid employing complex, industry-specific terms that only specialists in your area would understand; use formal language while maintaining a conversational tone.
- Use abbreviations and slang sparingly.
- Keep it to two pages or less, ideally one page.
- To make your argument, use short sentences and avoid being overly wordy; conciseness is better.
- Instead of using the passive voice, use the active voice.
- Remember to concentrate on your company's most valuable and fascinating assets.
- Always proofread your work, looking through it at least twice and, if possible, contacting a friend or employing an editor to do it.
When you create a business plan by yourself or employ outside help, taking a moment to write a good, keep this in mind. A thorough business plan can steer your firm and encourage external team members to join, and it is worth the effort.
Connecting with financiers, partners, vendors, and investors requires business planning. They're quite useful for various reasons, including guiding your internal team on how to go forward throughout the early years of running a corporation. They can assist you in communicating why your company will succeed and why it is such a worthwhile option for everybody to engage.