Writing a business plan might seem very tasking because it is an overview of your business. Having a good business plan helps you through each stage of starting up and managing your business. A good business plan can also help you get the fund you need for start up and partners for your business. It should be well structured and convincing enough for investors and business partners to want to work with you. Here’s a guide to help you through.
First and most importantly you have to Choose a business plan format. The most important thing about writing a business plan is that it suits your need. Business plans fall under two of these categories:
Traditional business plan which has a standard structure and has detailed sections. It takes a lot of work and requires a lot of pages.
Next is the Lean startup business plan also takes a standard structure. It centers on just summarizing the most important parts of the key elements of your plan. It doesn’t take too long to make and are most times only one page.
Under the traditional business plan there are different sections.
Briefly summarize what your company is about and what would make it successful. Add your mission statement, your product or services and basic information about your company’s leadership team, employees, and location. You should also include your financial intentions and growth plans if you plan to ask for financing.
Provide detailed information about your company. Be detailed about the problems your business intends to solve. List out the consumers, organization, or businesses your company plans to work for. Talk about the competitive advantages that your business has. Are there experts on your team? Do you have a definite location? Your company description is where you have to boast about your strengths.
Have a good understanding of what your industry looks like and your target market.
A market research would show what your competitors are doing, their strengths, what works for them and decide if you can do better.
Organization and Management
Marketing and sales
You should have a strategy that would fit your needs. In this section you’re supposed to write how you intend to get and retain customers and how you plan on making sales because you’d have to refer back to this section while making your financial projection. So be detailed with you marketing and sales strategies.
This section is for requesting for fund and stating you requirements. The aim is to explain how much funding you will need for an estimate number of years and what you will use it for. Give a detailed description of how you will use your funds. Specify if you need funds to buy equipment or materials, pay salaries or cover some bills until revenue increases. Remember to include a description of your future strategic financial plans, like paying off debt or selling your business.
Your goal is to convince your prospects that your business is stable and will be a financial success. If your business is established, add your income statements, balance sheets, and cash flow statements for the last three to five years. If you also have other collateral you could put against a loan. Give a prospective financial outlook of your business for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be more specific and use quarterly or even monthly projections. Clearly explain your projections, and place them with your funding requests. Use graphs and charts to explain this section.
In this section provide documents or other materials were specially requested. Such as resumes, product pictures, letters of reference, licenses, permits, or patents, legal documents, permits, and others.
Under the Lean Startup business plan we have:
State the prospect business partners you would like to work with to run your business especially similar strategic partners.
Make a list of ways your business will be of advantage competitively. With things like selling directly to consumers or making use of technology to tap into economy.
State the resources that would serve as a leverage for customer value. It can include staff, capital, or intellectual property.
Explain the unique value your product or services has to bring to the market over your competitors.
How will your customers interact with your product? Is it online or in person? Think about your customer service experience.
It is very important to know who exactly your target market is. Be very specific when classifying your target market.
Is your business focusing on reducing cost or maximizing value? Pick a strategy and outline the significant costs you will face pursuing it.
Source of Revenue
How will your business generate income? If you plan on having multiple streams of income, state it.