Whether you are just starting up or already have an established business, it is very important to have a comprehensive business plan in place. A good business plan not only defines your objectives and how to achieve them, but also outlines the route your company or business intends to take to make the much-needed profits. The following smart tips are meant to guide you on how to come up with a perfect business plan that you can always rely on:
1. Have a Good Structure
Before you even start writing your business plan, you should take some time to identify its intended purpose. This will surely help you choose the right structure for your plan. For instance, you are likely to focus on different information depending on whether your business plan is intended to raise finances from external sources or just as internal management document. In both cases, your business plan should comprise of some or all of the following: a cover page, table of contents, executive summary, business overview, business goals, requirements overview, staffing, operations overview, sales and marketing overview, financial overview, and supporting documents.
In case you are writing a business plan as part of a loan application process, your cover letter should include the following: the type of loan you want, the amount of loan, the borrowing period, why you need the money, and a reference to the business plan. You will also have to include your bank accounts, liabilities, assets, and other business interests in the business plan.
Formatting, underlining, spacing, and illustrations all play a major role in improving your business plan’s outline. Summaries are also of great importance, and the main points must appear as frequently as in an oral presentation.
2. Writing the Plan
Once you have settled on a particular structure, write down important points and ideas under each of the headings you would like to include in your business plan. Arrange these points and ideas in terms of priority so that you can have a logical flow. In addition, look out for any possible weaknesses or gaps and fill them in with the necessary research.
Make sure you keep your business plan as simple and short as possible. For easy understanding, use simple language, short sentences, bullet points, and tables. Also, edit and proofread your work to remove unnecessary mistakes. Your facts and information should support each.
3. The Executive Summary
This is the most important part of a business plan because it is the first part people will go through and provides an overview of the entire business plan. Due to the fact that it contains reference to the entire business plan, it should be the last section to write in the business plan writing process.
It must not be longer than 500 words and must be less than 3 pages. It should include your company information, growth highlights, your products and services, financial information, and future plans. It is a good idea to conclude your executive summary with a short mission statement that explains why your business is poised to succeed.
4. Business Overview
In your business overview, be sure to include details about when the business was started, how it was started, the experiences it has gone through, objectives, your ownership structure, the present outlook, and the future possibilities. You should also explain clearly what your business does and how it will be making profits. When mentioning your products/services, make sure you include benefits and competitive advantages.
5. Marketing Strategy
Here, you will have to talk about your target market segments and how you intend to differentiate your products/services from your competitors. Discuss your product/service pricing promotion and pricing and include how all your promotional programmes will appear to your different target markets. Provide a detailed plan of your marketing tactics such as social media marketing (e.g. the use of Twitter, LinkedIn, or Twitter), trade shows, and networking, including the costs associated with each marketing tactic. Most importantly, explain your target market’s buying cycle and how your services/products will be sold (e.g. online, wholesalers, or stores).
6. Operations and Management Plan
Provide a profile of your business’ or company’s management team, your business facilities, your business location(s), your production plan, your human resources, and an overview of your day-to-day operations. It is also very important to provide 2 or 3 one-paragraph bios of your business partners and other key team members. This is meant to describe how your business or company functions on a continuing basis.
7. Financial Plan
While developing your business plan, provide a break-even analysis, profit statements, loss statements, pro-forma balance sheets, and monthly cash flow statements.
How much money are you putting or planning to put into the business? Note that if you are not ready to put much of your own money into the business, potential investors and business partners will also be wary about sinking their money in. Therefore, it is very important to provide revenues, estimated sales, and the type of returns investors can expect from your business.
Even though the appendix is optional, it is also very useful. It should include:
- Building permits
- Legal documents
- Product pictures
- Resumes of key managers
- Copies of leases
- List of business consultants
- Credit history
10. External Reviews
Before you finally print out and release your business plan, it is very advisable to let a few people go through your final draft. Paying for your business plan to be proofread and edited by professionals will definitely ensure that it is free of embarrassing and avoidable grammatical and spelling errors. Alternatively, you can ask some of your business acquaintances, accountants, mentors, or any of your trusted employees to read through your business plan and help you identify any possible mistakes or inconsistencies.