How to write a business plan

 

A good idea is not enough to start your own business and make it successful. You need to create a website, register a company, and develop a business plan to help you define business goals and attract investors. This article will tell you how to write a ready-made business plan - from company description and market analysis to management and financial forecasts.

What is a business plan? 

A business plan is an outline containing detailed instructions for establishing and running a business. In addition, it is used to attract investors and obtain a loan from banks at the stage of capital formation. For simplicity, we have broken down an example business plan into 8 points:

Business plan structure

1. Executive Summary
2. Company Description
3. Products and service
4. Market research
5. Marketing and Operations Plan
6. The structure of the company
7. Financial projections
8. Applications

Executive Summary 

Imagine that you only have a minute to talk about your business to a potential investor. You will not describe in detail the business plan sections but will only mention the key points:

• The company's goal
• The product being sold
• A couple of the most striking figures from the market analysis

Such a short squeeze - and there is a summary for management. This is a kind of teaser that will help investors get a quick impression of the company even before opening a business plan. Even though this item comes first, we advise you to write a summary for management after drawing up a business plan. This will make it easier for you to collect all the information and reduce it to a few bright paragraphs.

Description of the company

What a good company description should include:

• Business name and founder names
• The history of the creation of the business - including the year and place of creation, the company's purpose and mission.
• Brief description of the main goods and services.
• The current stage of the company
• Achievements you are proud of
• Plans for the future with achievable time frames (for example, plans for the quarter, year or five years).

Goods and services

 Describe in detail the company's products and services in this business plan section. This includes titles, short descriptions, and purpose—that is, what customer need will fill. Again, use simple language far from professional vocabulary so that even people far from your industry understand what is being said. If necessary, add charts, product images, and other visual components. Finally, write down the price line, including the cost of materials and production, as well as the amount of profit for each unit of goods.

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Market Research 

Before you write a business plan, conduct detailed market research, and outline the key points in the document. The research should include:

• Industry information. What is the state of the industry now? What changes can await it in the future? Who are the key players in the industry, and what do they offer?
• Analysis of competitors. List the main competitors and tell how you will compete with them. Each business in the game should conduct a SWOT analysis and document its strengths, weaknesses, threats, and opportunities.
• The barrier to market entry. Explain the challenges a new business faces in gaining market share in this industry. These can be high initial costs, specific legal requirements, or complex and expensive equipment.
• The target audience. Draw up a portrait of a potential client, indicating such details as approximate age, social status and place of residence. Collect this information before writing a business plan, for example, by analyzing competitors' target audiences or conducting surveys on social networks.
• Rate your business. Based on the previous points, conclude the viability of your business. What are your benefits? Is there a demand for your products and services? How do you plan to reach your target audience?

Marketing and operational plan

This section describes exactly how you will put your business idea into practice. This includes branding, an advertising and promotion plan with a ready-made marketing budget, creating a professional website and choosing the right social networks. In addition, include important details such as hiring labor, logistics, purchasing goods, and renting premises—anything that will allow you to create, sell, and deliver goods.

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Company structure

Break down the company into divisions and departments, and identify key employees: from equity holders and CEOs to directors and managers. It is best to make a business plan that includes supporting infographics, such as a pyramid, from which it is clear who is on the board of directors and who performs what functions. 

Financial projections

You must show investors (and yourself) that you can build a financially stable company. Therefore, in this section, answer the following questions:

• What is the size of the initial investment?
• How much investment is expected from investors?
• How long does it take for the company to start earning its first profit?
• How much do you plan to earn in a year, three-five years?

Applications 

At this point, add additional information to help readers better understand your business. For example, graphs, analytics or survey results. Also, include your licenses, trademarks, patents, contracts, insurance, and other documentation in this business plan section.