Business plans have long been a critical document for new businesses. Are they still relevant?
From professional points of view, each business needs to have a written business plan. Whether to provide direction or attract investors, a business plan is vital to the success of your organization. If so, what best practices and data can help you create a winning Bplan that will help your business get the financing you need and ensure your business lasts?
How do you write a business plan?
Before looking for the best way to develop a business plan to help you crush it, and spend hours or numerous dollars on commissioning one, you should ask yourself if do you even need one?
Every entrepreneur and startup needs a plan. Before deciding exactly what it looks like and how to create it, there are some critical questions to answer and factors to understand.
What’s a Business Plan for? and When to create it?
SBA.gov recommends that a business plan include:
Executive summary — a snapshot of your business
Company description — describes what you do
Market analysis – research on your industry, market and competitors
Organization and management — your business and management structure
Service or product — the products or services you’re offering
Marketing and sales — how you’ll market your business and your sales strategy
Funding request — how much money you’ll need for next 3 to 5 years
Financial projections — supply information like balance sheets
Appendix — an optional section that includes résumés and permits
“Research and analyze your product, your market and your objective expertise,” William Pirraglia, a now-retired senior financial and management executive, has written. “Consider spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan.
“To write the perfect plan, you must know your company, your product, your competition and the market intimately.”
In other words, it’s your responsibility to know everything you can about your business and the industry that you’re entering. Read everything you can about your industry and talk to your audience.
2. Determine the purpose of your plan.
A business plan, as defined by Entrepreneur, is a “written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.” However, your business plan can serve several different purposes.
As Entrepreneur notes, it’s “also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road.” That’s important to keep in mind if you’re self-funding or bootstrapping your business. But, if you want to attract investors, your plan will have a different purpose and you’ll have to write a plan that targets them so it will have to be as clear and concise as possible. When you define your plan, make sure you have defined these goals personally as well.
Your company profile includes the history of your organization, what products or services you offer, your target market and audience, your resources, how you’re going to solve a problem and what makes your business unique. When I crafted my company profile, I put this on our About page.
Company profiles are often found on the company’s official website and are used to attract possible customers and talent. However, your profile can be used to describe your company in your business plan. It’s not only an essential component of your business plan; it’s also one of the first written parts of the plan.
Having your profile in place makes this step a whole lot easier to compose.
4. Document all aspects of your business.
Investors want to make sure that your business is going to make them money. Because of this expectation, investors want to know everything about your business. To help with this process, document everything from your expenses, cash flow and industry projections. Also, don’t forget seemingly minor details like your location strategy and licensing agreements.
5. Have a strategic marketing plan in place.
A great business plan will always include a strategic and aggressive marketing plan. This typically includes achieving marketing objectives such as:
Introducing new products
Extending or regaining market for existing products
Entering new territories for the company
Boosting sales in a particular product, market or price range. Where will this business come from? Be specific.
Cross-selling (or bundling) one product with another
Entering into long-term contracts with desirable clients
Raising prices without cutting into sales figures
Refining a product
Having a content marketing strategy
Enhancing manufacturing/product delivery
“Each marketing objective should have several goals (subsets of objectives) and tactics for achieving those goals,” states Entrepreneur.
“In the objectives section of your marketing plan, you focus on the ‘what’ and the ‘why’ of the marketing tasks for the year ahead. In the implementation section, you focus on the practical, sweat-and-calluses areas of who, where, when and how. This is life in the marketing trenches.”
Of course, achieving marketing objectives will have costs. “Your marketing plan needs to have a section in which you allocate budgets for each activity planned,” Entrepreneur says. It would be beneficial for you to create separate budgets for for internal hours (staff time) and external costs (out-of-pocket expenses).
A well written business plan still plays a key role in launching a profitable and sustainable venture today. New trends and data show us that the best time to complete a solid plan can now come later than it used to be. It is much more important to start, test and secure financing first.
When it comes to creating business plans, there are now more optimized templates and formats that are being adjusted to meet today’s needs to accommodate new businesses faster and more agile. Just don’t let this part of the process stop you.
No matter how you do it and to whom you will show your plan, make sure someone with experience reviews it for you.