How to Write a Business Plan
How to Write a Business Plan
Writing a business plan is extremely imperative for a new business start-up. A business plan is like a frame work that will help you pen down the how’s, when, where’s and other several questions you might otherwise not even think of. An effective and well written business plan is like accomplishing fifty percent of your business goal already. An elaborate business plan will help you make
- Financial Projections
- Identify opportunities revenue generation
- Do a market study
- Perform a competitor study
- Plan for lean period or peak season for business
- Plan a course of action for the business with goals and milestones.
Starting to Write a Business Plan
Here are a few questions you need to ask yourself before you start drafting a business plan for your business:
- Why do you need a business plan?
- Who will be the target audience for the Business Plan?
- What will your business plan comprise of?
- Do you need a simple or elaborate business plan?
The following are some of the major types of business plan:
- A one page business plan will comprise of your business summary. It is succinct and to the point. A one page plan serves as an easy tool to showcase your business to outsiders and it also helps with the first meeting with a prospective investor. You can always work on a detailed plan later. Since investors do not have a lot of time to read big dockets, a one page plan serves the purpose of offering them in short the crust of your business idea.
- The internal business plan focuses on strategies, metrics, and forecasts. Internal business plan serves as a guide to check on the growth of start-up and existing businesses. An internal business plan helps owners make decisions that will help with strategic decisions and set metrics to achieve goals.
- External business plan is written and designed to provide information for outsiders. In an external plan details of execution of fund for different requirements is showcased. External business plan usually helps with providing an understanding to the investor about how his money will be utilised in the new business.
Major Parts of a Business Plan
The following are major elements of any well drafted business plan. So divide the business plan into these areas and work on them individually:
- Table of Content
- Executive Summary
- Business Overview
- Information about the Member of the Management Team
- Industry Overview
- Product or Service Information
- Marketing plan
- Company Milestone, if any achieved
- Details of Company Financial Plan
Also refer to the article on business plan template for more information about a business plan structure.
You write a cover letter comprising in short the details of your employment history similarly an executive summary should comprise in short the idea of your business and how you intend to execute it in a succinct fashion. Your executive summary should comprise of:
- A brief overview- company legal structure, business model
- Target market
- Key financial highlights
- The management team details
One page business plan can also serve as your executive summary.
Services or Products Offered by the Business
You will have to be specific about the service you will offer or product sales you will be involved in. This section has to elaborate. For e.g. if you are planning on starting a food stall then you will have to provide details such as:
- Type of food stall you plan on setting up
- Does it have delivery or dine in too
- Is it fast food, snacks stall etc.
- The gadgets, instruments and utensils you will be using for preparation and selling of food
- Type of packaging you will use for serving and packing
- Will you offer home delivery? If yes- what’s will be the area coverage?
- Where will the stall be set up? At a residential premise, a mall, supermarket etc.
Target Customers and Market Overview
You have to showcase the target buyers or users of your product in your business plan along with an overview of the market. This is one the key segments in your business plan to elaborately mention who your target buyers or users will be. Once you decipher this you will then be able to work on marketing strategies, promotions and sales of your product or services next.
Marketing and Sales
You will have to mention in detail the strategies you will use to promote the business
- How will you price your product or service
- How will you present your product or service to the market
- What type of promotional activities will you make use of to advertise your business.
- What types of sales process will you use
Goals and Accomplishments
Goals and accomplishments are possible only if you set the metrics and ensure they are met by the target date decided upon.
- Mention past milestones achieved by the business.
- Provide future milestones or product roadmap for the business.
Financial Requirements and Projections
Financial planning is an important segment of writing a business plan. One of the traits of a successful business is keeping a track of how much money you are bringing in and how much is being spent.
- Forecast of sales
- Prepare an Income and Expenditure Statement
- Prepare a Balance Sheet
- Prepare aa Cash Flow Statement
- Backup the above financial statements with detailed explanation of assumptions used, if any.
In addition, add an appendix to your business plan if need be and cover any other point you would want to showcase to the bank or an investor.