Before you take a leap of faith into your entrepreneurial journey. You want to make sure you have the perfect business plan to avoid the bumps in the road.
Writing a business plan doesn’t need to be complicated, however, it does need to be professional, comprehensive, and detailed. The first step to writing your business plan is to prepare it professionally. Writing a business plan is a must, particularly, if you want to apply for a small business loan.
1. How Do You Begin Writing a Business Plan?
Make it look as professional and organized as possible. A business plan will:
Summarize your business.
Provide lenders with a financial blueprint for your business.
Demonstrate that you have a concrete plan for your money.
Give a flow chart of all aspects of your business from marketing to accounting.
Defines your target market and your marketing plan.
Document your goals and your plans to attain them.
Here is a basic list of what your business plan will need to contain:
2. Executive Summary
This is a brief overview of your entire business plan, typically ranging from half a page to two pages in length. It should capture the reader's attention and provide a summary of what the business is, what it does, and why it's expected to succeed. This includes mentioning the business name, location, products or services, the mission statement, and the business's competitive advantage. Even though it appears first, it is often written last after the rest of the business plan is completed.
3. Business Description
This section provides more detailed information about your business and how it fits into the industry. It covers the nature of the business, the marketplace needs that the business will satisfy, the customer base, and any potential competitors. You should also include your business model and your vision for the business's future. Who are the key team members and what roles will they play? You should provide information on the owners, management team, employees, and any external resources or consultants. Outline the skills and experiences each brings to the business.
4. Legal Considerations
This section should detail what products or services your business offers. It should describe the benefits of these products or services, how they meet the needs of your customers, and how they differ from those offered by competitors. If you're planning to launch new products or services in the future, discuss those plans here. Here you will answer the following questions:
What legal structure will you have for your business? Sole proprietorship, partnership, corporation, or Limited Liability Company?
What type of business licenses do you need to legally operate your business?
What are your insurance needs?
How will you keep a record of your expenses for tax reporting?
Financial statements, such as income statements, budgets, balance sheets, and cash flow.
5. Employee/Management Plan
Here you outline the legal structure of your business. Is it a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation? Discuss any licenses or permits you have or need to obtain, and any legal issues or liabilities the business could face. When many people start in business, they’re a one-person operation. That’s perfectly acceptable. If you have employees, what are their job responsibilities, write down exactly what your job responsibilities will be.
6. Products/Services
In this section, you will plan your initial products or service offerings. Detail what products or services your business offers. It should describe the benefits of these products or services, how they meet the needs of your customers, and how they differ from those offered by competitors. For example, if you are opening a business as a bookkeeper, then how will you charge? How will you receive payment? Will you offer multiple services like bookkeeping, payroll services, and collections? If you're planning to launch new products or services in the future, discuss those plans here.
7. Operations
This section outlines how the business will function on a day-to-day basis. How is your business going to function? Do you need a computer? A website? What will your hours of operation be? And what are your financial goals? What will be your expenses? List each aspect of your business operations, goals, and needs, and then go into as much detail as possible. This includes the location of the business, equipment needed, supply chains, credit policies, and other logistical details. This also includes manufacturing processes, inventory management, order fulfillment, and customer service.
8. Sales and Marketing
This part of the business plan describes how you intend to market and sell your product or service. Start this section by detailing your target market. Next, describe how you plan on reaching this person and selling your products or services. Who is your competition, who is your target market, and how are you going to market your business? You should discuss your sales strategy, pricing plan, promotions, advertising, and public relations. It's also important to talk about how you'll reach your target market and how you plan to retain customers.
9. Budget
The budget, often accompanied by financial projections, provides an estimate of the business's income and expenses. This section should include income statements, balance sheets, and cash flow statements. It's important to be realistic and to provide a clear picture of the business's financial outlook. How much money are you starting with, what do you need to buy, and is a detailed budget essential for success? Your potential lender will want to know what you’re using the money for.
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