Your business plan is the life wire of your business. It gives a directional head to your business ideas.
You could have a fantastic business idea but, if you don’t have a strategic plan documented to implement it in reality, the whole concept will be a mirage.
According to Investopedia, 20% of new businesses fold up within the first two years of opening, 45% within the first five years, 65% within the first ten years while 25% make it to fifteen years.
Reasons for this premature failure are poor market survey, deficiency in the business plan, little financing, and insecure location among others.
These reasons are all associated with a lack or inadequate business plan.
In this post, you will learn a step-by-step process to create your business plan yourself.
What is a Business Plan?
A business plan is a written guide that outlines the process of achieving a particular business goal. This document describes the future of your business.
It also serves as a management tool that allows you to analyze results, make strategic decisions, and describe how your business will operate and grow.
An effective business plan must address details such as business structure, product and services, the business vision, and how you intend to penetrate the market. It could also include your key team members, their strength, and the financial projections.
Just by answering these questions, you’ll already get the pointer on why you need a business plan for your new or existing business.
Why Do You Need A Business Plan?
Your business needs a plan so that you and your team would have a clear roadmap to achieve your business goals. A good business plan will also explain your financial projection to an institution looking to invest in you.
Having a business plan will help your business attract growth partners, boost your confidence when dealing with investors, and helps you live by a simple business budget to avoid extravagance.
The bi-dimensional purposes of a business plan provide makes it a structure that guides a business both internally in his dealings with stakeholders and externally with customers.
Here’s a quick 3 steps guide to create a business plan without necessarily paying a business plan writer to work on it.
3 Simple Steps to Create Your Business Plan
Developing a business plan is creating a document that details an actionable process to execute your business idea. For a basic plan, your document must sit on these guidelines.
Step 1. Conceive a business idea
Getting inspired is the core of business ideas.
As a promising entrepreneur, you should pay keen interest to the societal problems and try to profer a lasting solution to them. Remember a successful business stands to solve problems.
For instance; your neighbors always express their dissatisfaction with the types of cakes usually available for their wedding and birthday ceremonies, you can bring up a highly compelling concept.
Step 2. Embark On A Thorough Research
Once you have a business idea that is goal-oriented, step it up with research. This will provide insights to flesh up your business plan.
After collecting the needed data, now flesh out your business plan following the listed headings.
i. Executive Summary
This provides a quick preview of your business. Most times, experts advise that this section should be the last to pen when drafting your business plan.
This is important because you’d have run through every part of the plan before writing the summary.
And when writing this part, the questions highlighted below should prompt your process.
- What is your business mission and vision?
- What are your products or services i.e. your value proposition?
- What is your company’s story?
- What are your plans for growth?
Here’s an example of the executive summary of a company.
ii. Company overview
A company overview is like an elevator pitch. It is like a 30-second memorable description of what your company does and the operations. The motive here is to craft a simple copy that convinces anyone to invest in your business.
This is an avenue to provide brief answers to these questions:
- What will your business offer?
- What problems does it come to solve?
- Who is your targeted customer?
- How do you stand out among the competitors?
Next is your product and services,
iii. Products and services
This stage details your business model and expansion roadmap. Here, you’ll answer these questions:
- What will the company sell?
- How will the business fix down money for those products or services?
- What is your pricing model? Be specific.
- How does your pricing compare to that of your competitors?
iv. Market opportunity
Investors need to see the viability of your business. This is why your market survey must be extensive to answer questions like;
- What is the size of your target market?
- Who is your ideal customer?
- What’s your potential for revenue?
- Who is your competition?
- How will you set yourself apart?
v. Market plan
Under the market plan, you’ll provide information on how to reach your clients.
While doing this, you need to include your market penetration plan. This could be the use of marketing tools like a website, social media and email marketing strategy.
- How will you sell your products or services?
- Will you sell directly to consumers or businesses?
- Will your products be sold in unit or wholesale?
- If you choose a third-party reseller, what kinds of retail outlets will you target?
- What kind of advertising strategy will you focus on?
vi. Operational plan
Here, you present the details as comprehensive as possible on how you intend to run your business. By so doing, you’ll answer these questions:
- How will products be manufactured or services be packaged?
- Where will your offices or retail locations be?
- What quality of employees do you need?
- How do you plan to expand the business over time?
Investors don’t overlook finances. They always have a keen interest in the financial section of your business plan. So ensure that you conduct deep research, and make the plan actionable.
Answer the questions below for this purpose:
- What investments do you have already?
- How much more funding do you need?
- What are your current account balances?
- What is your sales forecast?
Once you’ve provided extensive and realistic answers to the key questions about your intended business, you’ve done the important part of your business plan. What you need is to just polish it.
Remember, it is an advisable time to go back to your executive summary. It might need a review.
Step 3. Add The Finishing Touches To Your Business Plan
After writing your business plan, take a few days away from it.
This will ensure that you come back with a fresher view of it.
Read it over again for necessary corrections. Typos and grammatical errors present you as unprofessional.
Also, remove complicated sentences and redundant words from your written plan. You are not impressing anyone. Go straight and hit the nail on the important points.
You can as well give it to a friend who can take another reading over it.
Make sure that you keep it simple and straightforward.
The success of your proposed business is tied to your business plan.
If it’s well-drafted, fulfilling your set up goal will be a breeze.
But if otherwise, your business ideas will continue to suffer without seeing the light of the day.
In entrepreneurship, the prospects given by your business plan aren’t a small measure.
Once it’s a detailed business plan, it will empower you to secure investment, loans, and leases for your company.
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