A business plan is quite important for the business. That is the reason business students have to write a business plan during their studies. There are different types of the business plan as per the nature of the business. That is why the students don’t know how to best business plan. But don’t worry here in this blog we will go to cover how to write a business plan. But before we explore the steps of how to write up a business plan, let’s have a look at what business plan is.
What is a business plan?
A business plan is playing a crucial role in the success of any organization. It is quite powerful; thus, it can make or break the business. If your business plan is clear, detailed, and strong enough, it can provide a clear roadmap for the business’s future. You can get the financial as well as the competence of your business with the business plan. It is a kind of blueprint that holds the plan for your business over three to five years.
It contains your goals and ideas and the plan of how you can meet your business desired goals within a specific time. The business plan should contain the business’s financial planning that either is going to apply for the loans or look for the investors to invest in the business. In both cases, it should be mentioned that the business will meet its goals asap to repay its loan and return to the investors.
What are the three main purposes of a business plan?
Before we come to know how to write the business plan, we should know the purpose of the business plan and why we need to have a business plan. Here are the three crucial reasons for a business plan:-
Business Focus Establishment
The major purpose of the business plan is to establish a plan for the business. The plan includes the goals and the milestones for the business and the steps that showcase how the business will reach each milestone and, finally, the goals. It contains both the short terms as well as the long term goals. It is a clear roadmap for the business to meet its goals and pursue growth.
The business plan helps the business get funding for the business, i.e., private investors, banks, or other lenders. Because before investing in a business, everyone wants to know what the project is for the revenue and the expenses that the business has made. And what about the return on their investments.
A perfect business plan also helps the business to attract valuable and highly skilled executives for their business. The business plan has mentioned what should be the executives’ requirements for the business. In this way, you can determine whether the person can be the executive of your business or not.
Tips for How to Write A Business Plan:-
Here are some tips that you should follow before starting your business plan.
The first and the major tips about the business plan are that they don’t try to over-optimize it. If you are applying for the loan in the bank and showing the over-optimized financial forecast to the loan offers, you will have less chance to get approval on loan. Because when some businesses showcase more than 30% of business financial forecasts than their competitors, then it appears unrealistic for the bank to believe and clear the loan amount.
Keep it concise
The business plan should contain enough information because it is a business plan, not a business story. Therefore it should contain 15 to 25 pages to showcase all the crucial information of the business plan. The more clear and concise the business plan is, the more it is effective for the investors. You should focus on the key elements of the business and always try to avoid other unnecessary information and jargon of the industries. For all the other information, you have the appendix section where you can mention the summary of the information rather than describe it with details.
Proofread is the technique that makes sure about the Spelling, punctuation, and grammatical errors on the page of the business plan. If you don’t do the proofreading of the business plan, then the mistakes in the plan can make the investors change their minds, so they do not invest in the business. You can take the help of business plan writing services for proofreading. They usually have the expert writers who can provide the best-proofread services on the business plan.
How to write business plan step by step
Executive summary is the first page of every business plan. It contains the mission statements that have the main focus of the business. It also focuses on the description of your products and services that is offered by your business. Apart from that, it also includes the ownership structure and the plan summary.
As the name suggests, it contains the crucial details of your business. Some of the information is the registered name, physical address, name of the key management personnel in the business, company history, business nature, and other details of the products and services.
Objective statement or business goals
The next thing is the objective statement that is related to business and business goals. Therefore it should mention the company goals and business strategy and how effective the business plan is used to achieve the goals. It is used to accomplish both the near terms as well the long term of the business.
Business and management structure
The business and management structure is the legal structure of the business. It contains the sole proprietorship, partnership, and corporation of the business, its key employees, managers, and other owners. In this business and management structure, we also mentioned the percentage of the ownership that each owner is holding.
Products and services
In this section, we mention all the details of the products and services that the business is going to offer to its customers or consumers. Here are some points that should be kept in mind to mention the products and services:-
- A benefit explanation of how the product or service works
- The clear pricing model of the product or service
- The category of customers that the business is going to serve
- The strategy for sales and distribution
- Key features of the product or services that are making them better than the competitors.
- Solid plan to fill orders.
- The trademark of the business(if any)
- Any patents registered by the business for its products or services.
Marketing and sales plan
It is one of the crucial elements of the business plan that affects the business’s profit and loss. The marketing and sales plan contains an explanation of the business marketing strategy and how it will market and sell the products and services to its consumers. It also contains the strategy of how the business is going to influence the customers to buy its products.
And how it develops the customer’s loyalty so that the company can do repeat business with its customers. In this section, you should also mention the strengths of the business and how it can compete with its competitors with the most effective marketing and sales strategy.
Business financial analysis
Business financial analysis is playing a crucial role in startups. On the other hand, in an already established business, this analysis is used to make the investment from the investors or take the business loan. For this, the business should include it in their profit and loss statements and the balance sheet where you list all the business assets and debts. Apart from that, it should also include cash flow statements that showcase the cash that goes and comes into the company.
Financial projection should be included in the business plan. It plays a crucial role when the business is looking for financing or investors. It showcases that the business will generate enough revenue to repay its loan and provide enough return on investments to its investors. For this, you need to provide the monthly and quarterly sales, expenses, and revenue of the business over the last few years.
It helps the business to acquire new loans. While creating the business’s financial projections, you have to be accurate enough to analyze the past financial statements. Here in the financial projection, it would help if you showcased that the business is capable and strong enough to generate the cash flow to cover the business’s debts and loans. Apart from that, it would help if you also kept in mind the other risk factors of the business.
It is the last step of the business plan. It contains supporting information or any other additional information about the business. That information can not be categorized under any step. Some of the examples of that information are resumes of the key personnel of the business, it’s license, permits, equipment and land leases, receipts, band statement, contracts, credit history, and many more. The appendix length depends on the business nature. If the appendix is going to be super lengthy, you can add a table of content before starting your appendix.
- Why Business Plan Is Important For The Success Of The Business?
- Experts Tips On How To Write A Business Report Effectively
Now you have seen what the business plan and its purposes are. And also how to write business plans. It can be quite tricky for beginners to write a business plan. But if you follow all these tips on how to write a business plan, you may find it quite easy. Because it is just a blueprint of the business, and you have to showcase it as effectively as you can.
These tips are also useful for how to write a business plan for startups. So be ready to write your first-ever homework business report. If you still find it difficult to write the business report, then take help from our experts to get the best assignment on business.