How To Design A Proper Business Plan – Writing a business plan is often the first step in transforming your business from an idea to something tangible. As you write, your thoughts begin to strategize and a path forward begins to appear. But business plans aren’t just for beginners; Established companies can also benefit from reviewing and rewriting their own companies. In both cases, official documents can provide the necessary clarity to motivate employees, and investors or make future decisions.
Regardless of your industry or the size of your team, creating a business plan—a document filled with so many details and documents—can be intimidating. But don’t let that stop you; There are easy steps to get started. Check them out below!
How To Design A Proper Business Plan
1. A brief description of the company
The name of your company, the date of incorporation, the names of the possible shareholders, the registration number of your company, the address, etc. In the future, you will add a little more detail to this section and include important events in the development of your company.
2. Description of the services provided
You should also include a description of how you stand out from your competitors (your unique selling point – USP). For example, your logo design can increase brand awareness by 40% or your sales copy can increase sales by 25%.
3. A simple market Analysis
Who are your customers? Who are your competitors? How big is the market you serve? How will the market evolve in the coming years? You should do a simple SWOT analysis outlining your market opportunities and threats and your company’s strengths and weaknesses – nothing too complicated, just enough detail to make sure you understand the market you’re working in.
Market analysis is usually done using a simple SWOT analysis in which you assess the strengths, weaknesses, opportunities, and threats of your business and your competitors.
4. Implementation strategy
How do you sell your services? How to implement this plan? What milestones will you use to show the progress of your plan?
5. Personal Summary
It’s an out-of-the-box version of your resume – what’s your experience? Your main achievement? Overall relevant experience?
6. Financial plan
What are your sales forecasts? How is your cash flow? How much snow do you expect? Be pessimistic and realistic for this exercise; don’t expect to work a maximum of forty hours a week from the start, every week. There is no way to achieve this. It is better to underestimate and exaggerate your financial results than the other way around. Remember that you spend a lot of time doing unpaid work, from accounting to marketing to administration. And maybe you also want time for vacations?
7. Summary or executive summary
The summary is often referred to as the “explanatory summary” of the entire plan. This is useful when you start selling your services; It’s the foundation of your elevator pitch: If you were stuck in an elevator for five minutes with your ideal customer, what would you say?
Your annotated abstract should include:
What is your main service?
Who are your main customers?
Why should they choose you and your services over your competitors?
how to sell your services
Things To Note When Designing A Business Plan
1. Think about your purpose
A business plan has two main purposes: to provide practical guidance for starting and running a business and to convince lenders and investors that you are a good risk. Both plans include the same basic components, but your plan purpose will guide you through the issues you highlight. When creating a business plan to run your business, highlight your marketing planning and research and production methods to guide you. If you are using a plan to raise capital, highlight your financial forecasts.
2. Create an Outline
Before you start writing your plan, decide what content to include, how you will organize and present the information, and what data and supporting materials you will need. Design the following components of your plan: cover page, table of contents, executive summary, marketing section, financial projections, and supporting materials.
Divide your marketing department into the following areas: a market overview, including customer profiles and competitor analysis; Product description; Prices for placing strategy; brand strategy; distribution strategy; and communication strategies. When you have completed your plan, write a summary that appears at the beginning of the document.
This executive summary should provide an overview of your product or service, identify market needs, and provide a comprehensive financial projection without additional details. The rest of the plan includes details.
3. Focus on Marketing
Marketing is not limited to advertising, promotion, and public relations. Marketing includes the initial research and planning you do to justify starting your business. This includes demonstrating that your product or service is needed in the marketplace, that enough people want to buy it, and that you have a unique selling point that will propel your customers over the competition.
The assumptions of your pricing strategy must demonstrate that your prices will generate enough sales to generate a profit. Your distribution strategy should focus on showing that where you sell offers the best combination of sales volume and gross profit. Once you’ve identified this, discuss how to promote your product, including the branding you’ve created for your business.
4. Provide realistic financial information
Whether you write your plan for yourself or share it with a lender or investor, create three different financial scenarios: your best estimate of your actual costs and sales; not boring, but optimistic forecasts based on the volume of sales of your main competitors; and a conservative estimate that shows the lowest sales volume you can sustain for now.
Back up your numbers with detailed production and overhead breakdowns and adjusted annual budgets for each of the three sales scenarios. Highlight your startup costs, first-year operating costs, and expected return on investment and future earnings for investors.
Reasons Why You Need A Business Plan
1. To help you with critical decisions
Creating a business plan allows you to predetermine responses to some of your most critical business decisions.
Creating a solid business plan is an exciting feature: Before you get started, you need to sit down and think about the key components of your business, like your marketing strategy and the products you’ll sell. You answer many difficult questions before they arise. Thinking deeply about your core strategy can help you understand how these decisions affect your broader strategy.
2. To avoid big mistakes
Only about half of small businesses are still celebrating their fifth anniversary. While there are many reasons why small businesses fail, many of the most common are deliberately covered in a business plan. Any part of a business plan, whether it’s a cash flow projection or a product-market fit analysis, can help catch some of these potentially critical mistakes before they happen.
3. To set better targets and benchmarks
Without a business plan, goals are often arbitrary and without much meaning. Having a business plan can help make these criteria more informed and effective. They can also help you take ownership of your long-term vision and strategy, and gain insight into how your strategy has fit (or hasn’t) over time.
4. Objective communication and comparisons
Whether you’re leading a 100-man team or two teams, you can’t always make all the decisions. Think of the business plan as a substitute teacher ready to answer questions while you’re gone. Tell your employees that when in doubt, they can always refer to the business plan to understand the next steps if they don’t get a straight answer from you.
5. Guide service providers
Small businesses often employ contractors, freelancers, and other professionals to help with tasks like accounting, marketing, legal support, and consultants. Once you have a business plan, you can easily share the relevant sections with the people who trust you to support the organization and get everyone on the same page.
6. To reduce risk
Entrepreneurship is a risky business, but that risk becomes more manageable when compared to a well-crafted business plan. Forecasting revenue and expenses, planning for logistics and operations, and understanding the market and competitive environment can help reduce the risk factors that result from an inherently uncertain livelihood. Having a business plan allows you to narrow down opportunities, make better decisions, and enjoy the clearest vision of the future of your business.
Conclusion
Write your business plan based on your core constituency, not what works best for you. This saves you valuable time and energy and increases your chances of winning investors and customers.
Frequently Asked Question(s)
Can I write my business plan myself?
If you’re a good writer you can probably write a business plan yourself, at least with some assistance. Software and samples are available to help prepare business plans.
What makes a good business plan?
Good plans are usually highly detailed and include information on all aspects of the business, including the industry, marketing, finance, personnel and various operating procedures. They are specific, communicate to all company employees and require commitment from everyone.
How many pages should a business plan be?
Ten to fifteen pages are sufficient for small, internal reports. Corporate business plans can be hundreds of pages long. Startup and expansion plans used for potential investors, vendors or other business partners can be 20 to 40 pages.
What is bad business plan?
A business plan is labelled “bad” when it overpromised things to the team, the shareholders, and anyone who involved in the operation of the business.
What are the 3 C's of a business plan?
These three C’s include: (1) having a concept of what your business is all about; (2) identifying who your customer or client will be; and (3) figuring out how the cash flow in your business will actually work.
Reference(s)
- www.intereaction-design.org – How to Write Your First Business Plan
- business.chron.com – How to Design an Effective Business Plan
- waveapps.com – The importance of business plan
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