Do you need a business plan for your business, but you don’t know where to start? If you want to know the secrets to create a good business plan for your business, follow this scheme step by step. Before starting to see how to build a business plan, let’s deepen what this management document is for and why it is so vital for companies.
Definition and purpose of the business plan
A business plan is a corporate document divided into chapters that illustrate how an idea can materialize into a business project. The purposes of a business plan are 9:
- A business plan serves to put the business idea on paper
- It serves to have a synthetic picture of the actual feasibility of the business idea
- It serves to plan
- It serves to organize
- It serves to outline promotional and economically sustainable strategies
- It serves as a guideline for the management team
- It serves the entrepreneur to clearly convey his vision, mission, and the company’s core business.
- It is used to evaluate the progress of the whole business project
- It illustrates how, where, and to what extent to find economic and human resources for the functioning of each process
A business plan is necessary for all nascent and well-established businesses.
The usefulness of making a business plan is often underestimated. But a business plan helps to think and find new ways, avoid mistakes, allocate resources well, and find new investors.
How to make a business plan?
To draw up a business plan, you must start by having a schematic vision, a model that has points to follow that can offer the possibility of easy reading and separation of the various project areas.
Fix these 11 points well that will be a vision of the scheme to write the plan for your business:
- An index must be created
- Create an executive summary
- Write a description of the company
- Write the offer to customers
- A market analysis
- Think of strategies to convey messages and promote yourself
- An operational plan
- Plan the growth of the company
- The company organization, the subdivision of processes, the allocation, and sizing of resources
- An economical financial plan
- Various attachments
Creating a customized scheme or model facilitates the achievement of objectives and the pursuit of the company’s goals. It helps to increase productivity and turnover.
How to write a business plan?
Before analyzing one by one the points, it is necessary to draw up a business plan. This corporate document must be clear, understandable, and comprehensive.
Let’s see how to write a business plan, analyzing the 10 sections that make up the document.
The business plan index
A self-respecting business plan obviously starts from the index in which all the other items that make up the plan are listed. The index offers the possibility to anyone, even the personnel resources who take over the project, to quickly learn the whole business idea.
Further, structuring a business plan with an index facilitates the circulation of information at all levels of the organization.
The Business Plan must describe a business project. Therefore the items included in the document must concern objectives, strategies, sales, marketing, financial forecasts, and strategic plans. A business plan that helps clarify your business idea is one in which the following items are entered:
- Executive summary
- The company description
- The market
- The competition
- It marketing
- Human resources
- Risk and hedging analysis
- The financial area
- Plan B
Before starting to read, keep in mind that, in my opinion, you have to write the business plan keeping in mind the current situation and the future one. In each document item, therefore, you will have to enter information to verify the current state and predict the path to achieve new or clearer objectives.
The executive summary is a short summary of the idea behind your business project. Since it is the point on which any project financiers will focus. The executive summary must be clear and must capture the interest of those who read it. You can also save the writing of this part at the end so that you have a well-defined idea of what to highlight.
The description of the company
In this part, you have to illustrate your business: what business it is, what it offers, what the structure is, and what advantages it gives compared to competitors. Also, in this section, add a description of the goals you want to achieve and for how long. Finally, describe who your team is made up of.
In practice, what to write in detail in the business plan under the item dedicated to the company?
I have included a series of elements that showed me the company’s past, its size, the reason why the problems I encountered, and much more.
I would suggest writing a series of news items such as:
- Historical context
- Goals and guidelines
- Reason why
- Current situation
By the historical context of the company, I mean the year it was founded, who was part of it, what roles did it cover, what were the objectives, such as the critical issues you encountered along the way, the choices, the available capital, the historical context of the market.
In the business objectives item, I suggest you write the growth objectives but also the commercial purpose of the company, which also includes the reason why. For example, to give the possibility to the consumer Y to have the advantage Z, in the situation X thanks to the product N.
Under business organization, you should write how your business is currently organized to pursue objectives.
Who’s the Boss, who makes the decisions? And who takes care of the commercial development marketing? In short, in this case, you have to write exactly the current organizational chart of the company. Helping you analyze business processes that start from the input, they go through the various internal processes up to the output.
In this case, making the business plan can also help you determine the processes and whom to delegate specific roles and tasks.
- Corporate disorganization
- How to improve time management
- How to organize employees
While writing your business plan, under the item current situation, I suggest you use what was written previously to write a summary of the current state of the context and the objectives of the organization. In addition to this, I recommend that you also write down the results achieved in the last year. For this, you can use important business growth indicators that show the solidity, reliability, solvency, and income status of your company.
Describe what you offer
In this part, you have to talk about the product or service you offer. Points out:
- The peculiarities of your product or service, also attaching product analysis graphic images
- It’s possible uses
- Because it is different from other products or services that the competition offers
- Possible future developments, the life cycle of the product.
So what to write in the business plan item dedicated to products? This business plan item is divided into 3 parts:
- Market performance
- Product protection
In the entry of the market performance business plan, I would write the catalog of products offered. What product or service does the company market? What is the origin? Are they created or bought from suppliers? What need do they solve? Is the product unique? Are they line extensions? Do they only respond to one market segment? How is the service provided?
Are the products ready?
Regarding the protection of products, in my opinion, you must write if they comply with current regulations if there are patents if the legal certifications are correct.
Identify your customers
In the business plan section of products and services dedicated to customers, I suggest you write who your customers are and who your product is aimed at.
The purchase decision-making process is wide. A product could be useful, for example, to those who approach a product category and who are experts in the category. These considerations and news must necessarily be written in a business plan.
Do a market analysis.
In this section of the business plan, you must report a detailed market analysis:
- How is the market targeted?
- How the demand evolves?
- The rules governing the market.
- Who your competitors are and how they are positioned
Create buyer personas: what is the target of your customers (what are the demographic, geographical, psychographic, and behavioral characteristics)
Here, you have to talk about the strategy you will implement to reach and increase new customers and retain them, imposing yourself in the market world. Specify your product or service price, and explain how you want to promote it and through which channels. You can also report a forecast of sales and turnover for the time considered in your business plan.
The operational plan
Here it is good to specify in detail:
- How do you produce the product, with what resources and processes
- How are you going to offer post-purchase assistance to your customers? Never underestimate this essential point to building customer loyalty.
The structure of the management team
In this part of the business plan, you describe the structure of your management team (executive profiles, titles, qualifications, professional experience, and role within your company). It also plans the hiring and management of human resources (how many and which professionals you will need their skills and their duties).
Business plan: Location
This is one of the items that is most misunderstood by those who want to write a business plan. In my opinion, here you can write notes on the address of the company, of the offices, and of the warehouse. As for the previous business plan chapters, enter a list of entities to comment on this item.
Write if to carry out your project, you need new offices and a larger warehouse. Besides, you need new internal processes, a hiring plan, the acquisition of new software, and management to streamline workloads. In this case, you need to write as much news as possible and consider the expansion of spaces, the increase in points of sale, and at a glance how much it could cost you. All obviously in relation to the goals you have set yourself to achieve.
With regard to procurement, you must write whether your company has available or must acquire tools and means of production. And also explain whether your company has enough technologies to cope with achieving the objectives. You have to write if you will do it directly, or maybe you will entrust to external partners, or you will rent.
What is the company’s know-how? How are notions and knowledge stored and documented? Are they part of a small circle of people, or does the information proactively circulate in the company?
Do you have the right staff to achieve your goals? Or do you need a hiring plan to manage growth properly? Write objective considerations about the difficulties in achieving the goals you are setting yourself.
In my opinion, you must also note possible risks and coverage for such negative events in your business plan.
Where could the risks come from? Internally or externally? Do you have insurance coverage economic to cope with the onset of negative events?
An internal risk could be due to limited staff. An employee who asks you for sudden holidays could create problems of both discontent and productivity. Maybe it is the one who holds key roles or who has specific skills that others do not have.
It is vital to overcome internal risks for the purpose of the survival and the serenity of the company. Further, you must also need to foresee the external risks as much as possible.
External risks could be legal, economic, or a pandemic. Analyze the context of your market and understand if problems may arise due to political, territorial, or other situations.
The financial plan
It’s time to do the math. At this point in your business plan, you will need to include the following documents:
Initial and capital expenses: Explain how much it costs to start the business and how you will get the necessary funds
- a monthly profit/loss projection
- a 3-year profit/loss projection
- a one-year cash flow projection
- a three-year cash flow projection
- a balance of the first 3 years
- a break-even calculation
Corporate finances are perhaps the most crucial part of the whole plan.
- Retrospective framework
- Income statement
Under the item retrospective framework, you have to write what has happened to the company in recent years from a financial perspective. What turnover did you get? At what rate of growth? What profits have they produced? Is there a correlation between liquidity management and turnover? When you have made financial decisions, have you made them by observing the turnover or the actual economic capacity? Does your business have a good credit rating?
In this case, write down both the current situation and the financial condition. That should serve you to achieve the objectives and maintain the company’s growth, at least from Micro to Small.
Write your income statement into the business plan right here as follows:
- Net turnover
- Expenses for goods
- Gross profit
- Operating costs
- Net income
Are your accounts okay? Did you take too many dividends? Haven’t you made any investments? In short, be as objective as possible.
The same thing you will have to do with your financial statements.
Next, write in your business plan how you plan to finance the expansion, growth, and persecution of new and more ambitious goals. Do you rely on what is the turnover that can be generated by your probable and future business action? Or how do prudent entrepreneurs foresee hedges? And who offers these covers to you? The banks? Subsidized finance? A mortgage on the house? A sponsorship? The sale of shares?
Regarding the financing chapter, you must also add considerations regarding the situation regarding taxes.
First of all, write your company form. Do you have a partnership or capital company? And evaluate by noting if it is appropriate to change it for this reorganization. Write what taxes you have paid, and write what taxes you could pay in a hypothetical increase in turnover in the corporate restructuring that you are planning to draw up your business plan.
In the final part of the business plan, you will have to attach all those documents necessary for the completeness of the plan:
- Field studies
- List of equipment or tools you need to buy or already own
- Copies of the lease
- Market research
- Detailed calculations and projections
Can’t make a business plan yourself?
If you need to create a business plan, we at Maven Biz Plan can help you productively. Our mission is to train and support online entrepreneurs. This is because an entrepreneur who buys a classic business consultancy must adapt to the cold and detached settings. A classic business consultant can offer simply by taking data, locking himself in his study, and presenting a plan. Our business Plan Consultant helps the entrepreneur with the business dynamics in the difficulties that arise every day. We help you in improving the reasoning that is at the basis of the company’s real growth.