What is a Business Plan?
According to Wikipedia, a business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.
The question on how to write a business plan is what most people find it difficult. In writing a business plan, there are some factors you must consider and that is what we shall discuss in this article. We shall also provide a free sample of what a business plan looks like.
How Important is a Business Plan for your Small Business
What every small business owners fail to understand is that there are risks involved in every business, whether it is a small scale business or a large scale business, writing your business plan becomes very essential here as it shows that you have carefully analyzed the risk, pros and cons of the business before engaging the business.
Writing a plan for your small business gives you the necessary focus you need, how to plan for the future of your business, and even taking your business to a wider level especially when seeking third party support to finance your business.
To put it in simpler terms, having a business plan serves as a guide for your business where goals, objectives, and details on how to achieve these goals are documented. It is a blueprint for success and downfall of any business organization.
Tools Needed In Writing a Business Plan
Just as a farmer needs a cutlass and hoe to farm, a business man needs his tools to write an effective business plan. There are five tools you will need and these tools are:
- A Book & Pen.
- A Computer with Microsoft Excel Spreadsheet.
- Electronic calculator.
- Different business plan templates.
- A business plan software.
How to Write a Good Business Plan
Below are steps on how to easily write a perfect business plan
Step 1: Research
This is the first step to carry out in successfully writing the perfect business plan, you must carry out your research to determine what your priorities are in the venture as a business owner. In this stage, you don’t take anything for granted as all indices that would promote or even mar your business in anyway should be considered.
Indices such as consumer habits towards the service provided or products, strength and weaknesses of competitors, consumer needs, market stability, etc, should all be included in your research before you write your business plan.
Step 2: Objectives of the plan
After researching all indices, you should also have objectives you want to achieve. This step in the plan spells out the purpose for what the business you are trying to do entails. It will serve as a road-map for your business and should be included when the writing your business plan.
Step 3: Create company’s profile
Normally, most of the points outlined here are found in the company’s website. Creating a company profile online can help investors validate your claims when writing a perfect business plan.
You describe your company, the history, products and services you would render to your customers, the management team roles and functions. All these are vital as potential investors will be interested in knowing about such information in your plan.
Step 4: Presentation
Aside writing out your plans perfectly documented in a clear and concise form, you might be called upon to defend such business plan as all investors will want to know whether they can trust you with their money to make profit in your business. You have to study the written business plan sample so as to convince your potential investors why he or she should invest in your business.
Step 5: Sales and futuristic plan
As earlier said, your marketing plan for the present and future should all be included when writing out a business plan. Whatever strategy you use, it should be described at length. If you check various templates of business plans online, you would see this point included, so it is very important.
Structure of a Professional Business Plan
There are many models you can use in writing a well structured business plan but for the basis of this article, we shall use the universal acceptable format. It should be noted that some aspects of a plan will be more important to some businesses than to others. For that reason, it becomes very necessary to highlight the contents of such plan to fit the business scenario.
A good business plan should have the following, orderly arranged
- Cover Letter
- Title Page
- Table of Contents
- Executive Summary
- Company Profile
- Management Structure
- Service to render or products
- Industry Research
- Sales and Marketing
- Futuristic projections
The cover letter is a formal letter that introduces the business to the reader. It is this letter that sells your business idea to the investors. Here, you try to appease the reader. A secret to writing a good cover letter is to think like the reader. It usually contains the address of the receiver, your address, salutation, body (the well written content), conclusion and signature.
The tittle page spells out the name of the business, date , founder’s name and your business logo (optional). Make sure you keep it simple as ever but professional. Avoid shouty colours in your design of the title page.
NB: The remaining points are embedded below in the free sample business plan templates.
If you are ready to risk your time and resources (human and financial) to kick start a business, we suggest that you write a good business plan or you hire someone to do that for you.
To have a successful business, please note the following
- Plan a business that can survive and grow with or without you
- Create a vision driven business rooted on core values
- Plan a business that is customer friendly
- Inculcate a strong team to lead your business
- Let your business be seen as a good corporate citizen that is reliable
- Create a target based business and strive to reach that target
- Make sure your business has a strategic marketing plan to help you achieve the objectives for your business.
While the above info should guide you in writing a good business plan, remember that if you fail to plan, you plan to fail. Drop your questions, comments and suggestions below and don’t forget to share what you have learned.