A well thought out business plan sets up your business with clear goals and steps to reach those goals. Fullstack shows you the way to write a plan.
Why do you need a business plan?
No matter how brilliant your new business ideas sound inside your head, putting them on paper is just as important as the ideas themselves.
If you don’t have a plan, you will struggle to convince your staff, investors, shareholders, and lenders to help you make your new ideas a reality.
A business plan is a written document that outlines who or what your company represents, what are your business goals, how you plan to tackle the problems that will emerge, and how you can assure your investors their returns.
A common misconception is that business plans are only required for companies going through the startup phase, but this is not true.
Having a well thought out business plan can be helpful to businesses regardless of any growth stage, as it can help your business have a clearer goal to work towards.
Essential Elements of A Business Plan
- In any well crafted business plan, there needs to be a number of vital components, which are:
- Executive Summary: Some people prefer to write it in the end, but this should come first in your plan as it is an overview of your business.
- Opportunity: This section should answer questions like what you are selling, your audience, how you plan to solve problems, etc.
- Execution: This part covers how you plan to take your opportunity and convert it into an enterprise. It should include operations, sales and marketing plan, and your metrics for success.
- Company & Management summary: Use this section to describe your current team and what you look for in potential recruits. You can also include a brief overview of your location, legal structure, and history.
- Financial Plan: Your business plan will be incomplete without an adequately calculated financial forecast. It is ideal to include a chart detailing your projected sales, profitability, and expenses. You can also add your funding requirements if necessary.
- Appendix: If you require additional space for extra information or product images, use this section to furnish those details.
6 helpful tips on writing your business plan.
Research, research, research
You must carry out intensive research and study your product, your goals, and your market.
Ideally, you should be spending twice the amount of time evaluating, thinking, and researching instead of writing your plan.
For a perfect business plan, you should provide a sensible understanding about your company, the market, the competition, and your product.
More importantly, it explores the feasibility of your business idea to help your readers get a clearer understanding of your business.
It is ultimately up to you amount how much you want to discuss about the details of your company and the market you are planning to enter.
Be Precise With Your Plan’s Purpose
A business plan can be very versatile. It’s a blueprint of your business and it tells readers how your business will tackle hurdles along the way.
This will be helpful if you plan on bootstrapping or self-funding your business.
On the other hand, if you want to appeal to your investors or lenders, your plan would need to be written for a different purpose, and you will have to formulate a plan that places a greater emphasis on their requirements. Investors, will be interested to see how their investment will multiply over time, particularly with an exit event where they can realise some capital gains. Lenders will be more interested in your capacity to repay the loan on time and will value your cashflow situation more.
Keep details of your business plan as clear and concise as possible. This is not the time to be wax poetic on your vision of the business, so try to define your business goals clearly as you can. Tools like the Lean Business Canvas can really help. You can take a look at these great examples.
Build a Company Profile
Before you start working on your business plan, you should be working on your company profile first (if you don’t already have one).
A company profile must include your organisation’sdetailed background history, what services or products you offer, your target audience and market, your resources, your plan for overcomingmarket problems, and what is unique about your venture.
Generally, you can find company profiles on the business’ ‘About Us’ page, or on their Linkedin page. The primary goal of a company profile is to help attract talent and possible customers.
If you have a company profile already completed, you can use it to help you craft your business plan. It helps you to save time on writing your business plan, making the entire process a lot simpler.
Document Every Area of Your Business
As far as your investors are concerned, their primary goal will be to know how much returns they are getting, and how in what timeframe will they be seeing their returns.
Therefore, a considerable part of your business plan involves convincing them that your business is going to make them money, and how it’s going to happen.
Since they will want to receive as much information as possible about your company, you should document everything like your cash flow, expenses, and industry projections.
You should also include minor details like your company’s IP and launch strategy, even if they seem like small and insignificant details.
Be Aggressive In Your Marketing Strategy
A top-notch business plan must always include a comprehensive marketing strategy. Investors would want to know how you plan to reach out to the target market.
- Generally, a marketing plan should outline your business-specific marketing goals such as (but not limited to):
- Introducing a brand new product or service
- Entering new territories by the company
- Increasing sales of a specific product, price range, or market
- Establishing long term contracts
- Increasing prices
- Refining a product etc.
Your marketing objectives should have numerous goals and strategies towards achieving them.
It should also include the estimated costs, and so you must include a section where you allocate budgets for every project planned.
Know Your Audience
When you write your plan, use language that your audience will easily understand. Avoid academic writing, and keep it simple and to the point.
For example, if your company is manufacturing a scientific instrumentin the medical field and your potential investors are not doctors or familiar in medicine, you should avoid using unfamiliar acronyms and jargons.
Accommodate your investors and make them feel as comfortable as possible. When explaining your product, make sure it is as direct and straightforward as possible, by using terms that everyone is familiar with. You can use the appendix of your business plan to furnish the full specs if required.
Whether you’re a startup or an established company, a business plan can be an indispensable tool to help your business secure investors, or to realign your business goals.
Not only will it lay the foundation for your business, but it is also a representation of your company. Laying out a complete and precise business plan is not an easy task and requires patience.
Research properly, take your time and follow a proper guideline like this article to write down a road map that best reflects your company and its goals.
In Australia, you can attend numerous meetups and workshops to help you plan and grow your business.