A business idea is not enough to build a successful business. Ideas are everywhere, but successful businesses are not. The difference lies in having a solid business model and business strategies around your great idea. The best way to do this is to complete a professional business plan.
The business planning process provides structure and guidance, determines resources you need to succeed, establishes a direction for your business, provides a way to measure results and provides a way to gain financing. In a sentence, a business plan takes your idea for a product or service and creates a business around it. In this blog post, we will show you just how to write a business plan.
A typical business plan contains 10 sections and takes anywhere from 180 – 400 hours to complete, as outlined below:
How to write a Business Plan: Executive Summary 2 hours
The executive summary is a 1-4 page description of the entire business. Though this is the first section that your readers will see, acting as a sales pitch to introduce the rest of the plan, it will actually be the last section that you write. When you have completed the rest of the business plan, you will want to return to the executive summary, highlighting the key takeaways of each of the other sections.
How to write a Business Plan: Mission and Vision 5 hours
This mission and vision section outlines your mission statement, overarching vision and values for the company and often presents your company’s value proposition to your clients.
The product and service description gives a detailed breakdown of all aspects of your product or service. This section typically includes a general overview of the current problems in the market and your solution to these problems, your product/service advantages, your proprietary features, any liabilities associated with your product and service and your plan for overcoming these liabilities.
How to write a Business Plan: Market Analysis 20-30 hours
This is the first research section of the business plan. It defines your company’s target market segments, or the groups of people that you will sell your products or services too. You will want to narrow down your key market segments, the lowest hanging fruits, as muss as possible and then provide information about this target segment such as market size, break down of demographics and important market trends.
How to write a Business Plan: Industry Analysis 20-30 hours
The second research section of your business plan should provide an analysis of the industry in which your business will operate. You should provide your reader with an overall understanding of the size and trends of the industry as well as any other important factors that will affect how companies in the industry do business.
How to write a Business Plan: Competitive Analysis 20-30 hours
The third and final research section in the plan provides readers with a breakdown of your direct and indirect competitors. You will want to narrow down the definitions of your direct and indirect competitors as much as possible. You will then want to provide a layout of the competitive environment, evaluating your competitors’ strengths and weaknesses, ultimately communicating your competitive advantages, differentiating factors and why your company will succeed in spite of the competition.
This section outlines your sales goals, distribution strategies, marketing strategies, SWOT analysis (your strengths, weaknesses, opportunities and threats), branding strategies and customer service plan. After determining who your target market is in the market analysis, this is your time to determine how you will target them given your competitive advantages and the strengths/weaknesses of your competitors.
How to write a Business Plan: Operations Plan 10-40 hours
Your operations plan explains all of the internal systems, procedures and equipment necessary to produce and deliver the product to the customer. Relevant sections that may apply to you and your business include location, equipment, purchasing policies, manufacturing process, personnel and organizational chart.
How to write a Business Plan: Management Team 20 hours
This section introduces the reader to the entrepreneurs and executives who will run the business, as well as the board of directors and/or advisors that will play a crucial role. The goal of this section is to assemble a team that is capable of successfully caring out the funding necessary to succeed as outlined throughout the business plan. You’ll want to provide a succinct biography for each member of the management team in this section as well as a complete resume in the appendix of the plan.
How to write a Business Plan: Financial Plan 35 hours
The financial plan breaks down the financial projections of the company in detail, compiling all revenues, expenses and profits into conventional accounting sheets (a balance sheet, cash flow statement and profit & loss statement). The goal of this section is to show how the strategy outlined in the plan is sound from a financial standpoint, presenting a realistic business and investment opportunity. This section also communicates the need for any outside investment and the uses of these funds.
The business plan writing phase is when your idea will grow and change the most. Don’t be surprised if your business plan looks nothing like your original idea. It almost never does! Stick to it — after lots of creative planning, researching, and strategy development, you will have a complete, well-integrated strategy for your new business.
Now you know how to write a business plan, right? Well, as you can see, writing a business plan can be a daunting process. If it doesn’t sound like your cup of tea, contact us for a free consultation regarding our business plan writing and start up consulting services!