Are you wondering how to write a business plan but not sure where to start? Well, the fact that you're on this page means that you're already one step ahead. Too many people embark on ventures without giving much thought to the nuts and bolts of their buisness. What they don't realise is that:
Failing to Plan is Planning to Fail!
A business plan serves two very important purposes:
It gives you, the future owner of this business a clear sense of direction about what you're setting out to do and exactly how you aim to achieve it. It gets you thinking of the specifics of running a business such as looking at your competition, finding out how much your up-front costs are likely to be and how you intend to sell your product or service.
It serves as your very first marketing document which important people like your investors and bank manager will need to buy into before they hand over any money to you. If you can't sell them with your plan from the start, your chances of success are slim.
Before going any further, check out this useful and informative short video from Bloomberg which gives an excellent introduction to business plans:
Main Elements of a Business Plan
This should provide a bird's-eye overview of the overall business plan. Try to keep it concise and to the point. The sections following this will give you ample chances to go into details.
Objectives: What is the main purpose of your business? E.g "To provide quality and affordable costume jewelry to the major high street chains".
Mission: What is the main aim of your business? E.g. "To become the leading small business provider of costume jewelry to high street retailers within five years".
Keys to Success: What are the things that need to happen for you to achieve your Objectives and Mission?
This section of the business plan is to introduce your company to your intended audience - i.e the people who are going to read it.
Company Ownership: Details such as Limited Company or Partnership, details of number of directors and shareholders. If your company is already trading, then include a brief paragraph of your business activities to-date.
Start-up Summary: Provide details of how the business will operate during it's start-up phase.
Market Analysis Summary
One of the most critical parts of your business plan and a section that your investors and bank manager will go over with a fine tooth comb. If you can't do a good job of this section, then we strongly recommend seeking assistance from a professional firm. It could make all the difference.
Market Segmentation: How is your market divided into different sectors such as wholesale and retail, geographical location of customers and average age of your target market.
Service Business Analysis: If your plan relates to selling services, then include additional information on the market. E.g "Last year, an growing number of people turned towards hypnotherapy to cure bad habits resulting in a 60% increase in demand from the previous year".
Competition and Buying Patterns: Who else is in the business that you're proposing to start? How do they run their shop?
Target Market Segment Strategy: Out of the market segments identified above, which one will you be focussing on and how do you plan to promote your business within this segment. E.g "We plan to target UK smokers with our free introductory hypnotherapy sessions during January, when a large number of smokers are attempting to give up.
Our article on How to Write a Business Plan continues below...
Business Plan Pro
Business Plan Pro is the easiest way to create a professional business plan. Respected by banks, lenders, and the Small Business Administration, this streamlined software has everything you need. Complete with over 500 sample plans, the wizard-driven experience provides instructions by planning experts and powerful resources for a complete business plan. Learn more about Business Plan Pro.
Strategy and Implementation Summary
These are the details of how you plan to turn your business idea into a real business and make money from your target market.
Sales Strategy: How will you set your prices? What offers or discounts will you give customers to get them to buy from you. How will you advertise your product or service?
Key Milestones: What are the main things that need to happen for your sales strategy to be successful?
Put here anything related to ongoing management of the business.
Personnel Plan: How many people do you plan to employ and on what basis - permanent, temp etc.
This again is a critical part of your plan and one that will be reviewed in detail. The good news is that if your sponsors are still reading at this stage, it means that they haven't dismissed all the valuable information you've provided in the previous sections and they now want to see how the numbers stack up!
Important Assumptions: What assumptions are you making that will determine the success or failure of this venture? E.g "We plan to apply for a government grant to begin our initial marketing campaign"... What if you don't get the grant?
Break-even Analysis: This is basically a calculation showing how many items of your product or service you will need to sell before your initial start-up costs have been covered and your business starts to make real profit. Your accountant can help you with this if needed. Further items in this section for which you should seek professional advice are:
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet
Liked our article on How to Write a Business Plan? Join our mailing list for a wealth of tips, tricks, advice and resources for small business!