As an entrepreneur, you have thousands, if not millions, reasons why you should note down every single business plan that you have in your subconscious. The first and the foremost thing is that when you are starting a business, there needs to be so much done that for an average human being, it is hard not to forget everything, and if you miss something, your whole business idea might go inside the drains. Because it can be one single mistake, which can be the reason that your entire kingdom crumbles down into pieces.
The second purpose for writing down your business plan is that when you are approaching potential investors for your company. They are going to ask you about the ideas that you have, and an already written down detailed plan will show them. What exactly they are investing in and how serious you are about business? That is given a well-written proposal that can attract big names in the industry to invest in your business. If your plan ends up making your investors confused and if they find it annoying and boring. It will be the sole reason that your business is never going to turn into reality. Be clear-headed while noting down everything the whole foundation of your business. Based on how adequately researched and simply written, your plan is?
From the title and to the introduction, you already know that today we are going to talk about how to write down a business plan and how it can be beneficial for you and your company? I am going to break down the whole article into sections and subparagraphs, so it is easier for you to understand what exactly we are talking about at that moment.
What is a Business Plan?
A business plan is a document that will explain everything about your business. With the help of a business plan, an entrepreneur can effortlessly define what products or services they are selling. How is your business going to bring the capital? How many staff do you have or needs to hire for different departments? How much money do you have in the present? Strategy classification? The place where you are opening your business is rented, or are you the owner? Such details will be explained in a business plan; it doesn’t matter if it’s a small or big thing.
Why Do You Need To Write a Business Plan in The First Place?
Like I have mentioned above that writing down a business plan is not solely for the entrepreneurs, it is also for the investors for them to quickly catch up on everything related to your business. But there are also different justifications even when you don’t need an investor still why you should write a business plan for the following purposes:-
To sort out the plans
Whenever an idea pops up into your mind, it is jumbled up and tangled together, which can be confusing in different places. Once you get started to jot down that plan on the paper. You will know how much capital do you need to start the business? What kind of resources are you going to need to buy to put your plans into action?
Choosing the most beneficial idea
A creative mind is going to have thousands of ideas for business. But you should know that not every industry is for you. When you write down those numerous ideas with their pros and cons, you will find the concept with the most advantages is going to be the one which is going to bring you the fortune.
Building an empire is not a child play when you are risking so much while putting your energy, money, and time into it. Make sure that you are doing the necessary research. Like who are going to be your targeted customers? And your most dangerous competitors in the market. This way, you will be able to provide precisely what your customers need and what your competitors are failing to do?
Finding the best employees
Business can’t run by a single individual. Even when your business is a startup, and you can’t afford too many employees. There are going to be departments in which you are going to be clueless, and for them, you are going to need experts. If you know people who can handle such things, note their names down for the interview and choose the best one.
Approaching a co-founder
Every entrepreneur got different reasons to partner up with other companies or a single individual. Some of them do it for the capital, while most people do it to get half of the money and also someone who got years of experience in this field. So having an understandable document in which they can see your target, how much your business can earn, and other things. If they like what you represented through your papers, they are likely to jump on the board with you.
Who are your Competitors
There is not even a single field in which you won’t find competition. It is in your business’s best interest that you find every competitor in the market and what exactly they are offering to their customers and employees to give you the fierce competition. You can easily find your competitors on google. Make sure you provide unique concepts and products and services to make your clients happy.
How Should You Be Writing a Business Plan?
It might sound simple to you to write your business plans, but it is not valid. Here are some of the critical factors that you should keep in mind while writing a persuasive business plan:-
Who is your targeted audience
To make a boring story interesting for the readers it is in the hands of the writers. The same thing goes when you are writing the business plan. It doesn’t matter if you are doing it for yourself or for the others. You should keep your language simple and interesting. Illustrate every idea, the problems, and the solution. Even include irrelevant points briefly, if the need arises, and someone asks about it.
Keep your documents brief and to the fact
If you are trying to get your business funded and meeting the investor? If the investor is a prominent businessman and only gave you an hour to present your idea. Make sure that the documents that you are presenting briefly explain everything and leave out the unnecessary details because they won’t have time for such things. Also, your documents should be no more than twenty pages. Even if you have a new report which you think is really important, you can put them in supplements.
Managing the writing technique, manner in one rhythm
Sounds like I am talking about music? Then the answer is no, one person must write the entire documents, and everything should be clear and in rhythm, changing the tone of documents can leave clients and investors stunned or infuriated. Also, it is a must that your final papers are edited. Otherwise, people don’t want to waste time on someone who can’t represent the well-edited and well-versed reports.
How To Formulate a Business Plan Outline?
Just like every entrepreneur, you may have a basic structured plan in your mind. But just like when you are answering an essay type of question, you are not only going to add a heading to explain the basics. You are also going to add a subheading to reveal other parts of that question.
The same thing goes when writing a business plan; it makes it easier to understand the whole document if each paragraph is outlined, like summarizing the entire section with that outline. Suppose you don’t have any idea about how you should describe each article.
Here are the following seven examples with the help of them you can outline the whole document quickly:-
- Executive Summary
- Company Overview
- Market Analysis
- Products and Services
- Marketing Plan
- Logistics and Operations Plan
- Financial Plan
What Are The Things That You Should Add To Each Paragraph of The Business Plan?
Over here, I will be explaining what you should put under each outline/paragraph? Everything will be described in detail and simple words so you can have a clear idea.
Suppose if I go ahead and start describing what exactly executive summary means, then to put it into simple words. When you are done writing a book and now doing the marketing to let your potential readers know what exactly your book is about and the characters in it, you are going to either write a blurb or summary.
Making this blurb/summary enjoyable is really important because if the reader thinks the blurb is fascinating, they will buy your book; otherwise, they will skip reading and buying your book altogether.
That’s the exact case with a business plan if you are trying to get an investor or a partner? It becomes necessary that you write a one-page summary that is going to present your whole document in it.
Make sure to include the highlighted points from the papers into the summary. If that executive summary can grab the reader’s attention, they will definitely read the whole document. So the executive summary is like a deal maker or breaker for most businesses.
But if you are confused about the fact that what precisely you need to include in that executive summary of your business plan then here some of the ideas for you to retain in it:-
- The intention of your business:- What exactly your company does?
- Your company aims and perceptions:- What precisely your corporation wants to achieve?
- Illustration of your product and differentiation:- What is your company is selling, and why is it different from the products available in the market.
- Targeted clients:- Who is going to buy your product and services?
- Retailing strategy:- How are you going to promote your product and reach potential customers?
- Present time financial state:- How much to be commonly you are earning in the present?
- Prediction of the financial state:- What are your predictions about your company’s future earnings?
- Expectations from investors:- How much capital are you expecting from the investors?
- Employees in your team:- Members who are handling different departments of your company.
Now in this paragraph, you have to give information about your company. You can explain the whole concept of your business with the advantage of these few statements.
- The first thing that you need to explain is who you exactly are and what exactly are your plans for the company?
- You can explain everything in detail about what exactly the company is doing (is it selling services or products) and how it is going to help people and solve their problems?
- Go into the details about your current and potential customers and the companies that you are dealing with and what your corporation is attempting to fulfill?
- What exactly do you have in your product or services that the most significant competitors of yours in the market throughout the years failed to serve the customers, and how is it going to meet the consumer’s expectations?
- How many experts did you already hire for the different departments of your company and adding the vital employee’s information, and how much salary are they taking in the first place?
- Where honestly do you see yourself and your company in the next years or the five to ten years from now on? Are you only going to focus on your current business, or are you expanding it in the near future?
- Are you still trying to find the ideal place to open your office or your store, or did you already found it? How much is the rent of that place?
- Is your product or services perfect, or are you going to try to improve them with time and according to customers’ demands?
With the assistance of these valid points about your company description, it will highlight the main key aspects of the company and also about you, which can be enlightening for the investor or the reader.
You can’t jump blindly from the airplane without taking precautions ( parachute). The same strategy applies when you are starting up your business. I am sure you had high hopes for your company and having a good number of sales and becoming the next millionaire or billionaire. This hunger to become successful can most of the time leave you blind. You are not able to see the negative side or refuse to look on the other hand, which can be dangerous for your business. Want to know why?
Let’s say you are making a romantic movie for the people who love comedy. Your film is going to fail on the first day at the box office. Some people might watch it out of curiosity, while others will never want to watch a genre that is going to bore them to death. So you see, the producer was targeting the wrong audience from day one. Suppose they would’ve released it somewhere, where people love to watch romantic movies. It could’ve been the next hit, but they blindly took the risk, and the result was a failure.
When you are entering the business world, you have to know the market if you are opening a high-end clothing store that sells expensive clothes in the city where people can only afford cheaper stuff. So how do you think your store is going to survive in such a market? You are barely going to make any sales, and your store will be closed in a few months.
I am going to tell you a few facts and the precautions you should be taking before starting your business.
Try to understand what your clients need
This is a vital truth about the market your client is your god and to survive in the market you have to make them happy and understand what their requirements are? If you are targeting youngsters, then it is given they like to stay up to date about everything, be it technology or fashion just about anything. So you need to keep on improving and updating to engage these types of customers. Otherwise, they will go somewhere else who can keep up with their demands.
Research on your customers and market demand
Without doing research, forget about seeing the other day in the market. If you are selling weapons like a gun? You also have to do the proper research on how people in that city or area require weapons? Are there regular demands for firearms? You have to make charts to see if the sale you are going to make. Is that going to be enough for your survival for the long term? Is there going to be an increase in the firearms demand in the near future? Researching this type of business is necessary because every ordinary person doesn’t need weapons. There are only specific customers, and based on their demand and where they live, you have to make every decision after analyzing these facts.
Research is not only enough
When you are doing essential research for your industry? The results which come out of it are based on the past or some other business owner experience. But you might face a different situation than these owners. So you can’t make your decision primarily based on research. You also sometimes have to go with your guts and make a decision both on research and experience.
Products and Services
The primary purpose you have launched your own business in the first place to provide your customers with a specific variety of either products or services. Over here, you need to explain to the readers how many products you are exactly selling? After that, you provide a brief statement about each and every product and if you are selling a single product or four to five products. You can explain everything into the details to your investors and partners.
Giving them such information about your products is essential. It helps them make decision-based on their experience if your product is going to survive in the market or not, or they can even give you insight into exactly what you can do to improve the quality of your services or products. Also, you need to mention where exactly your products are coming from. Are you making them with your team, or are you going to purchase them from some home-based entrepreneur?
Your business can’t survive in this modern tech world. If you are not marketing your product appropriately? In the past, people had only a few platforms to promote their products, like giving advertisements in the newspaper, radio stations, and tv ads. Where promoting your merchandise through radio and papers might be cheaper, but it didn’t have that appeal to the customers. But to make tv ads you needed to approach a well-known actor or any celebrity which is quite expensive and pretty much expensive for any startup.
But as our technology starts updating now, we have so many social media platforms where you can promote your products without spending a fortune on it. You can approach a YouTuber and let them help you promote your products. You can get so many Instagram influencers who got a good reach to their followers to promote your product. You can even give ads on Facebook. But the thing is to target the right audience you need to choose the right platform for your products otherwise, your marketing strategy will definitely fail.
To attract an audience, you need to focus on these four essential pieces of information in a convincing way. But it also depends on the company owner. How much data do you want to reveal about your product to the investors and readers? But here are the top four information you should include.
Cost of the product
How much is the price of your product, or is there any type of deal or discount on the product? Also, why in the first place did you choose this exact price for your product?
Detailed information about your product
In this category, you have to let your reader know what exactly your product is? Further, how comes it is different from almost similar products that marketers are already selling? Why should the customer buy it?
Right platform for the promotion
This I have already mentioned, it is important to choose the right platform to promote your merchandise and also your marketing budget. If you are selling beauty products, you can hire a beauty Instagram Influencer or a beauty vlogger YouTuber. It is affordable in comparison to tv ads; also, it will target the right audience who are seeking the best beauty products.
Where the customers can purchase the product from
Now in the digital world, companies are not only selling the products from the stores. So are your customers going to be available to buy the product from the official online site, or they need to go to a specific location to purchase it?
Logistics and Operations Plan
This section is essential for your advantages. Whether you are seeking an investor or not, you have to include logistics and operations into your business plan to get an idea about the workflow you have to carry out to turn your business notion into reality. Make sure you don’t forget to write down these things in your operation:-
If your company produces chips or any type of food product? From where will you be able to get the potatoes and all the spices which you have to sprinkle on top of it like salt, chili, and the vegetable oil to fry those chips? But the biggest question is that do you have any place to prepare all of these products?
Different stages after the production
Are you going to handle everything from manufacturing the product to the wholesale or drop shipping your merchandise. Do you know the exact times it takes to prepare these products, shipping, or transporting them to the stores? What are your plans when all of a sudden, you will get a considerable demand? How are you going to meet customer demand?
It is known if you want to start a business, you and the people in your team are going to need a place to work from. If you have a small group of four to five people and your business is related to the software work, then maybe you can do it from a home office or even a garage. But if you are preparing products which require heavy machinery, then you have to rent a place or buy a property to get your business started.
Tools that your business is going to require
Writing down about every single gadget and tech stuff that you are going to be using meanwhile running your business. These things can be small and even big such as fans, lightbulbs, computers, and other machinery. You must include them to get an idea about what your requirements are going to be related to electricity. So you can get a rough idea about the electricity bill.
Shipment and fulfillment
There are lots of things to do when you are opening a company. But according to the company size and requirements, sometimes there are only a few tasks. But it is up to you as the business owner and also your capabilities how much can you handle or do you need somebody else to handle the tasks.
This big question always arises if you are producing a product. Nobody wants to make a new product; then, there is a necessity in the market. How much should you create? Where all of these stocks are going to be placed? How are you going to supply it to the marketers? How will you be able to keep track of the stuff that comes in your company also getting shipped?
It is going to show your partner and even your investors who are going to be the reader. How strict are you about keeping track of every single detail about your factory? How you are micromanaging everything from the stocks to the shipment and even small details like electricity bill. Everyone wants to partner up or invest in someone who knows exactly what they are doing in the first place.
You can spend millions on the business. Your idea might be the greatest thing that this world ever came across to. You can even become a workaholic to show how determined and hard-working a person that you are? But in the end, everything comes down to how financially stable your business is? How much are you earning on a yearly basis, and how much can your business earn in the future? Nobody wants to partner up with someone or invest in it if the business is failing financially and not bringing enough capital for survival presently.
To present your financial statement in front of the reader, you can divide it into three parts to help them comprehend everything effortlessly:-
This is going to assist the readers in interpreting all the earnings that your business is making and the expenses your business is dealing with. This is going to show them if your business is going into the loss, it is earning a good profit. If you are in the process of launching your startup, you can still create a predictable Income Statement, and how much have you already spent?
It is going to help readers to see how much do you have in your possession and how much do you owe to the other people?
This section of the financial statement is almost identical to the income statement, but over here, you have to show when you are getting the payments from your client? When do you need to pay off the expense for raw materials your company is buying when is it time to pay the employees and the electricity bill and rent these types of things when you are running low on the cash and your earning increases? If your expenses are more than the earnings, it means your business is in the danger of shutting down because of a lack of high cash-flow.
I hope this article business format will help you present your venture in a great setup for your readers.