How to Write a Business Plan
Writing a business plan can be overwhelming. It’s a lot of work, and getting started is the hardest part. But, once you’ve made it through that first draft and started revising it again and again, your business plan will start to take shape. And after that? With every draft you write, your business plan gets better and better—and so does your business!
Identify your objectives
Write down your objectives. Make sure they’re clear and well-stated, and that every objective is achieved by the end of the plan.
Examples of objectives:
- To create a new marketing plan for our company to help us increase sales by 15% by next quarter.
- To expand into overseas markets in South America and Europe with a goal of increasing overall market share in those regions by 20%.
- To implement an employee training program that helps reduce turnover rates by 10% over the next year.
Know Your Audience
Before you start writing your business plan, it’s essential to understand your audience. The people who will read and evaluate your proposal are likely to have a variety of needs and expectations; your job is to anticipate them all.
Partners, employees, customers, and, most importantly, financers will read your business plan. Knowing the goals and objectives that drive each group will help you craft a more effective case for funding.
You’ll also want to consider the biases and prejudices of each potential reader—for example: if you’re writing for an investor with ties to another company in the same industry as yours (even if it’s not direct competition), he may be predisposed against any new venture that might threaten his favored brand’s market share—and make sure your presentation addresses those factors head-on.
Do Your Research
Once you’ve completed the first steps, do your research. This is probably the most important part of writing a business plan. Your research will help you pinpoint what kind of business idea to pursue, who your target market is, and how much money is involved in starting up (and running) the business.
- Research your target market: Who are they? What do they like? How old are they? What media do they use? Where do they live? What do their homes look like? How much money do they make each year/monthly/weekly/daily/hourly that could be spent on products or services offered by your company?
- Research competitors: Is there anyone else in this sector doing anything similar to what you want to accomplish with your proposed company (or if not exactly like it)? If so, what makes them different from yours—and why should people choose one over another when making purchases online or at brick-and-mortar locations near home or work!
- Research industry trends: Where does this industry stand right now—maybe trending upward due to technological innovation but possibly declining since 1990 due to globalization leading towards fewer local jobs available within certain sectors where outsourcing overseas has become more prevalent among large companies seeking cheaper labor costs outside US borders since NAFTA took effect 20 years ago today!
Define How You’ll Reach These Goals
Once you have an idea of what your goals are and how to reach them, it’s time to put some meat on them. You need to define how you’ll measure success. For example, if your goal is “to increase profitability,” ask yourself: How much do I want to increase profitability? What will be the target profit margin (in dollars)? When will I achieve this goal? What metrics will I use to measure my progress toward that goal?
And lastly, how can I use these results when it comes time for me (or someone else) to make decisions about future actions or investments?
The answers to these questions may be different depending on whether you’re trying to grow a business or change one that’s plateaued. In either case, however, they should help guide all the other decisions in your plan so that they’re connected by a common theme of growth and improvement—and ultimately lead somewhere beneficial for everyone involved with the business!
Define How You’ll Measure Success
It’s important to define how you’ll measure success. This helps ensure that your plan will be useful throughout the life of your business, and not just in the early stages.
You want to look at it from all angles: What are your goals for revenue? How will you know if you’re using resources effectively? What does success look like for each department or employee?
Success is not limited to just monetary measures (although money matters). Success can also be measured by whether or not a project was completed on time, whether or not employees were happy in their roles, etc. Think about what makes sense for your company and its goals before finalizing any of these definitions!
Write an Executive Summary
After you have completed the first draft of your business plan, it is time to write an executive summary. The executive summary should be no more than two pages and written in a clear and concise manner.
It should describe the most important information in the plan, including industry overviews (how big the market is), competitive analyses (what are the strengths and weaknesses of your competitors), financial forecasts (how much funding do you need), SWOT analysis (strengths, weaknesses, opportunities, threats), mission statement and vision statement.
Describe Your Company and Teams
- Describe your company’s history.
- Explain how you became an entrepreneur and what motivated you to start your business.
- List the members of your team, including their roles, strengths, weaknesses, and goals.
- Describe the values that define your organization and its culture.
- Outline the overall mission of your company—what do you want to accomplish?
Outline Your Products and Services
Outline your products and services.
First, you’ll want to list the products or services that you offer, as well as why they’re unique and what benefits they provide to customers. Next, describe the market for your product or service—who needs it?
How big is the potential market for this product? Who are the competitors? You should consider all of these things when outlining your product or service offerings:
Consider What Could Go Wrong
There are a lot of things that can go wrong when you’re running a business. But if you plan for them, you’re more likely to avoid them or at least be prepared for them.
Write down all the things that could go wrong with your business, then brainstorm ways to deal with each one of them. For example: “Our company is in danger of going under if we don’t get enough clients.”
Your solution might be something like: “We’ll hire another salesperson and start attending networking events so we can meet more potential clients.” Make sure that every solution has its own backup plan in case it doesn’t work out as expected.
Review and Revise Your Business Plan Regularly
While a business plan is an essential tool for any entrepreneur, it is not a static document. You may find that as your company grows and changes, so too does your plan need to change.
As you gain more experience in the role of CEO and start making decisions based on what’s best for your customers and employees rather than what you think might work best for your business, reviewing earlier sections of your business plan will help guide you towards even better decisions.
Keep this in mind when revisiting earlier sections of your plan: If things have changed since writing them down, look at that part again and consider whether it needs to be updated or revised based on new information you’ve learned since then.
This will help keep all parts of the plan up-to-date with current information as well as ensure that there aren’t any contradictory messages between different sections (e.g., saying one thing about how much overhead costs will be but then later saying something else about cutting costs).