How to Write your Business Plan – Step-by-Step Guide

Though business strategies alter in terms of scope and length, every successful business strategies contain common components. The strategy must take into account your specific business along with its environment.

Below are certain sections that you can include in your business strategy:

1. Executive Summary

The executive summary is a sketch of the main points incorporated in your business strategy and is mostly contemplated as the most essential section. It is generally the first division that a potential lender or investor will read, and can be the only division to be read hence it must be devised properly.

This essential summary must:

  • Comprise highlights from every other section to explain the fundamentals of your business
  • Be interesting enough to encourage the reader to carry on to read the rest of the business strategy
  • Be brief and concise

You will wish to explain your business concept, the market, legal structure (like a corporation, sole proprietorship), competitive advantage, and your personal experience.

2. Business Strategy

This section must be in brief but clearly explain what the business is all about. This section must incorporate the following components:

Introduction

This segment must provide readers with a very short overview of your business — where you are currently, where you have been, and where you will be going in the future.

It should include:

  • A brief history of the business
  • An explanation about your service and products
  • The motive of your business
  • The legal structure of your business

Current Positioning

  • Your present-day position: what phase of the business lifecycle is your firm in?
  • Your achievements
  • Your organization: is it stable, growing, or contracting?

Competitive Edge

  • Your competitive benefit: what is your benefit over the competition
  • Your contenders: their pluses and minuses?
  • Your business design: why is it constructive?

Growth Strategy

  • Growth timeline: in which position do you spot your business after a year?
  • Goals
  • Milestones

3. Operational Protocol

Your business strategy must outline your present operational needs along with your projected needs for the upcoming 3 to 5 years. Your accounting systems and inventory management must have the capability to generate up-to-date reports.

You might include:

Daily Functions — give a basic description of the daily functioning of the business

MIS — specify how you strategize to control stock, control quality, manage accounts, and track your clients.

Facility needs — determine your requirements with regards to size and location. Add any relevant documents in the appendix of the business strategy, like supplier quotations or lease agreements.

Information technology (IT) needs — determine the IT processes you will be making use of for your business. Since this is the main factor for maximum businesses, specify whether you are using an IT support service or consultant and frame any planned IT growths.

4. Marketing Plan

Narrate the activities that will be used by you to sell and promote your service or product. You must talk about each of the “four Ps” of the business strategy:

  • Your Product — how does your service or product meet the requirements of your chosen market?
  • Place — how have you planned to get your product to the clients?
  • Price — what amount will you charge for the service or product and why?
  • Promotion — how will you link to your target market?

Your marketing plan must also contain information regarding your budget.

You might also wish to include an account of your “best possible customers”. You can generate profiles based on client type — consumers, wholesalers, or retailers — or base your parts on demographic details such as age, income level, and location.

5. SWOT Analysis

Administering a SWOT analysis is an essential part of business planning. An accurately prepared SWOT analysis depicts to the investors that you have objectively and realistically considered these elements.

Banks and various lenders know that businesses will be encountering difficulties at some point, and wish to perceive how you will be dealing with these challenges. Keep in mind that overestimating opportunities and strengths or neglecting potential problems will weaken your credibility.

Putting effort and time into administering a comprehensive SWOT analysis might help you:

  • Foresee problems and make required changes
  • Make plans and sound decisions
  • Put away resources to take the benefit of potential opportunities

6. Social Responsibility Plan

Applying good social and environmental practices is good business — it might provide you with a competitive benefit and aid in fostering goodwill towards your business. In this segment, you must talk about methods in which the business respects people and honors ethical values, your environment, and the community.

You may wish to incorporate information about:

  • The initiatives and environmental policies of your company
  • The contributions made by your company to your community
  • Pertinent certifications like organic certification, fair-trade certification, or Leadership in Energy and Environmental Design (LEED) certification

7. E-Commerce Plan

Using information technology effectively is an essential part of business management. In this segment, you must sketch how you plan to make use of internet technologies for reaching customers, managing your business, and reducing costs.

You need to include details about:

  • E-commerce undertakings (selling your service or product online)
  • Software and hardware requirements
  • Development of website
  • Associations with external information technology experts

Remember that applying e-business plans can save money — in case this is the condition for you, you may wish to emphasize potential savings in this segment.

8. HR Strategy

This segment addresses the way you plan to supervise human resources procedures and your employees. You must also talk about your short-term as well as long-term strategies for employee recruitment, retention and training. If suitable, discuss any advisors, consultants, mentors that extend your support.

You can include:

  • A short organizational sketch or chart of your business
  • Who does what, along with a concise job description of every position
  • The required skills needed for every position
  • Details about your employee training schemes and arrangements
  • Any other applicable details related to personnel (such as training budget, gaps in your team)

9. Financial Predictions and other Information

This part of your business plan transforms your strategies into numbers. As a part of any business scheme, you will be required to give financial projections for the business. Your forecasts must continue for the coming 3 to 5 years.

However, the initial 12 months’ forecasts must contain the most information, along with assumptions both in terms of revenue as well as costs, so the investors can distinctly see your reasonability behind the numbers.

Your financial forecasts must include:

  • Cash Flow Descriptions — this describes a pattern for cash balance and amount of cash flowing monthly for the first year to a year and a half. It includes working salaries, capital, and sales.
  • Profit and Loss Prediction — talk about the level of profit you are expecting to make, given the costs of furnishing services and goods, your estimated sales, and the overhead costs.
  • Sales Forecast — this tells about the amount of money you are expecting from sales of the service and/or product.

10. Business Exit Policy

This segment of your business scheme talks about your future strategies — when the time approaches, how will you be exiting your business? Early strategizing will provide you with the opportunity to take into account all of your possibilities, including the plans that might take time to apply.

As you develop your exit plan, you will wish to ask yourself these questions:

  • When shall I leave my business?
  • What will I do with my business? Choices include passing it on to some relative (family member), selling it, or shutting the business and dissolving its assets.
  • How am I supposed to decide the value of the business?
  • What amount of money will I need to enjoy a comfortable life once I exit my business?

After you have made your choices and have fixed objectives, it’s time to attach an exit plan to the business strategy. Although you might continue your business for some more time, a solid plan will work as a roadmap to your future targets.

11. Sample Business Strategies and Additional Resources

You’ll need to review your plan thoroughly after it’s written once. Try and avoid making use of jargon — the person going through your plan might not understand the businesses the way you do.

You can ask family, friends, mentors, and associates to review it. Remember not to be afraid of seeking advice from professionals like accountants and lawyers. Keep in mind, your business strategy portrays your business, so you must keep it as professional as possible.

Synopsis

This is the complete step-wise guide to develop your business plan to run it smoothly and to acquire investors and future employees.

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