It’s 2023 and business owners and entrepreneurs are still making this one common mistake.
THEY DON’T HAVE A BUSINESS PLAN.
A business plan is your roadmap. It is your guide, the outline of your business that communicates your goals and the methods you will use to attain those goals and the timeframe to achieve them.
Having a business plan so essential, yet, many business owners and entrepreneurs fail to have one. A business plan should be the first thing you have before even getting a logo, website or even business cards.
A business plan gives you the ability to lay out your business goals and track your progress as you grow. Without a business plan, you basically just have an expensive hobby.
Writing a business plan can also help you secure loans and investors to help grow your business.
Here’s a guide and breakdown of a traditional business plan. Let’s get started the right way.
How To Write A Traditional Business Plan:
1) Executive Summary: Even though it appears first in the business plan, it is important to realize that the executive summary is usually written last. This is where you make your first impression about your business. Be clear and concise. This is where you make your business entice whomever will read it.
2) Business Description: What is your business about? This is where you go into detail about what type of service you will be providing? Who are your ideal customers? What kind of products will you be selling? This section should give a good perspective on how you will affect the industry. How does your business differ from the competition? Boast about your strengths.
3) Organization & Management: A lot of first timers do not know the legal structure of their business. This section breaks down how your business will operate and how it will be structured. Will your business be incorporated, or will you form a general partnership, or get a limited liability company (LLC) or will you be sole proprietor?
By knowing your business structure, it will be easier for you to put together an organizational chart which will lay out who’s in charge of what in your business. Showing each person unique experience and how it will contribute to the success of your business.
The operational plan details how your business will run. The daily ins and outs of your business. Will you have a physical location, types of employees needed, inventory requirements, supplies and other operational details. This is where you will lay out detailed strategies for managing, staffing, inventory and all the day to day stuff involved in running your business.
How will you run your business?
4) Market Analysis: Marketing is always key. And Market analysis is about competitive research. What makes your competitors successful? Market analysis is like being a PI. You want to learn about your competitors and how you differentiate from them. Market analysis is where you learn about what successful competitors are doing, what makes them successful and figuring out how you can become better
5) Service or Product Line: Start by describing the service or product you’ll be offering. Break down how it benefits your customers/clients. What is it that you are creating? Does it need to be trademarked, copyright, or patent? In this section you go into detail about your service or product.
6) Marketing & Sales: You’re probably wondering what’s the difference between market analysis and marketing and sales. While market analysis is about researching the competition, marketing and sales is about identifying who your customers and clients are and how you will reach them. But a lot of entrepreneurs fail when it comes to marketing. Ask yourself; How will you sell your product or service? The purpose of marketing is to demonstrate that you have a solid and thorough understanding of the people you’re planning to sell your product or service to. What is your sales strategy ?
7) Funding Request: Will you need funding? What kind of funding? How much? And What exactly will you use it for? Do you want debt or equity? Do you know the difference between debt and equity?
Be realistic. Think about the start up cost. Think about inventory. Think about whether or not you need certain equipment. Ask yourself, if someone were to give you $20,000 to fund your business, how would you use it? How would you pay it back? How long would it take to pay it off?
Establish that you’re a good candidate by having a detailed and well thought out plan of how much money you’ll need and how you’ll pay it back.
8) Financial Projections: How confident are you that your new venture will be fruitful? This is where you show your confidence. You’ve crunched the numbers. you’ve done your research. Your goal is to convince whomever is reading your business plan that this your business is stable and will be financially successful.
Create a clear projection of your financial prospective outlook for the first year. This must match your funding request. Include forecasted income statements, cash flow projections, balance sheet and capital expenditures budget. This is where you get creative and use graphs and charts to bring to life the financial story of your business. Break it down into quarterly or monthly projections.
9) Appendix: Finally, the end. We’ve reached the closing part of writing your business plan. Now it’s time to gather your supporting documents. In most cases you’ll be asked for specific information; this is where you’ll have that information. Whether it’s your credit history, resume, picture of your products, license, permits and legal documents. The appendix is where you’ll have all your supporting documents.
