Skip to main content
Asked a question 2 years ago

How can one create a business plan?

Where am I?

In StartupTalky you can ask and answer questions and share your experience with others!

Every business needs to have a written business plan. Whether it’s to provide direction or to attract investors, a business plan is vital for the success for your organization. 

A business plan is a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. It also describes the nature of the business, background information on the organization, the organization's financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road map that provides direction to the business.But, how do you write a business plan?

A business plan must include:

  • Executive summary -- a snapshot of your business- An executive summary is a short document  produced for business purposes. It summarizes a longer report or proposal in such a way that readers can rapidly become acquainted with a large body of material without having to read it all.
  • Company description -- describes what you do
  • Market analysis - research on your industry, market and competitors-A market analysis is a quantitative and qualitative assessment of a market.It13 looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation.
  • Organization and management -- your business and management structure
  • Service or product -- the products or services you’re offering
  • Marketing and sales -- how you’ll market your business and your sales strategy
  • Funding request -- how much money you’ll need for next 3 to 5 years
  • Financial projections -- supply information like balance sheets
  • Appendix -- an optional section that includes resumes and permits

Steps for writing a business plan:

1. Research.

“Research and analyze your product, your market and your objective expertise". Consider spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan.

“To write the perfect plan, you must know your company, your product, your competition and the market intimately.”

In other words, it’s your responsibility to know everything you can about your business and the industry that you’re entering. Read everything you can about your industry and talk to your audience.

2. Determine the purpose of your plan.

A business plan, is a  “written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.” However, your business plan can serve several different purposes.

 It is “also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road.” That’s important to keep in mind if you’re self-funding or bootstrapping your business. But, if you want to attract investors, your plan will have a different purpose and you’ll have to write a plan that targets them so it will have to be as clear and concise as possible. When you define your plan, make sure you have defined these goals personally as well.

3. Create a company profile.

Your company profile includes the history of your organization, what products or services you offer, your target market and audience, your resources, how you’re going to solve a problem and what makes your business unique. 

Company profiles are often found on the company’s official website and are used to attract possible customers and talent. However, your profile can be used to describe your company in your business plan. It’s not only an essential component of your business plan; it’s also one of the first written parts of the plan.

4. Document all aspects of your business.

Investors want to make sure that your business is going to make them money. Because of this expectation, investors want to know everything about your business. To help with this process, document everything from your expenses, cash flow and industry projections. Also, don’t forget seemingly minor details like your location strategy and licensing agreements.

5. Strategic marketing plan.

A great business plan will always include a strategic and aggressive marketing plan. This typically includes achieving marketing objectives such as:

  • Introducing new products
  • Extending or regaining market for existing products
  • Entering new territories for the company
  • Boosting sales in a particular product, market or price range. Where will this business come from? Be specific.
  • Cross-selling (or bundling) one product with another
  • Entering into long-term contracts with desirable clients
  • Raising prices without cutting into sales figures
  • Refining a product
  • Having a content marketing strategy
  • Enhancing manufacturing/product delivery

“Each marketing objective should have several goals (subsets of objectives) and tactics for achieving those goals,” states entrepreneur.

In the objectives section of your marketing plan, you focus on the ‘what’ and the ‘why’ of the marketing tasks for the year ahead. In the implementation section, you focus on the practical, sweat-and-calluses areas of who, where, when and how. This is life in the marketing trenches.”

Of course, achieving marketing objectives will have costs. “Your marketing plan needs to have a section in which you allocate budgets for each activity planned," Entrepreneur says. It would be beneficial for you to create separate budgets for for internal hours (staff time) and external costs (out-of-pocket expenses).

6. Make it adaptable based on your audience.

“The potential readers of a business plan are a varied bunch, ranging from bankers and venture capitalists to employees,” states Entrepreneur. Although this is a diverse group, it is a finite one. And each type of reader does have certain typical interests. If you know these interests up-front, you can be sure to take them into account when preparing a plan for that particular audience.”

For example, bankers will be more interested in balance sheets and cash-flow statements, while venture capitalists will be looking at the basic business concept and your management team. The manager on your team, however, will be using the plan to “remind themselves of objectives.”

Because of this, make sure that your plan can be modified depending on the audience reading your plan. However, keep these alterations limited from one plan to another. This means that when sharing financial projections, you should keep that data the same across the board.

7. Explain why you care.

Whether you’re sharing your plan with an investor, customer or team member, your plan needs to show that you’re passionate and dedicated, and you actually care about your business and the plan. You could discuss the mistakes that you've learned, list the problems that you’re hoping to solve, describe your values, and establish what makes you stand out from the competition.

When I started my payments company, I set out to conquer the world. I wanted to change the way payments were made and make it easier for anyone, anywhere in the world to pay anyone with few to no fees. I explained why I wanted to build this. My passion shows through everything I do.

By explaining why you care about your business you create an emotional connection with others so that they’ll support your organization going forward.