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Writing A Business Plan

Writing a business plan

 

Every business should start with a written plan, it should cover your business idea, your intended customers, financial aspects, competitors, marketing, and more. A stronger plan also includes supporting documentation, evidence and financial information.

 

Topics to be covered

 

  • Why is a business plan important?
  • How to create a business plan
  • Executive summary
  • Appendices
  • Business description

 

Why is a business plan important?

 

There are two primary reasons why a professional business plan is essentially:

 

  • To set out to your objectives and strategies in writing so you can take the business in a focused direction
  • Too persuasively pitch your business idea to financial lenders or investors

 

The plan is a compilation of the ins and outs of how you will officially run the business, which is useful guidance for you during the start-up period and first few years.

 

It shows potential financiers that you know what you’re doing and are a worthwhile investment

 

A comprehensive business plan will:

 

  • Detail the start-up process, which helps you focus and makes investors Or lenders confident and eager to support you.
  • Help you measure your progress and keep the business on track, as it covers your strategies, action plan, financial forecasts, and performance benchmarks
  • Demonstrate that you have a viable business idea and a clear understanding of your target market
  • cover how you’ll tackle potential risks and organize your priorities
  • Enable you to identify areas of weakness that may require further research or development
  • Explain how you intend to maintain the business momentum once it gets going
  • With a clear structure outlined in your plan, you can invest your time and organize the business efficiently to meet your objectives

 

How to create a business plan

 

Your business plan should explain how to expect the business to function and develop.

 

Use the following sections to structure your plan:

 

  • Executive summary
  • business description
  • Marketing plan
  • operations plan
  • Financial plan
  • Appendices

 

You may want to rearrange the order as you see fit, but the executive summary is always first and the appendix is always last.

 

This module looks at the executive summary, appendices, and business description, while the remaining sections covered in their own modules later in the course.

 

How to create a business plan

 

You need to write your business plan clearly to ensure that you can follow the information when referring back to it at a later date and to appear reliable, informed, and professional to potential investors.

 

When writing a business plan:

 

  • Be concise and clear. Avoid rambling, complex sentences, and too much technical jargon. Consider hiring a professional writer or proof-reader to check it for you. They can flag up areas that need clarifying or further.
  • Focus on key details and support them with research and data.
  • Include an appendix, where people who want in depth information can find additional materials (such as financial documents, market research, product literature, etc)
  • Structure it clearly. Use page numbers, paragraphs, headings, bullet points, and visual aids were relevant. Also include a contents page for easy navigation
  • Also keep in mind the following when writing your plan:
  • Use a professional tone and style. You can inject personality where it’s important to reflect your brand, but for the most part keep the tone neutral and format.
  • Avoid being over optimistic. Your plan should focus on realistic forecasts and take risks into account
  • Carry out a swot analysis. During the production of each section of your plan, identify and list the businesses strengths, weaknesses, objectives, and threats in that area. Use this information to investigate any shortcomings and to emphasize how certain aspects of your plan and existing skills will benefit the business.

 

You should also:

 

  • Keep the plan open to change. As the business grows, you may tweak your strategies or objectives, while economic, social logical, and technological changes can impact on the business structure. When these types of changes occur, you need to amend the business
  • Consider including a summary of your contingency plan. You may include your whole contingency plan in the business plan so everything is in one central location. However, if you don’t include the contingency plan in full, you should summarize it to demonstrate that you have considered what will happen should the business fail.
  • Consider having the plan in another form, such as a presentation. You should be able to verbalize a summary of each section to persuade investors to read your full plan.
  • It takes time to create a business plan, but it’s valuable investment of your time. Ensure your business has a clear sense of direction and is prepared to handle challenges.

 

 

 

Executive summary

 

The executive summary is a brief overview of the purpose and goals of your business. It introduces the key points contained within the rest of the plan.

 

An executive summary gives readers a sample of what your business plan contains to persuade them to read the rest.

 

Potential financial lenders may not read the whole plan unless your executive summary is convincing. For that reason, it is one of the most crucial sections of the plan.

 

The executive summary is the last part you’ll write, as it summarizes key points from every other section.

 

Your mission statement

Your business idea

Your target market

The business model

Financial requirements and forecasts

Your products and/or services

Key members of the business

Growth potential

Marketing and sales strategies

How your business will defer from the competition

 

The executive summary it should be scannable and inviting to read.

 

Keep paragraphs of short, sentences concise, and jargon and data to a minimum. Make use of bullet points to emphasize key points.

 

It should not be longer than 10% of the whole document and ideally no more than a page or two

 

If it’s any longer, you risk losing the readers interest and your business plan may lack focus.

 

If your business plan is, in part, designed to persuade potential lenders to support your business, your executive summary needs to outline how much money you require and how you will use it.

 

The plan should also include a graph of projected sales for the first 3 to 5 years to show you have considered costs and income thoroughly.

 

Once you’ve provided a basic rundown of your business objectives and financial forecasts, list the start-up costs of the business and what you need a loan or investment to fund.

 

Detailed planning and calculation shows you have the financial knowledge to efficiently run a business, which will gain the confidence Financial lenders.

 

Appendices

 

In the appendices, include any supplementary details that support the rest of the business plan.

 

For example

 

Charts, graphs, or tables that provide further information Detailed results of your Market research Blueprints, product illustrations, or product packaging samples Letters of support from future customers CVs or potential employees Brochures and advertising materials Maps and photos of locations List of assets available as collateral for a loan Lists of equipment owned or to be purchased Copies of leases and contracts

 

Remember that the appendices is the last section of your plan and should run for no more than a few pages. Avoid using it as a means of including extra information that you want to share.

 

Business description

 

A business description covers your business idea, structure, and objectives for the short and long term.

 

The description explains the key aspects of your plan that will ensure the success of your business, such as what makes your products or services high quality and how your build customer loyalty.

 

Potential investors are interested to know how you make your proposed business fit in the current market and how it will stand out from competitors, so including a business description early on is essential.

 

By writing out your business description clearly, you will remain focused on your goals during decision – making processes, particularly during the start-up. Without a written plan to follow, the first few months could be overwhelming.

 

Your business description should cover:

 

  • What industry your business will operate in
  • The products and or services your business plans to sell and how they will perform alongside your competitors
  • The legal structure of the business How You intend your business to operate.
  • What will an average day looks like?
  • What hours will you work?
  • Who will you acquire your stock from?
  • Will any activities we outsourced?
  • How you’ll appeal to your target market.
  • What are their needs and how will you fulfil them?
  • The strengths of your plan, such as industry experience you have, a good location, and any interest or orders you’ve already gained Your sales targets.
  • The finances section of your plan will include more detail, but do include some basic projections in the business description to show you’re aware of how you’ll scale the business early on.

 

Your business description must demonstrate an awareness of your chosen industry and how your business will fit in it.

 

Describe how you will improve areas of weakness that are currently present in the industry and how you will utilize opportunities in the market to grow a successful business.

 

An Understanding of your market is what makes or breaks the longevity of your business. Certain industries constantly evolve and, as the population ages and trends come and go, the wants and needs of customers can change.

 

If you create a plan knowing that you have to be receptive to the industry shifting around you, you’ll be able to make informed, reactive decisions that ensure the business has long-term stability.

 

Summary

 

In this section of the course you have learned that

 

  • Your business plan sets out your objectives and strategies. It gives your business focus and helps you picked your business idea to financiers and investors
  • Your business plan should contain an executive summary, business description, marketing plan, operations plan, financial plan, and appendices.
  • When writing a plan, be concise and clear, focus on key details, use a professional tone and style, avoid being over optimistic, and keep it open to change.
  • The executive summary is a preview of your business plan. It should be scannable, inviting, and have a mission statement.
  • A business description should cover your objectives, products and or services, how you will appeal to your target market, and your strengths.