Writing a business plan can be the most intimidating task, especially when a first-timer needs help figuring out where to start. If you’re not blessed with the magic of writing, a blank page can cause you twice the worry. However, it has a pretty straightforward approach. In this article, we will look at the key elements to include in your business plan and in what order.
Start with an executive summary
Although the executive summary is the first section your audience will see, it should be written last. Think about it this way- How can you summarize something you have yet to expound on? You might, but it will be less effective and take much longer to figure out.
Your executive summary is like the paragraph at the back of the novel. If it’s not compelling, it might not get picked up. If you’re pitching to an investor, you have to keep in mind that others are, too, in more numbers than you can estimate – and they are just as passionate.
For this reason, your executive summary needs to pack a punch. Start with your business concept. Briefly describe what your business concept is. What exactly do you do? What services or products do you offer, and most importantly, what separates you from the crowd? Is it your goal, mission or vision? Next, detail your target market and how you’ll reach them and turn them into loyal customers. Finally, get into the finances.
What do you currently have in your accounts? What are your short and long-term projections, and what investment do you need to get you to achieve your business goals?
Talk about your company
This is another opportunity for your business to stand out. Talk about the history of your business. Why did you start it? What gap did you notice that you wanted to bridge?
How did you see it, and what opportunities for profit did you find? What is your business structure? Are you a solo entrepreneur, or are you in a partnership? Do you have employees, and how many are there? You can also include your mission and vision proposition.
Carry out a market analysis
By the time you draft your business plan, you should have done your market research and analysis to give an objective overview of your position in the market. This section should cover the overall demand for your product and how you fit in the picture. Is the demand so high that your chances of successfully penetrating it are high, or is the game rigged in favor of the established brands? Who is your competition, and what is your competitive edge?
Your analysis should include the SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Do the strengths and Opportunities outweigh the Weaknesses and Threats? As optimistic and eager as you are, your analysis must be objective because it can destroy your chances of success. There indeed is such a thing as the right market at the wrong time.
Layout your management and organization structure
As I mentioned, you need to be clear about your business structure and model. Are you a solo entrepreneur, or is it a partnership? If so, are there any plans to change the structure? If you have employees, create a hierarchy diagram including roles and responsibilities.
Detail your products and services
This section is the main event, with the market analysis being the co-star. What are you selling? This is your chance to talk about your product and service in detail. What problem will it solve? If it is a product, under what category is it? Is it a one-time purchase, or will your target market keep returning? You can stick to brief outlines if you sell various products. If they’re few, with distinct differences, you can discuss each and what makes them unique.
The customer profile
This is your target audience. Hopefully, you’ve done all your research on whom you want to serve. You need to know your target audience like the back of your hand. It would be best to accurately understand their current and projected spending habits. If you serve a wide selection of people, you should segment them for more accurate and targeted marketing.
For an effective business plan, you can segment your buyers according to age, sex, income bracket, employment status, spending habits, geographical location, opinions and belief systems, level of education, preferred technology/ mode of communication, etc.
Define your marketing plan
Now that you know who your customers are and under which category they fall, you can tailor your marketing strategy across the different segments. A standard marketing plan typically falls under the 4 P’s: Product, Price, Promotion, and Place.
Product – What is the USP of your product?
Price– Are you pricing your product in a way that appeals to your target market? For instance, you can opt for price leadership. With this strategy, you price products considerably cheaper than your competitors so that buyers have no choice but to buy them. Also, you can make it a luxurious and overpriced product whose exclusivity makes it appealing.
Promotion– What is your plan to get your product in the face of buyers?
Place– Where will you find your typical buyer?
Lay out your logistics and operation strategy
This section is about the mechanisms you have or will have to ensure your product gets to buyers. Where is production done? Where do you source your raw materials? Are they sourced locally? Are you involved in the production process, or does your business rely on dropshipping? Will you need physical offices and any other equipment for your workspace?
Who is responsible for inventory, and how often is it done? If you are preparing this plan for potential investors, it is crucial that you showcase a keen understanding of all the workflows. Also, you have to be a step ahead by having contingency plans for each of these workflows.
Prepare your financial plan
Businesses can only take off with a solid financial plan. Moreover, investors will only inject money into a company that has its finances in order. This section explains every financial aspect of your business plan, past, current and future. Before you can get more money, you need to show that you are excellent at spending, managing, and multiplying it. Prepare all the standard documents like income statement, cash-flow statement, balance sheet and budget.
This way, you will inspire trust in your potential investors. Follow these steps and carry out due diligence. I can guarantee that the target audience for your business plan won’t tell the difference between your plan and one written by a seasoned business plan writer.
Gerald Ainomugisha is a freelance Content Solutions Provider (CSP) offering both content and copy writing services for businesses of all kinds, especially in the niches of management, marketing and technology.