Don’t know how to write a business plan? Here is everything you need to know and what to include to create a solid plan!
1What to know first
Before writing your business plan, there are a few things you should know about first.
For starters, you should know your audience. If your startup will operate in a niche space, you wouldn’t want to use complex language or jargon no one would understand. You may be talking with investors or lenders who don’t have specific knowledge about your industry.
Furthermore, think about the length of the business plan. It’s best to keep your plan as short as possible, though your reader or audience may want to see even more details. Others would rather just see the high-level and crucial information.
That said, you wouldn’t want to go overboard and write a 50-page business plan!
2What’s your format?
There are two ways to write a business plan, which is:
- The traditional route, the most common one, which you will most likely use. This contains more details and is used for most scenarios.
- Lean startup plans are one-pagers, detailing the startup at the highest level. This is best for businesses that are expected to change quickly or are on a short timeline.
For this article, we will share how to write a start-up business plan.
3Writing the executive summary
This is your introduction and the hook, showing people why they should believe in your startup. Sell your business, explaining why it’s important. It’s best to supplement this with a summary of your plan and the operating model, though don’t go beyond 1-2 pages.
Include your business name, its background, address, key employees, and the list of products and services you plan to offer.
4The business description
This is where you go into full detail about your startup. What are the opportunities your business will capitalize on? What is the target market and how do you stand out from competitors?
Highlight what sets your startup apart from everyone else’s.
5Market research and competitive analysis
Startups and all other businesses need to do comprehensive analyses of the market it plans to enter. Describe the market and industry your business plans to operate in, highlighting opportunities to take advantage of. If you found any unique trends from your market research, show them here.
You should also show the competitive landscape, letting the reader know what the competition is doing great in and what their weaknesses are. Explain why you will move in this space and what weaknesses you can exploit in the industry.
How do you predict that the competitors will react and will you take their customers? If so, how? All of this should be explained in your plan.
We’ll be diving deep into the business’ tangible details, explaining how your startup will operate on a daily basis.
Talk about the legal structure of the business and include an organization’s chart if ever it has multiple stakeholders. Explain who is involved, their credentials, and how they’ll contribute to the startup.
7About your products and services
Discuss your product and/or service offerings. This area may be more expensive because this is a crucial part of the plan.
Describe your offerings and how it stands out against similar ones. Explain how it is priced and how it will play in the market when compared to the competition.
In here, you should explain your marketing and/or promotion plans. Identify the target market and show how you can make the market aware of your offering.
Furthermore, include the message you’ll want to promote and how it resonates with your offering and target market. Answer the question, ‘how will your startup build awareness while retaining brand loyalty?’
8Raise the capital
If a prospective lender or investor will read this, include a section about your fund request. Be clear about how much you need and why. This part needs to be as detailed as possible since you won’t want to ask for a huge amount of money without a plan.
Besides explaining where the finds will be used, state your startup’s projected return on investment.
9Financial analysis and projections
It won’t matter if you have a fund request, you still need to have a financial analysis in your plan. This part should show how it will grow in the future. For existing startups looking to expand, also include the business’ past performance here.
For businesses that have been operating already, show your stability through the finances. For new startups that haven’t profited yet, be realistic and clear with the projections. You can use images and charts to make this easier to understand.
Research the industry norms and find out how comparable businesses performed. Include any cash flow statements, balance sheets, and income statements, if possible.
When you show the financial outlook, project the vision out over 5 years or so. State the logic behind such projections, and you may tie this back to the fund request if needed.
And lastly, for those who have other remaining pieces of information that couldn’t fit in the plan organically, such as licenses, charts, or patents, you can include this in the appendix.
Take note that this is NOT a document dump and that all information going here is used to support your business plan.
Wrapping It Up
Refer to this guide on writing a business plan to help set you and your startup for success. Good luck!