A business plan can make or break a startup or established company. A well-thought-out plan lays out a clear path for the future, forces you to consider the viability of a business idea, and can help you gain a better understanding of your company's finances and competitors.
A business plan usually lasts three to five years and lays out all of your goals and how you plan to achieve them. "If you're applying for a loan or looking for investors, a business plan shows you're prepared and have thoroughly vetted your business idea," says Craig Allen, a financial advisor who teaches business plan writing classes at Southern New Hampshire University. As the old adage goes, failing to plan is planning to fail. In fact, there is now a wealth of information available on the impact of a written business plan, especially for small and growing businesses.
I'll walk you through everything you need to know about writing a successful business plan and bringing your idea to life. If you're short on time, here's a rundown of the ten steps to writing a business plan:
1. Construct an executive summary.
2. Prepare a company description.
3. Market Research and Potential in Brief
4. Conduct a competitive analysis.
5. Describe your product or service in a few words.
6. Create a marketing and sales plan.
7. Organize your company's finances
8. Describe your company's structure and management.
9. Describe your funding request in detail
10. Create a document appendix for official documents.
But, first and foremost, let's get this over with.
What is a Business Plan?
A business plan is a comprehensive road map for your small business's growth and development.
It expresses who you are, what you want to achieve, and how you plan to get there.
It also helps with talent and investor recruitment.
However, a business concept or idea is not the same as a business plan.
Why do you need a business plan?
Because the majority of venture capitalists (VCs) and all banking institutions will not invest in a startup or small business unless it has a solid written plan, a business plan is required. A business plan not only keeps you focused on concrete objectives, but it also assures others that you've thought things through.
In 2018, Bplans, an entrepreneurial resource centre, teamed up with the University of Oregon to gather and analyse research on the advantages of business planning. Here's what they found out:
· Businesses with a business plan grow 30% faster than those without one.
· Owners who have a business plan are twice as likely as those who do not to expand, obtain investments, or obtain loans.
· Entrepreneurs with a business plan have a 129 percent higher chance of progressing past the startup stage and a 260 percent higher chance of progressing from "idea" to "new business."
Step-By-Step Process to Write a Business Plan
Begin by sketching out a clear picture of your plan's target audience. Is this a room full of angel investors? Is your local bank home to a venture capital division? Is it you, your bosses, and your workers?
By identifying your target audience, you can determine the language you'll use to present your ideas, as well as the level of detail you'll need to provide to help readers conduct due diligence.
Let's take a look at the top ten elements of your business plan. The following is a step-by-step guide to writing a business plan:
Create an Executive Summary
Despite the fact that it appears first in the plan, write your executive summary last so that you can condense key ideas from the other nine sections. Consider it a placeholder for the time being.
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