A business plan is the first document I ask every entrepreneur to compile to give credence to their business idea. It is the blueprint of your business, without which you and other stakeholders might lose sight of what you need to do to take your idea and make it into a profitable functioning business. In fact, if done right, it becomes the ultimate tool for you to gauge whether your idea is worth all the trouble.
In 2019, new business development will become a bigger challenge for businesses starting out. Not only do you need an innovative idea to succeed in the coming years, but you also need to ensure it is feasible before you invest any resources in it. If it does turn out to be a great idea, executing it as fast, and as smoothly, as possible can be the difference between winning a hefty market share and missing the opportunity of a lifetime.
This is where business plan writing comes in, and this is what I will talk to you about today:
- What are the benefits of writing a business plan? And
- What makes your business plan a tool for sustained success?
Why Write a Business Plan at All?
- Litmus Testing Your Business Idea: Not every business idea is a feasible one. You might get overwhelmed by how clever you sound mulling an idea over in your head, but writing a business plan is how you learn whether it is worth following through or not.
You might discover during any stage of the process that your idea is not practical. This realization might disappoint you in the short term, but it will also save you from heartbreak and losses down the line when you realize that your idea is not feasible.
- Executing Your Idea Smoothly: If you are sure your business idea is going to be a hit, your business plan will further help you execute it without getting stuck dealing with foreseeable problems. While writing the document, you will be able to predict the major hurdles awaiting you and thus build viable contingencies for the path ahead. This is just one way your business plan will iron out the wrinkles in the execution of your business idea.
- Adding Appeal: If you can write a great business plan for your idea, it will work as the introduction to your business. In the age of alternative finance, angel investors and organizations interested in financing viable ideas in any given industry are always looking for the next big idea. With your business plan ready, you have a detailed document in hand to share with any interested parties without any delay. This way, your business plan will add to the appeal of your idea and help interested investors get all the information they need to make a decision in one neatly written report.
- Securing Necessary Funds: If you seek financing from conventional sources, such as banks, you will need to supply a detailed business plan with your application. The success of your loan application will depend highly on the depth and viability of your plan. With good business plan writing, you can secure the financial help you need to get going with your new company.
Every successful business owner may have their own reason for writing a business plan but all of them write one. Think about what you want to achieve from your business plan and start working on it without delay.
Key Elements of a Successful Business Plan
A killer business plan always has a set of key components that make it a success and help you drive the benefits you were aiming to extract out of the exercise. Every one of these components helps establish an important aspect of your business idea.
Together, they provide the reader with all the information they might need to understand your idea and determine how well-prepared you are.
This is what it looks like:
- EXECUTIVE SUMMARY: This is the first section of the business plan, but smart business plan writers always craft it after the rest of the report. This is a one-page comprehensive summary of your business plan with highlights of your market analyses, product descriptions, business objectives, and execution plan.
With the executive summary, your reader will determine if they like your idea enough to read the rest of the document or not. Therefore, it needs to be crafted carefully with a lot of appeals without any misleading statements.
- MISSION STATEMENT: Speaking of statements to be made in the report, good business plan writing demands that you include your business mission statement in the document. Your business mission is a combination of a clear vision you have in mind for your new business and how you are going to achieve this vision.
You might also want to go ahead and include a short list of core values that you want your teams and company to focus on while delivering services to your customers. With your vision and mission statements (and core business values), a potential investor will have a better idea of why you started the business and decide whether they want to work with you or not.
- PRODUCT DESCRIPTION: This is where you provide a neat and detailed description of what you want to bring to the market. This could be a product, a service, a combination of both, or even multiple series of the two.
This is where you can show your reader all the great features your product/service will offer your customers. Highlight the value that your offering brings to the table and what makes it different from your competitors.
- MARKET ANALYSIS: Now that your reader knows what your product/service is about, you have to give them a detailed analysis of your target market and demonstrate how your product/service fills a gap and satisfies an unsatisfied need present among your target audience.
Use solid research for this section and provide sufficient data to convince your reader of the existence of this need.
- EXECUTION TIMELINE: You will also need to include a detailed timeline of all the major steps you are going to take while establishing your new business. This information includes the application of marketing plans, developing your workplace, manufacturing of the product, and much more.
This information is often included as a Gantt chart or depicted similarly in a tabular format.
- MARKETING PLAN: Description of your marketing plan includes all the important details of the marketing efforts you want to employ for your new company. Good business plan writing requires you to give a lot of thought to what kind of marketing campaigns will be effective for positioning your product/service where you want it. Include in sufficient detail what kind of promotional activities you will focus on and why.
- FINANCIAL PLAN: Similarly, you need to provide your reader with a complete outline of how you mean to finance the business and what your projected expenses will be in the initial years of business. You must demonstrate income projections for the coming years neatly in tabular form.
You will also need to provide calculations for equity distribution and demonstrate when you expect to reach breakeven and become profitable.
- OPERATIONS DETAILS: Your reader would also like to know how you plan to run your operations. In this section, you will need to talk about organizational structure, your human resource needs, and other such requirements.
While you may want to add a few more sections in your business plan, depending on how much information you want to share with your reader, these sections make up for a standard and effective business plan that should work fine for most industries these days.
Clarity is the Foundation of Effective Business Plan Writing
It really is that simple. While working on your business plan, the most important thing for you should be the clarity of your report. It should be structured well and written in paragraphs that flow smoothly and connect appropriately.
Think about it: The idea behind writing this business plan is to describe an abstract business idea to your reader so well that they feel compelled to become a part of the expedition. You are definitely going to need all the clarity you can muster.
This is why you should spend a few days researching data for the various sections of the document and write multiple drafts before wrapping up the exercise.
Why Professional Business Plan Writing is the Way to Go
Obviously, business plan writing is not for everybody. It is an extraordinary type of writing that requires the perfect balance between thorough data-centered research and compelling writing. You want to sell your idea for its uniqueness and value, while at the same time show that it can be run as a viable business.
This is a key reason why many entrepreneurs find it worth their while to hire professional business plan writers for the job, and so should you.