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Eight easy steps for writing a business plan
Eight easy steps for writing a business plan
Think that writing a business plan is a chore? That it has to be a hundred pages long? Well, it's not what you think! You don’t have to start from zero to create plan that’s up to snuff. Most financial institutions offer a model that you can personalize for your situation. Just follow the instructions and you’ll be surprised how quickly your plan will progress. While every business plan is unique, they all share certain common elements. Here's an overview of the main information you need to include.
- Prepare an executive summary
The first section of a good business plan should be written at the very end of the process. It’s the most important part of your plan—it’s what interested lenders will read first. Start things off with a presentation of the founders and a description of the company’s mission. Then present the salient points of each of the subsequent sections in order to explain the company’s basic activities. Use a tone that makes the reader want to read to the very end.
- Summarize your activities
Where is your company headed? What have you achieved since inception? What do you see as its next steps? Answer these questions with the details of your growth strategy. Often a numbered list of goals paired with a deadline is enough to enable the reader to grasp the situation at a glance. Two pages of well-organized explanation is all you need!
- Describe your marketing strategy
A rigorous market study is the cornerstone of an effective marketing strategy. The size of your target market, industry trends and distribution issues are subjects you need to cover. Give your product a central place in this section. Highlight its characteristics. What is your plan for effectively promoting your product? Use statistics to demonstrate how your product meets the needs of your target market and that your pricing is appropriate. You should also include your budget allocation for the project in this section.
- Create an operational plan
Your action plan shouldn’t only exist in your head. You should put in on paper so potential investors can evaluate your next steps. First provide details on your company’s day-to-day operation (opening hours, delivery agreements with providers, etc.). Cover your facilities, too: detail the square footage of your planned office space and any remodelling that needs to be done. In addition, justify your reasons for choosing a particular location.
- Draw up a competitive analysis
While your business’s prospects may look positive, nothing says you won't have to deal with sustainability issues in the future. A competitive analysis lets you take stock of the competition so you can see where you stand. Learn how to protect your economic castle in “4 Steps for a Successful Competitive Analysis.”
- Make room for human resources
Potential investors want to determine whether your team has the necessary skills and experience to guarantee your project’s success. Demonstrate this with an organization chart describing the responsibilities for key personnel and information on the training program employees will follow. If there are recruitment challenges to overcome, discuss them and then present the solutions you plan to put in place to resolve them.
- Explain your e-commerce strategy
Information technology is a must for reducing your operational costs and increasing profitability. Provide the details for your upcoming website launch or deploying your e-commerce platform. Finally, discuss the management information systems you will use to manage inventory, keep accounting records and provide optimal customer service.
- Share your financial forecast
The financial appendix facilitates the search for business partners and investors. A well-orchestrated financial plan should present the cost of your project and demonstrate its feasibility. It’s important to include a financial forecast for your company over the next three to five years. Pay special attention to forecasted revenue and estimated costs during your first year of operation.
There are other aspects that will likely interest your backers: the amount of financing you hope to obtain, the guarantee you can offer lenders and your desired methods for repaying the loan are a few examples. Don’t hesitate to ask for help from an accountant or other expert if this section seems particularly difficult to put together.