Image commercially licensed from Unsplash

In order to make your business dreams a reality, you should draft a detailed business plan. Despite this logic, many small business owners struggle to articulate their business goals and plans of action. That’s where a business plan comes in.

By creating a business plan and regularly updating it, you can periodically step back from the minutiae of running your company and refocus on the big picture. Getting started is easy if you follow the right steps. Identify what you know and then research what you don’t. It may surprise you how much you already know about your business, industry, customers, and competitors.

What Is a Business Plan?

Creating a business plan may seem daunting, but it’s actually fairly straightforward. As a clear description of your business’s future, a business plan outlines your organization’s mission and how you intend to accomplish it. You can make it as short and plain — or as long and detailed — as you wish.

“Business plans serve a number of vital functions,” explains Asker A Ahmed, Director of iProcess Global Research. “As a business owner, they help you set goals and map out how you’ll reach them. Furthermore, they can include your go-to-market strategy, so you can be prepared for contingencies.” 

Perhaps the most significant benefit of business plans is that they can assist small businesses in securing funding from investors. A business plan describes step-by-step how a business intends to succeed, giving investors valuable insight into how and where their capital will be used and how their investments will contribute to the organization’s success. As a result, they’ll be able to calculate the potential ROI of their investment.

Why Write a Business Plan?

There are a number of ways in which a clear business plan can be beneficial to your company. Your business plan serves as the basis for all future decisions and can be easily adapted as your company’s needs change. Here are several reasons why a business plan is important for your organization:

• You’ll define your business goals and vision: Whether your business is still in the pre-launch phase or simply needs some guidance for continued growth, a business plan will provide you with a detailed structure that will help you achieve your next goals in the future.
• You can draw investors, lenders, and business partners: A well-written business plan is essential for securing funding. Marcus Hutsen, Business Development Manager of Patriot Coolers says, “Future investors will be more confident in your business when they can see your goals and projections on paper rather than by word of mouth.” In this regard, your business plan can be used to persuade potential financial partners to participate in your venture.
• You’ll make better, more informed business decisions: With a business plan, you’ll be able to make more objective decisions to help your company succeed. You will also be able to use your business plan to make decisions about how to run and structure your business.
• You can properly allocate resources: Include all the resources available to your company in your business plan, in order of importance, along with a brief explanation of how you intend to use them. The purpose of a certain resource for your business should be clearly stated, such as recruiting, marketing, office equipment, and other necessities.
• Measuring progress and tracking results is easier: Even though your business plan should be flexible, you will still be able to see when milestones are approaching or where you are at risk of failing. Tracking your company’s progress with a written plan makes it easier to adjust goals as needed and see which processes are working.

How To Write a Business Plan

So, what is the best way to begin writing your own business plan? Here is a helpful, step-by-step guide for developing a business plan from start to finish.

1. Research and Analyze Your Overall Market

Andrew Chen, Chief Product Officer of Videeo tells us, “First, analyze your market. Consider your customers, your industry, and the market as a whole. Ask yourself: who are your ideal clients, what do they want, and how do you reach them?” 

If you haven’t already created your customer persona, do so now before you start writing your business plan. Consider any trends in the industry that could influence your or your competitors’ operations, as well as those that might drive market demand.

2. Draft an Executive Summary 

The executive summary should be the first page of your business plan. “Think of it like an elevator pitch, in which you should provide a high-level summary of your company and encourage reviewers to keep reading,” suggests Shelley Hancock, Chief Beauty Officer of Shelley Hancock Consulting. “Make sure you include a mission statement, a description of your products or services, and an overview of your financial plans.” After you’ve completed your business plan, review this section to make sure you’ve included everything you intend to.

3. Describe Your Company

Explain who your business will serve and what problems it will solve in your company description. Derek Flanzraich, Founder and CEO of Ness emphasizes, “Let your potential customers know what makes your company different from competitors, like a prime location, proprietary technology, or highly trained staff.” Give logistical information, including the registered name and address of your business, the structure of your business, and the ownership percentages and responsibilities of each owner.

4. List Out Your Business Goals

Outline the specific short- and long-term goals of your business in a few sentences. A statement like this should be written in the form of an assertion (“We will …”). Be as specific as you can, and don’t be afraid to dream big. 

“Setting smart business goals helps you navigate the twists and turns along the way,” explains Leroy Hite, Founder and CEO of Cutting Edge Firewood, a company that specializes in different types of firewood. “While your business plan and vision statement describes your business and what you want to accomplish, short-term and long-term goals describe how you’ll get there.”

5. Define Your Products or Services

Although your products and services will be mentioned throughout the business plan, this section will describe them in more detail. Provide information on your products or services, who will use them, the product/service lifecycle, and your pricing structure so that they can be easily understood. It is also a good idea to include any upcoming products and services you plan to offer. 

Dominique Zimmermann, CEO & Head Designer at Bombshell Sportswear suggests, “Let your product speak for itself without using complicated industry jargon. Don’t be afraid to explain your business in layman’s terms, so someone who’s not familiar with it will understand and be excited about it.” People may need some basic background information if this is an area or industry they are unfamiliar with.

6. Outline Your Marketing and Sales Strategy

Provide a description of your current and future marketing and sales strategies, focusing on how and why they will help you attract and retain customers. Nabiha Akhtar, Founder and CEO of Lil Deenies says, “To frame this strategy, think of the four Ps of marketing. First, price your offerings. Second, the product (or service) you’re selling and what makes it distinct. Third, promotional strategies for selling your offerings. Lastly, the place where you will sell your product or service.”

7. Define Your Operations and Management Structure

The operations and management plan describes how the business functions on a continual basis. This plan will outline the organization’s operations, such as the responsibilities of the management team, the responsibilities of each division, and the capital and expense requirements associated with the business. 

Andrew Mavis, CEO of 98Strong explains, “Your operations plan is essentially your business’s manual of how things work. This provides insight into how your business operates. In addition, investors can assess your credibility, understand your operations, and predict your financial requirements.”

8. Determine Your Financial Projections

“If you want to use your business plan to secure funding, this is one of the most important sections,” says Alex Song, VP of Finance at Ramp, a company that offers their own corporate card for businesses. “The goal is to demonstrate to investors how your company will generate enough profits to repay a loan or provide a solid return on investment.” Provide your current financial statements, including balance sheets, cash flow statements, and income statements. Assuming that funding has been approved, you can project future sales, expenses, and profits.

The Bottom Line

By following the tips and guide above, you can craft a business plan you’ll be proud to share with investors and partners. As soon as you’ve completed your market research, draft an executive summary, describe your company, and outline your business goals as a framework. After that, you can decide what you’ll make or provide for your customers. Your final step will be to determine realistic financial projections and determine how you will promote your business.

Engage your audience, whoever they may be, and use concise language to convey your business’s intentions. Your business plan can be used and updated as your business grows once you’ve incorporated feedback from trusted sources.