Let’s face it, business plans aren’t the sexiest topic in the world. Most people don’t read them (at least not all). And if you are interested in the topic, perhaps it is only because they asked you when opening your startup.
Yet these entrepreneurial design documents are vital to any successful business, so thoroughly designing them is crucial. This is a very important step not only to attract potential investors but also and above all to know what you will have to do once the business is started.
If you know the right steps to take, you are more likely to see your loan application accepted, but above all, you can start off on the right foot and minimize the chances of failure. If, on the other hand, you go randomly, it is very likely that you will not make it.
That’s why I decided to help you by showing you how to write a successful business plan in this strategic guide.
What is a Business Plan
A good business plan is, by definition, a document that serves as a guide or roadmap for any business owner. This is a business project that provides an overview of what your company will be like when it starts and a roadmap of where you will go in the future, step by step.
It collects general information and financial projections to help you identify the resources and tools needed to get to your destination.
The business plan is your guide to action, which helps you achieve your goals, and is essential for both a new business and an already established one. Its purpose is to create a vision for your business that is both realistic and inspiring.
What it is for and why it matters
A business plan is about understanding your business and creating an action plan for its future. Without it, you cannot tell if you are making progress or not. In addition, without an accurate picture of your company and the industry in which you operate, you cannot make informed decisions and be successful.
Especially without this planning, you will not be able.
- Execute a realistic marketing strategy.
- Plan the growth in each of the phases of the business activity
- Have a clear idea of the risks and threats you will face by exposing yourself to the market, thanks to a SWOT analysis
- correctly identify one ‘s strengths and weaknesses and set up a growth strategy
- recognize and seize the opportunities you will find along the way
- plan corporate strategic choices
- understand how to achieve the set goals
- identify the critical factors for business success
- reach the predetermined market share
- Understanding the activity numbers will be in the first months of life and consequently having a financial forecast suitable for making you survive in the first periods, the hardest ones.
According to a statistic from the Journal of Management Study, the companies that produce a business plan are growing:
- 30% more of those who don’t
- 71% faster
Who is the expert who creates business plans?
I often get a question: Who can help me make a business plan? Who do I turn to prepare it?
Let’s spend two words introducing a fundamental concept. Only one person can and must carry out the project plan for his company: the entrepreneur who wants to start it.
In fact, it is the entrepreneur who must know perfectly the numbers and characteristics of his target market, if he wants to hope to be successful.
Of course, he doesn’t necessarily have to do everything himself. The entrepreneur can use specialized professionals or marketing experts who can help him draft an exemplary business plan model.
You can get help from our best business plan writers. They will prepare you an exceptional business plan that will help you to grow rapidly.
How to make a business plan
This document consists of a more or less long series of contents, depending on the objective you intend to pursue. However, in most cases, you will always find a certain thread, which starts from the analysis of your business idea, proceeds by examining the target market in which you want to operate, and then delves into the marketing and production strategies.
Let’s see how to set up a good job step by step.
1 – Index
Typically, the business plan begins with the index, a short list of all the points covered below. It is the first thing that is read, but the last that is written.
So, make sure you only complete it after you have written all the following steps.
2 – Executive summary
The executive summary is a short, typically one-page summary of the entire document; as such, it is written last along with the summary.
The purpose of the executive summary is to provide a quick overview of the business plan. Therefore, it should be a clear and concise overview where you tell your reader why you are writing this document – the purpose of the analysis and the goals of the future company.
The executive summary must therefore contain a brief overview:
- of the founder and his previous experiences
- of the idea of the company
- of the business idea
- of the sector
- company objectives
- of any financing
- of the development guidelines
- of any external professional figures
- competition and how we want to differentiate ourselves from it
- The main strengths and weaknesses of the company
- The main opportunities for the company
- A brief overview of the management team
- Some prudential estimates that make it clear what numbers of turnover and profits it can reach
The executive summary is the first and last opportunity you will have to impress the reader. If you fail to grab the investor’s attention on one page, he will certainly not read the entire document.
So, make sure you plan its content correctly.
3 – Description of the company
This section describes your company in detail and is sometimes referred to as a “business concept.” Therefore, it should include everything you need to convince the reader that your business idea will be successful.
You must describe the business, the market, the competition, and the technology behind it in a way understandable to both technical and non-technical people.
The best thing is to use the classic concepts of mission and vision so that in a few words, it is possible to understand the company’s mission.
You must also explain why people want to use your product or service. This can be done by highlighting your competitive advantages over your competitors.
You can continue by explaining your short, medium, and long-term goals and why you want to achieve those.
It is important not to promise too much. It will be easy to get too excited and make too many promises when you are excited about your business idea. But remember that the business plan does not need to understand exactly how much money you will make if you are successful but how much you will lose if you fail.
4 – Description of the product or service
This part is where you describe the content of your business idea.
It is the most important part of the plan and should take up most of the document space. You should start with a short introduction and give information about your product or service. The introduction should be short, clear, and straight to the point.
You should also include consumer benefits by stating:
- How will your product help your potential customers?
- What problem does it solve, or what desire does it satisfy?
- Is it unique?
- How does it work?
- How much will it cost?
- What is the competition? What are their products/services? How will they be different from yours?
You will need to list the technical characteristics of the product but also the individual benefits that each of these characteristics will produce in your customer’s life.
Make sure you include diagrams, graphics, and visual or multimedia details that allow the reader to understand without a doubt.
5 – Market analysis
In this section, you enter the market analysis part, where you analyze the target market for your product and how it will evolve in the future. This investigation is by far the most important part of planning a business.
It is like the diagnosis of a doctor, who then wants to work out a cure. Or like the inspection of a civil engineer, who has to determine if it is possible to build in a certain area.
The market analysis is, in turn, composed of various phases.
For more information you can contact business plan consultants.
The analysis of the sector
In particular, the sector analysis examines the market in which you compete to identify its characteristics, dimensions, and trends:
- What is the current state of the industry?
- Why is it in the state it is in today?
- Is it growing or decreasing?
- What new technologies have been developed?
- What are the potential risks for your business?
- What are the market trends?
- What are the main challenges for your business?
You will need to describe how your company fits into the current industry structure and how it intends to move within it.
Competitive analysis
Competitive analysis, also called competition analysis, is that part of the market analysis (itself part of the business plan) that should help you identify the most important competitors for your product or service.
It should allow you to compare your company’s strengths and weaknesses with your competitors. In this section, you will need to describe:
- Who are your competitors?
- What are their market shares?
- How does your product or service differ from that of your competitors?
- Which of your competitors will you try to beat?
- Which of your competitors don’t you intend to compete with?
- What is your competitive advantage?
- What are their short, medium and long-term plans?
- What are their strengths and weaknesses?
- Do they have a strong brand image?
- What are their growth plans?
- Do they have an expansion plan?
This section will help you understand what makes your product or service different from your competitors. You will be able to highlight your distinctive characteristics and focus on the success factors of your company. Because as you may know, your product must not be better than that of competitors but unique compared to others.
Or at least that’s what you need to communicate.
Identify your customers
This is the most important part of the business plan. Everything else is useless if you don’t know who you want to help. You will need to do the following: perform thorough market research to describe who your ideal customer is based on demographic and psychographic characteristics:
- his income
- her age
- his sex
- his ethnicity
- his level of education
- his professional position
- his interests
- and so on…
Describe how they will buy your product or service and how much they will pay.
- What do they expect from you?
- What drives them to buy your product or service?
- What are the reasons they don’t buy your product or service?
- How will you attract potential customers?
- How will you convince them to buy from you?
Answering all these questions is essential to identify your ideal customers, the ones you want to hit with your marketing messages and turn into loyal customers, ready to speak well about you and your company.
The marketing strategy
This section will describe your marketing strategy with which you want to approach your potential customers and convince them of the goodness of your solution. You will need to explain:
- What will your unique selling proposition be?
- What media will you use to advertise your product or service?
- What kind of advertising budget will you need
- What will your approach to advertising be?
- What are your budget for email marketing, PR, and other forms of public relations
- What are the long-term goals of customer loyalty
- What will the profit margins be
In the business plan, the marketing strategy is also called the ” Marketing plan. ” The main parts of the marketing strategy include the media plan, promotion, advertising, audience, customer acquisition strategies, and other marketing strategies useful for ensuring that the company can sell at a profit and increase its reputation.
6 – The operational plan
After examining the parts related to marketing comes the time of the operational plan: the section of the business plan where you will write how you intend to move. It is a hypothetical example of an implementation plan.
The first part of the operational plan should be devoted to the summary of your financial forecast, which is a summary of your income statement and your cash flow projection (more on that later). You will also need to describe how much you expect to spend over the next three years.
The second part should be devoted to explaining the organization chart of the company: who does what and what responsibilities each job will have.
The third part should contain the operational plan details: what your company will do and when it will do it.
The following parts may concern the production of your products (or the provision of services) and the after-sales service.
Here are some questions to ponder
The organizational structure
- Who are your employees?
- What kind of education will they have?
- What technical skills will they need to have?
- What are the key competencies and employees the company cannot function without?
- Will they work for your company?
- If so, where will they work?
- How much time will they spend on your company?
- How will you recruit and train new employees?
- What will the hiring plan be?
- How will you manage them?
- How will you motivate them?
- How will you supervise their activities?
- How will you monitor their performance?
- Who will be responsible for the management plan?
Production
- What will your production process be like?
- What machinery will you need?
- Who will supply you with the raw materials?
- What will the production processes be?
- Where will your products be manufactured?
- What insurances should I have in case of risks?
- What are the production limits under which you cannot go down in order not to crack your cost plan?
- What technological changes can you take advantage of to stand out?
- Where can you find the funds needed to purchase the machinery?
Distribution
- How will your products be distributed?
- What will you do with your excess capacity?
- How will your products be packaged?
- Will you sell your products through distributors?
- Will you have exhibition space in the points of sale?
- Will you sell your products by mail order?
- Will you use door-to-door selling?
- Will you use direct selling?
- Will you sell your products on the Internet?
After-sales assistance
- How will you handle customer service?
- What will you do if a problem is with one of your products or services?
- What will you do if your customers have problems?
- What will your working hours be?
- What will your prices be?
- What kind of discounts will you make?
- What kind of returns and guarantees will you offer?
- What will your quality assurance policy be?
7 – Financial Plan
The financial plan is the final part of the Business Plan. Inside you will create the financial statement necessary to predict the company’s future.
The budget is the most important financial forecast document and must always be considered. Show what you expect to spend over the period (usually a year) and what you expect to receive.
This will help you know if your plan is feasible and should indicate the revenue you anticipate, the costs incurred, profit margin, debt, and financial debt.
The balance sheet is, in turn, divided into three different documents: the income statement, the balance sheet, and the cash flow.
Income statement
The income statement, or profit and loss account, presents your company’s financial performance. It shows how much your company has made (revenue) and how much it has spent (costs).
Profit is the difference between income and costs. The operating margin shows how efficient your company is at making money.
The things you will need to consider in the income statement are:
- Sales: How much do you expect to sell over the period (typically one year)? If you don’t know, ask your customers or prospects.
- Cost of sales: How much will it cost to make the products? Include manufacturing, transportation, materials, insurance, wages, rent, running costs, etc.
- Gross margin: How much is the gross profit (sales – the cost of goods sold)
- Operational Expenses: The expenses that go into making your products. These include wages, rent, marketing, advertising, etc.
- Profit: The difference between total revenue and total costs. Your business has a profit margin if the margin is greater than zero.
- Financial Debt: The amount of money you owe to creditors. How many debts do you have? Including mortgage debt, loans from banks and financial institutions, etc.
- Inventories: How many stocks do you have? This is a very important part of the financial forecast. If you have a lot of inventory, you may need to consider how to reduce the amount of inventory.
- Taxes: How many taxes will you have to pay? Include income tax, corporation tax, and sales tax.
Balance sheet
The balance sheet in the business plan shows the investments (assets) and sources of financing (liabilities and equity) concerning a certain date. Understanding that a balance sheet is a snapshot over time is important. As a result, the total assets and liabilities on the balance sheet will change continuously.
Financial statements are a way to organize a company’s financial information and present it to the outside world.
Cash flow
A balance sheet with no cash flow (also called cash flow) makes no sense. The cash flow statement shows your company’s ability to generate cash. It will be the most important document of your financial forecast.
Cash flow should reflect your company’s performance within the next year. Shows how much money you will have available over the period.
- Revenue: How much money do you expect to receive from your customers?
- Expenses: How much money will you spend on labor, materials, rent, insurance, etc.? Depreciation and amortization: How much will keep your assets in good shape cost? Interest payments: How much interest will you pay on loans? What will the financial outgoings be and how will you be able to write them off?
- Taxes: How many taxes will you have to pay?
Remember, this is an estimate only, not a precise number. However, cash flow shows how much money you will have to invest in the company and how much your company will generate from its operations.
Business plan PDF example
Very well, if you have come this far, you will surely have understood how much information you need to collect and organize to create a business plan that is really of great help for your plans.
There is another thing, however, that I want to tell you: you do not necessarily have to be taxed. Although the structure I have presented to you is valid, complete, comprehensive, and useful in most markets, no rules are written in stone.
You will often find examples of very different business plans, depending on the market sector, the business model and the organization that prepares (or will examine) the business plan.
Questions about writing a business plan
How long does it take to make a business plan?
It depends on your business and the amount of detail you want to include. Most people create a plan in a few days or weeks at the latest, although it can take longer if you want to go into a lot of details. Generally, the more detailed the project, the more likely it is to do well and succeed.
How to conclude a business plan?
You can conclude your battle plan in many ways. The typical conclusion summarizes the most important ideas in a few lines. It is typical to conclude with the management team what you will do when you are in business.
How many pages should a business plan be?
Approximately the correct length is 30-50 pages, including financial data. But it can be more or less. What is important is the content, not the length. Remember to write an excellent Executive Summary that is compelling and interesting. Otherwise, it doesn’t matter how long or short your document is. If it doesn’t catch the reader’s attention, it won’t be seen by anyone!
Business Plan: how much does it cost?
How much does it cost to write a business plan? This is one of the most frequently asked questions by entrepreneurs. The answer is not very simple. The cost of preparing the documentation varies depending on the following factors:
- The type and size of the company
- The complexity of the business idea
- The format and graphic style
- The availability of the source document
- The number of revisions and changes
- The complexity of the financial model
- The level of depth
Conclusion
In conclusion, many things to consider when creating a business plan. First, you should consider what your company will do and when. This document will guide you in setting goals, making decisions, and ultimately avoiding mistakes that can undermine your success.
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