How to Create a Business Plan

The early days of setting up your business are some of the most exciting. Everything is ahead of you, and all your ideas are fresh and front of mind. You’ve got the passion and the vision, now you need the planning.

A business plan is a blueprint for how you’ll start, run and grow your business. It gathers and organizes all your ambitions, and helps you prepare for the journey by taking a good look at what’s needed.

There’s no one-size-fits-all approach for a business plan. Some companies follow a standard formula, while others pick and mix the elements to create something that feels truer to their brand and ambitions.

Why create a business plan?

To get the most from doing this, there are a few things to consider before you jump into the writing. The first is: why do it at all? And the answer lies in who you’re creating the business plan for. In most cases it’s a document for you and your partners or employees, helping you focus, prioritize and plan — it’s there to keep you on track for growth. It can also be for potential investors, acting as a funding pitch.

With these two audiences in mind, your business plan is designed to:

  • Explain your goals for the next 1 to 3 years and how you’ll achieve them
  • Prioritize and shed unnecessary resource, energy and ideas early on
  • Create a benchmark for you and others to follow
  • Raise investment
  • Attract new people to your management team

What to include in your business plan

With a clear idea of purpose, it’s time to start writing. We’ve created a basic framework to help you get started. You can then build out more complexity and add sections as your vision develops in the coming months.

Executive summary

The executive summary is a high level description of your business and how you’re going to accomplish your goals. As the opener to your business plan, it should create a memorable first impression. All the points you make in subsequent sections follow on from this one, so you may find yourself revisiting it more than once.

What to include:
  • A brief, attention-grabbing summary of key points from the following sections.

Business description

If a stranger asked you to describe your business on the spot, what would you say? The business description is the section that deals with the core questions about what your business is, how it’s run and what it does.

What to include:
  • Company name
  • Business structure
  • Location
  • The goods or services you offer
  • A brief summary of your audience and competition
  • Your mission statement

Market analysis

This is the section that clearly identifies your target market: who you’re going after and why. What you’re really trying to prove is that nobody can fill the gap in the market better than you. As an analysis, it’s necessary to do some research into the market and potential customers to justify your explanations.

What to include:
  • A detailed persona of your target customer
  • An explanation of how your products or services meet their needs
  • An outline of your plans to respond to current and future demand

Competitor analysis

This section reveals the challenges your competitors pose and outlines how you’ll thrive in the market next to them. As with the market analysis, include solid facts that back up every claim you make. The more you know about your competitors, the stronger you’ll be able to contend.

What to include:
  • What markets your competitors are in
  • What benefits they offer
  • Why people buy from them
  • A detailed analysis of what they sell and for how much
  • Your competitive advantage (how you intend to successfully compete)

Service and product line

This section details the type of services or products you plan to offer in detail.

What to include:
  • A list (with descriptions) of your current and future products/services and ranges
  • Details on any copyrights, development and manufacturing

Operations and management plan

This section looks at your plan to get off the ground and manage day-to-day operations while keeping a healthy bottom line.

What to include:
  • A description of your facilities and equipment
  • Your employee structure and training plan
  • Inventory requirements
  • Supplier relationships
  • The costs of these and how you plan to cover them

Financial considerations

This section analyzes the capital needed to get you off the ground and keep you afloat. It’s one of the most detail-focused sections of the business plan. Depending on how early you are in the setup of your business, you’ll have more or less to include.

What to include:
  • Startup costs
  • Running costs
  • Details of any existing capital
  • A break-even analysis
  • Sales forecasts
  • Balance sheets
  • Cash flow statements

Funding request

Most small businesses need a bit of a financial boost during their early years, and this section pitches for that funding. It’s important to get the numbers right to maintain your integrity and win trust from banks or investors. Tweak this section each time you approach a financial source to keep it relevant.

What to include:
  • A recap on your business (be sure to pick out the most lucrative points)
  • A summary of your existing financial situation
  • How much funding you need and why
  • How the funding will be used
  • How you plan to pay the money back and when

A few final tips

When you’ve finally digested everything above and feel ready to tackle your business plan, follow these final best practice pointers:

  • Use succinct and straightforward language
  • Limit the length to 15 to 25 sheets of A4
  • Break the plan down into clear sections
  • Make the formatting slick and legible
  • Include graphs, tables and other relevant visuals

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