In this step-by-step guide, I will tell you what to do at each stage of writing a business plan to help you achieve your goals.
Whether you want to raise money for your business or develop a strategic growth plan, a sound business plan is an essential component of any successful business.
3 rules for creating a business plan:
1. Keep it short.
Business plans should be short and concise.
There are two reasons for this:
First, you may want your business plan read (and no one can read a 100-page or even 40-page work plan).
Second, the tool your business plan uses to run your business is something you need to keep using and improve over time. A very long written business plan means that your plan will fall into the drawer of the table and will never be reviewed.
2. Know who your audience is.
Write the plan in a language your audience can understand.
For example, if your company develops a complex scientific process, but your potential investors are not scientists and they do not understand all the detailed scientific terms you want to use
Explain your product in a simple and straightforward way. You can always use the appendix to your plan to provide more detailed information.
3. Don't be afraid.
Most entrepreneurs and business owners are not business professionals. Like you, they are learning as they enter the field, and in business they do not have a degree.
Creating a business plan can seem like a daunting task, but it can't be. If you know your business and are passionate about it, write a business plan and then apply your growth plan, I think it will not be as difficult as you think.
And you don't have to start with a detailed business plan that I want to go into detail here. In fact, it can be much easier to start with a simple, one-page business plan, that is, write an initial plan and then come back and create a detailed business plan.
6 things to include in the business plan and their sections
Follow the rules for writing a business plan, let's dive into the details of planning.
The rest of this article outlines what you need to include in your business plan, what you need to go through, important components of all important financial forecasts, and features related to the additional resources you can plan.
Remember, your work plan is not just a homework assignment, but a tool to help you build a good business. Good business plans are a document that you learn more about your customers, sales and marketing tactics, and a document that you regularly come back and update on whether your budget and forecasts are right or wrong. Your plan sets the goals you want to achieve, and you need to keep track of the results you have achieved and use them to change the way you go.
1. General information
This is an overview of your business and plans. This will be the first in your plan and will only be one or two pages long. Most people write this at the end.
This section answers the following questions: What are you actually selling and what problem (or “demand”) do you solve for the market? Who is the target market and competition?
Want to take the opportunity and turn it into a business? This section covers your marketing and sales plan, operations, and how to measure success.
4. Team and company
Investors are looking for great ideas as well as great communities. Use this section to rate your existing team and who you are hiring. If you have already started and are working, give a brief overview of your legal structure, location and history.
5. Financial plans
The financial forecast (assumptions) of your business plan are not complete. We will tell you what to include in your financial plan.
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Let's take a closer look at the details of each section of your business plan and create what investors and lenders want to learn.
1. General information
The management summary introduces your company, explains what you are doing, and defines what you expect from the person reading. Structurally, this is the first part of your business plan. And while it's the first thing people start reading, I usually recommend writing it at the end. What for? Because you know all the details of your case, you are now ready to write your final conclusion. After all, this section is a summary of everything, so start by writing the Opportunity section first, and come back here at the end.
Ideally, a brief overview should be an independent document that contains important parts of your detailed plan. In fact, it is very common for investors to ask only a brief overview when evaluating your business. If they like what the executive sees in the conclusion, they will often ask for a complete plan, a fake presentation, and other information about your work.
Your executive summary is an important part of your business plan because you want to make sure it is as clear and concise as possible. You will cover key aspects of your business, but you will not have much information. Ideally, your summary, which is often one or two pages long, should be read quickly, gain interest, and encourage investors to learn more about your plan.
Important parts of the winner's final decision:
An overview in one sentence
At the top of the page, under your business name, include a sentence about your business that summarizes the essence of what you are doing.
This may be your company's motto, but it is often more effective if it describes what your company is doing. This can be your price offer and is common.
Summarize one or two sentences of the problem you are solving in the market. Each job is to solve problems for its customers and meet the needs of the market.
This is your product or service. What is the solution to the problem identified in the market?
Who is your ideal customer? How many of them are there? It is very important that this thing is clearly written here.
If you have a shoe company, you can't aim for "everyone" because everyone has feet. You will usually identify a specific market segment, such as “running sneakers”. This will help you target your marketing and sales efforts and attract potential buyers from you.
How is your target market solving their problems today? Are there alternatives or replacements in the market?
Every business has some form of competition, and it is very important to provide an overview of your performance.
Briefly describe your team and the fact that you and your team were the right people to market your ideas.
Investors pay a lot of attention to the community, even more than that - because even a great idea needs a lot of implementation to become a reality.
Ideal with a chart that outlines the main aspects of your financial plan, such as planned sales, expenses, and profits.
If the business model (i.e., "how to make money") needs additional description, this is where you can do it.
If you want to raise money to start or grow your business, then you need to include details of what you need.
Do not be afraid to include potential investment terms, as they are always negotiated. Instead, make a brief statement of how much you need to spend to get a job.
Commitment and procurement
The last element of the executive conclusion that investors want to see you is the commitments you have made and the future steps you want to take. It's a good idea to emphasize that your potential customers are already showing interest or potential in your product or service.
If you write an internal business plan that is only a strategic guide for your company, you can intentionally (or greatly reduce) the executive summary. In this case, you can distribute it with the management team, funding requirements, and purchase details, and instead consider the company’s strategic directions. To do this, make sure all team members are on the same page.
The opportunity section of your business plan is where the real essence of your plan lies.
This will explain in detail the problem you are solving, your solution, to whom you plan to sell, and how your product or service will fit into the existing competitive location. You will also use this part of your business plan to demonstrate what sets you apart from others and how you plan to expand your offerings in the future.
The person reading your plan will quickly learn a little about your work, as they will read your record. However, this chapter is still very important, as you can expand your initial title, provide additional details, and add a couple of problems and solutions that you did not include in the execution summary.
Start this section by describing the problem you are solving for your customers. What is their headache? How are they solving their problems today? Solutions to your client's problems may be too expensive or difficult to solve. For a well-located business, there are probably no solutions available within the average range.
Solving a problem that you solve for your customers is the most important element of your business plan and is critical to the success of your business. If you can't identify problems with your potential customers, then you may not have a growing business concept.
The biggest step in the business planning process to ensure that you solve real problems for your potential customers is to stay away from your computer and really reach out to potential customers. Confirm that they have a problem that they think they have, and then you can take the next step to solve their problem. Does your solution suit them well?
Once you have described your target market problem, you need to describe your solutions in the next part of your business plan. Your decision is the product or service you plan to offer to your customers. In this section, you should describe your solution in detail. What is it and how is it offered? How can you solve your customers ’problems?
You can describe usage for some products and services. In these usage cases, you can give examples of how customers work with your solution and how it improves the customer’s life
Now that you’ve outlined the problem and solution in your business plan, it’s time to focus your goal on the target market: who are you selling to?
Depending on the type of work you are starting and the type of plan you are writing, there is no need to go into too much information here. But no matter what, you need to know who your customers are and how many of them you have. This can be a warning sign if you do not have enough customers for your product or service.
If you are going to do a formal market analysis, you will need to do some research. This is necessary to identify your market segments and then determine how big each segment is. A market segment is a group of people (or other businesses) that you can potentially sell.
Don’t fall into the trap of labeling the market as ‘everyone’. The example above is a shoe company. While it’s hard to say that a shoe company’s target market is anyone with legs, they need to target a specific segment of the market in order to be successful. Perhaps they are targeting athletes or business people who need formal shoes for work, perhaps they are targeting children and their families.
TAM, SAM and SOM
A good business plan identifies target market segments and then provides some data to show how fast each segment is growing.
The following are quick definitions for TAM, SAM, SOM:
TAM: Total Available or Addressable Market - Your general or targeted market (anyone who wants to connect with your product)
SAM: Segmented Addressable Market or Served Available Market - Your Segmented Receiving Market or Your Assigned Market (you have the full target portion)
SOM: Share Of the Market- Your Market Share (achieving the reality you achieved in the early years of your business)
Once you have identified the key market segments, you need to discuss these market trends. Are they growing or shrinking? Talk about the evolving needs, moods and other changes in the market.
Once you have defined target market segments, it's time to determine the ideal customer for each segment.
Your ideal customer is a random representative of your market, often referred to as a “buyer” or “user”. Your customer should be identified by name, gender, income level, likes, dislikes, and more.
While this may seem like extra work at the top of the market segmentation you already have, having a regular customer can be a very useful tool to help you identify the types of marketing and sales activities that are evolving to attract these ideal customers.
Once your goal is to define the market, you need to define your competition. Who provides solutions to test and resolve your clients' pain points? What are your competitive advantages?
The most important thing that needs to be addressed in this part of your business plan is how your solution is different or better than other suggestions that potential customers might consider. Investors want to know what your competitive advantages are and how you plan to differentiate yourself.
One of the biggest mistakes entrepreneurs make in their business plans is to show that they have no competition.
The simple truth is that all businesses are competitive. Competitors may not always come in the form of “direct competition” when you become a competitor offering a solution similar to yours. Often, you can engage in “direct competition,” that is, when consumers solve their problems with a completely different kind of solution.
For example, when Henry Ford first sold cars, there was very little competition from other automakers. Instead, Ford competed with other vehicles, including horses, bicycles, trains, and pedestrians. On the surface, none of these things look like direct competition, but how they were supposed to solve the transportation problems of the time.
Future products and services
All entrepreneurs know where they want to do business in the future if they are successful.
Even if you like to spend a lot of time exploring future opportunities for new products and services, you don’t need to expand too much in your business plan on these ideas. should not be specified or is not possible. Your focus is on bringing the first products and services to market.
Once you've described your opportunities, you'll know how your business works. You will learn about marketing and sales plans, operations, how to measure success, and the key steps you want to take.
Marketing and sales
In the marketing and sales plan section of your business plan, write down how you plan to reach your target market segments, how you plan to sell to those target markets, what your pricing plan is, and what activities and types of partnerships you need to have for your business success.
Before you think about writing your marketing plan, clearly define your target market and it should be tailored to the personality of your customer. Without a real understanding of who you are marketing to, a marketing plan is not considered very valuable.
The first part of your marketing plan is how you position your company and your product or service offer. How you test and position your company to your customers. Do you offer cheap prices in the market or do you offer bonuses or rewards to customers, do you offer a luxury brand product? Are you offering something that your competitors don’t offer?
Before you start working on your behavioral statement, it will take some time to evaluate the current market and answer the following questions:
• What features and benefits do you offer that your competitors do not offer?
• What are the main needs and desires of your customers?
• How do your competitors position themselves?
• How do you plan to differentiate yourself from the competition? In other words, why should a customer prefer you to others?
• Where do you see other solutions for your company?
Once you have answered these questions, you can work on your location strategy and define it in your business plan.
Don’t worry about making the location statement too long or deep. You need to explain that your company is in a competitive position and that your main offer is something that sets your company apart from the alternatives that the customer might consider.
Once you know what your overall placement strategy is, you can move on to pricing.
Price sends a very strong message to consumers and can be an important tool for conveying your address to consumers. If you offer an additional charge for a product, the premium price will send a message to consumers immediately.
Deciding on your price may be more like an art than a science, but here are some rules to follow:
Cost recovery. There are exceptions to this, but often you need to charge more money from your customers to deliver your product or service.
Pricing of primary and secondary profit center. Your starting price may not be your main focus. For example, you can sell your product at a lower price, but you will need to use services that are profitable for you other than the buyer.
Adjusting the market ratio. Your prices should be in line with consumer demand and expectations. If the price is too high, there may be no buyer. If the prices are too low, people may underestimate your offer (just like low quality).
3 approaches to pricing strategy
Cost plus pricing. You can set your prices based on several factors. You can look at your expenses and mark your offers from there. This is commonly referred to as ‘cost plus price’ and it is important for manufacturers to cover the initial costs.
Market-based pricing. Another method is to study the current state of competitors and then the price based on market prices. You can sell at high or low prices to determine your location.
Valuation pricing. Another method is the “value pricing” model, which determines the price based on how much it costs your customer. For example, if you are offering lawns for very busy people to relax, you can save your customers 1 hour / week. If that time is priced at $ 50 per hour, your service may charge $ 30 / hour.
It's time to see your advertising strategy, considering pricing and placement. The advertising plan provides information about your prospects and how you plan to communicate with your customers. Remember, you need to take into account how much money your ad will cost and how much profit you will make. Unnecessary advertising programs are difficult to maintain in the long run.
Here are some places you can consider as part of your advertising plan:
If you are selling a product, the packaging of the product is very important. If you have images in your product, including those in your business plan, that's a good idea. Make sure the packaging department of your plan answers the following questions:
Does your product match your package placement strategy?
How does your product compare to your competitors?
A business plan should consider the types of advertising you plan to spend money on. Do you advertise online? Or in the traditional media? An important component of your advertising plan is to calculate how successful this ad will bring you.
Providing yourself with open media can be a great way to reach your customers. A clear review of your product or service can give you the impact you need to grow your business. If your public relations is part of your advertising strategy, detail your plans here
Today, most business owners use social media.
You don't have to be on every social networking channel, but you should choose a site that has a lot of potential customers. For example, social networks such as facebook.oddnoklasniki are well developed in Uzbekistan.
As part of your marketing plan, you can work closely with another company in the form of a partnership.
This partnership provides access to the target market segment for the company by allowing them to offer a new product or service to your partner.
If you have a partnership, it is important to describe the partnership in more detail in your business plan.
How does your operations business work? Logistics, technology and other small details. Depending on the type of work you are starting, you may or may not need the following sections. Just enter what you need and remove everything else.
Use and execution of resources
If your company buys a product from other vendors, it is important to include details about where your product came from, the product being delivered to you, and how to deliver the product to the customer.
If your business is delivering to customers, you need to describe your shipping plan.
If you are a technology company, it is important to describe your technology in a business plan.
you don’t need to outline your trade secrets in your business plan, but you do need to describe how your technology is better than other and other solutions. At the highest level, you want to describe how your technology works. You don't have to go into details here, although if the investor needs more information, you can provide a separate document.
Remember, your goal is to keep your business plan as short as possible, so too much detail here can make your plan too long.
For product companies, a distribution plan is an important part of a complete business plan. In many cases, service companies can skip this part and move on.
Distribution is how you deliver your product to your customers. Each industry has different distribution channels.
Here are some common distribution models you can think of for your business:
Selling directly to consumers is the simplest and most profitable option.
You may want to consider selling directly to your customers, or you may increase your revenue limit. You will need to logize how you buy your product from your own product, but the direct distribution model is usually very simple.
Most large companies are reluctant to trade with each of the thousands of retailers individually.
Instead, they prefer to sell wholesale to large distribution channels. Retailers can buy from distribution companies. Of course, this takes a share of the sales that go through the distributors' warehouses.
Manufacturer's representatives or agents
They are usually salespeople who work for an “advertising” agency. They usually have relationships with retailers and distributors and try to sell your products to the appropriate channel. They usually make money depending on the number of products sold.
OEM (original equipment manufacturer)
It means "manufacturer of original equipment". If you sell your product to another company, and they add your product to their product and produce a new product, you are using an OEM channel.
A good example of this is car parts suppliers. Although major automakers build large parts of their vehicles, they purchase common parts from third-party vendors and add these parts to the finished vehicle.
Most companies use distribution channels as part of their plans, so don't think that you should limit yourself to one channel. For example, it is very common to sell both directly and to distributors. You can buy an iPhone directly from Apple or go to the target store and buy from there.
Key periods and measurements
A plan is just an unfulfilled document written on paper, and has tables, defined roles, and key responsibilities.
While the key stages and measurements section of your business plan may not be long, it is important for your business to take the time to move forward and plan the next important steps. Investors want to see you realize your plans and understand what you need to do because you are working on a specific schedule.
Take a quick look at your early stages. Key periods are planned for your main purposes For example, if you are manufacturing a medical device, you will have steps related to clinical trials and government approval processes. If you are manufacturing a consumer product, you may have stages related to finding the first model, manufacturers, and receiving the first order.
Investors want to call this “traction”. What this means is that your company has provided evidence of your initial success. Agility can be initial sales, a successful pilot program, or an important partnership. Proving that your company has the evidence that you can succeed, not just ideas, is crucial to turning the money you need to grow your business.
In addition to the main period and traction, your business plan should detail the key metrics that see your business rise from the ground up. Metrics are the numbers you watch regularly to check the health of your business. They are the drivers of growth for your business model and financial plan.
For example, a restaurant may focus on the average number of tables per day and the ratio of food sales to beverage sales. An online software company may consider new registration numbers. In my example, tracking the number of people visiting my site is my metric. Every business has important metrics to track growth and early tracking, and your business plan should detail the key metrics to follow in your business.
Key expectations and risks
Finally, your business plan should detail the key assumptions that are important to the success of your business.
Another way to think about key assumptions is to think about risk. What are the risks with your business? For example, if you don't have a proven demand for a new product, you assume that people won't be able to buy the product you're making. If you rely on online advertising as an important advertising channel, you will make assumptions about the cost of that ad and the percentage of advertising viewers who actually make the purchase.
Knowing what your expectations are as you start your business can make the difference between business success and business failure. When you know your assumptions, try to prove that your assumptions are correct. The lower your expectations, the more likely you are to succeed.
4. Team and company
In this section, you will learn about the composition of your company and who the key team members are. These details are very important to investors because they want to know who is behind the company and if they can turn a good idea into a big business.
Some investors prefer to work with a responsible team, even if the idea is not great, rather than investing in a team that is lagging behind with a good idea.
This means that starting a successful business requires a lot of work. Do you have the right team to turn a good idea into a big business?
The management team section of your business plan is the best place for you to have the right team to implement your idea. In the management team section, you can think about your important roles and responsibilities for the growth and success of your business.
The leader of the regular management team provides a brief biography of each team member with their relevant experience and knowledge. Here it is important to work on why the team was the right team to make the idea a reality. Do they have the right industry experience? Did the team members have any entrepreneurial achievements before?
The management team does not have to be complete to create a complete business plan. If you know there are gaps in the managerial team, everything is in place. In fact, investors will see that you know the key people you lack as a sign of maturity and knowledge to make your business successful. If there are gaps in your team, identify them and indicate that you are looking for specific people to fill specific roles.
5. Financial plan
And last but not least, the headline made you read this article. This is often one of the most feared things for entrepreneurs, but it doesn't have to be intimidating. For many beginners, business financing is less complicated than you think, and is not necessarily required to make a solid financial forecast of the business level. That is, there are many tools and resources that can help you create a solid money plan if you need extra help.
Typically, a financial plan has monthly forecasts for the first 12 months and annual forecasts for the remaining 3-5 years. Three-year forecasts are usually sufficient, but some investors require a five-year forecast.
The following is a summary of the financial statements you need to include in your business plan and what should be included in each section.
Your sales forecast is simply an estimate of how much you plan to sell over the next few years.
The sales forecast is usually divided into several groups, one for each major product or service you offer. Don't make the mistake of incorporating your sales forecast into careful details. Only focus on high goals at this point.
For example, if you own a restaurant, you can include these groups: lunch, dinner, and drinks. If you own a product company, you can make your forecast in target market segments or key product categories.
Your forecast also includes assigning a suitable group to each sales group to cover the cost of goods sold. These groups indicate the cost of producing or delivering the product. These groups should include only the costs directly attributable to the production of the product, not the regular business costs, such as rent, insurance, wages, etc. . For restaurants, these ingredients can be costly. This may be the cost of the raw material for the product company. Paper and other presentation materials can be expensive in the consulting business
Your employee plan shows how much you pay your employees. For a small company, you can assign each position to each position and how much you are paid each month. For a large company, a staffing plan is usually divided into functional groups such as marketing and sales.
Profit and loss statement
This report is a place where your numbers are grouped together to show if you can make a profit or lose. The F&Z report includes your sales forecast and your staff plan, as well as a list of all other expenses related to the performance of your business. separated from income.
This section is not required for your business plan at all. Here you can write legitimate notes, spreadsheets, tariffs, product pictures or your very special feelings.