Hello, my lady hustler. Do you have a business plan?
Today, we bring a much-asked theme on our blog: how to create a business plan?
A business plan is literally a plan of your business, and it has the goal to have your idea explained to investors and even to yourself. Go deeper into your vision and craft every step based on your values and purpose.
It’s not mandatory that you craft a business plan for your company, but it’s very recommended, since it allows you to study more on your niche, product/service, and it also helps with information management.
In this article, we’re explaining to you, in an easy way, how you can create your business plan with less stress possible.
A startup’s journey is made up of many parts. In the early stages of business, it is critical that you understand the viability of your business idea. You must be able to establish a unique selling proposition (USP) and choose your business model. Once you have laid out this groundwork, it’s time to create a business plan.
Let’s go to the fist topic:
What is a business plan?
A business plan acts as a blueprint for your startup. This document provides you with a glimpse into the future of your small business. A business plan helps evaluate the feasibility of the startup from an objective and critical standpoint. You may outline goals and milestones for the startup to work towards reaching and achieving. Additional details, including information about your products and a snapshot of the startup’s finances, may be noted in a business plan.
#1: Choose your tool
Before you do anything else, choose the tool you want to use to craft your business plan. Some people do on a plane Word document, others do in a PowerPoint presentation, some do on Canva.
What happens by the time you’re done drafting a business plan? You should have a document that guides you towards a common vision for the startup. It should also set the stage for attracting investors. More details about that in a bit.
What goes into a business plan?
Drafting a business plan, if you have never done it before, may feel like a complicated, time-consuming process. However, it is actually quite simple. Business plans follow a formula that includes the following eight sections:
- Executive summary
- Business description, concept, and strategy
- Industry analysis
- Market Analysis
- Organization and management
- Financial projections
- Financing request
#2: study, a lot
Now that you read the session part, you may realize that creating a business plan is no easy job. It definitely requires a lot of studies, commitment, and some time invested in looking at your business and understanding it.
One of the biggest mistakes you can make is to create your business plan without actual data, just basing yourself on “what you think” or on “an idea you have”. You need data, you need studies. Do the work.
#3: write your sessions
Now that you chose your tool, you’re actually ready to start. This is the part when you’ll divide your business plan into sessions and start writing each of them.
Each business plan has different sessions, but there are some who are basics. Read below what a summary on a business plan looks like:
1. Executive summary
This is where you introduce and pitch your small business. An executive summary is brief, often no longer than two pages. It answers the following questions.
- Who are you?
- What is your business and what does it do?
- What industry is your business in?
- Where are you located or plan to be located?
- When will you start conducting business? (If you are already conducting business, please note your start date.)
- How will the business make money?
- Why will consumers pay for your products and/or services?
2. Business description, concept, and strategy
Once you have a brief overview of the startup, you may begin to dig into the details surrounding your products and services. In this section, you may share where the idea for your business came from.
Talk about what your product and/or service does. What makes it unique and distinctive from similar offerings? If you are still developing the product, where are you at in the development stages? Finally, what are some of your goals? Do you have a timeline for reaching these goals? What do the steps look like towards achieving certain milestones?
3. Industry analysis
This section takes a deep dive into your industry. Who are your competitors, both direct and indirect? You should be able to study, and know, everything you can about the competition. This includes what their offerings are, their company background, and why consumers may choose your offerings instead of theirs. Consider competitor price points, for example, as part of industry analysis.
4. Market Analysis
Moving on from your competition, it’s time to look at your target audience. Who makes up your audience? You may develop personas to better understand the demographics you are trying to reach as well as their needs.
The competition session comes for you to study the people who already do what you do. Here, you need to analyze their weakness and their strength, see what you do differently of them, get into every aspect of why a client would choose them instead of you. It’s a very important part of your plan.
In addition to understanding your audience, you will need to analyze a specific strategy for this market. How will you attract, capture, and retain your target audience? Further, is this a growing market? Are there additional opportunities for growth?
5. Organization and management
Here you will share the roles of each employee in your business. If you are running your business as a solopreneur, you may share just your biography.
However, if you have hired employees — or plan to hire soon — you will need to share staff information. This includes names, titles, responsibilities, and their previous work backgrounds.
6. Financial projections
Let’s talk about money. More specifically, the current cash flow of your business. This section of your plan will likely consist of tables and charts. These will detail the financial aspects of your startup including the following.
- Cash flow statement
- Projected profits and losses
- Expenses budget
- Sales forecast
- Break-even analysis
- Balance sheet — for the next three years out, if possible
7. Financing request
Earlier I mentioned that a detailed business plan may attract investors to your business. Those that are interested in financing your startup will want to review your business plan.
Do you need funding from investors? You will need to include a section — a financing request — that outlines the amount of necessary capital. Be specific in the amount you need from an investor. Additionally, share the manner in which you intend to spend the money.
As you’re wrapping up your business plan, you may find you have leftover odds and ends. Where do you mention that you have letters of incorporation? What about a written partnership agreement? Where does that go?
The appendix is a handy space to keep these materials. You may also include additional items, like trademark registrations and industry studies, in an appendix.
Is it ever okay to go back and edit your business plan once you have a draft? Absolutely! Remember that you may always return to your business plan over time and make edits. Note the dates you were able to reach your goals. Set new milestones to reach and refer back to your business plan for extra guidance and support over time.
#4: actually use your business plan after is done
Imagine spending time, money, and energy creating a beautiful intricated plan, putting it at your drawer desk, and never using anymore?
Believe me or not, some entrepreneurs do that!
Even though your business plan is a bulky document, it needs to be at your sight constantly, so you know you’re doing the right actions and make the right decisions.
Whatever you do, don’t leave your plan alone. Use it and make it your guide.
These are the tips for you to create a business plan that is worthy of the hustler entrepreneur you are!
Just a reminder: a business plan is important, but remember also to be flexible when you deal with it. Sometimes things don’t go according to the plan, and that’s ok; business plans are not written in stone, they can also be adapted.
So, do you have your business plan yet? What was the hardest part to make? Share with us in the comment session, we’re looking forward to reading from you!