How To Write A Business Plan - 16 Proven Checkpoints
On the way to start your own business? Wait, there is something to check out before implementing an idea. Here is a guide to write a perfect business plan and simulate your idea.
The central question that pops up in the mind of any beginner thinking of starting a business is how to write a business plan?
There are few checkpoints that you must not miss while developing a business plan. This article would guide you through those checkpoints, which are potential pillars for the strategy and planning of a successful business. It will give you and your investors an idea about your market, revenue, targets, and future growth.
“The best business plans are straightforward documents that spell out the who, what, where, why, and how much.”
1. Market Study:
Before framing any business plan, the first thing is to know the market that your business will target. There are factors like Market Size, Consumer expectation, Demography of the Market, Money in the Market, Present & Future Potential.
An in-depth market study can provide insight into a wide range of aspects that affect your business, such as:
- Where your target audiences and potential clients do their product or service research
- Which of your competitors got hold of your target audience for information, options, or purchases
- Trends in your industry and what your buyers are looking for
- Nature of the market and what are those challenges that a business may face.
- Sources and things that influence purchases and conversions among your target audience
2. Revenue Model
The revenue model of any business plan is the decisive factor for the future of any company. This section defines whether the company can generate enough profit through the business to keep it flourishing and give profits to its investors. The investor decides to invest in any company keeping this part as their uttermost priority.
Initially, business ideas with low investment and high profit are preferable because they bear the low risk and give more profits to expand your business and explore new ideas with more significant investments. It doesn’t matter how great and innovative your business plan is because, in the end, people or investors would like to work with any business if it has a foreseeable future and profitable financial strategy and management. Some examples of components in the revenue model are direct sales, memberships fees, and selling advertising space. So, keep in mind that how much money your business can make out of a business plan is what matters the most in the end.
3. Competition Intensity
There must be a deep analysis of competition and industry before coming up with your product or service. You can’t enter into any market having a cut-throat competition with a common idea. That will only lead to failure because there are already plenty of players in the market to serve the purpose.
4. Customer’s Perspective
You cannot rate your product or service based on only your perspective because that may put investors and your business into the well of uncertainty and doubt. Therefore, always build a business plan from the customer’s perspective. It is one of the best things you can put in while writing a business plan.
5. Acknowledge Challenges
This segment of a business plan is to foresee and acknowledge future challenges that your business will face in the future.
While forming a business plan outline, there should be a visionary viewpoint because that is the primary basis that could help in sudden blows or challenges to the business.
6. Marketing Plan
Your business plan should have a sound marketing plan. This part plays a decisive role in introducing and promoting what your business has to serve in the market.
Marketing Strategy plan includes:
- Money that you would spend on advertisement.
- The medium you would opt for promotion.
- What sets you apart in the market that you would advertise.
- Build strategies to target a market specific to your niche.
7. Team that Wins
The core team is the main asset that decides the success rate of any business. Almost every investor looks upon the portfolio and performance of core team members. So, it is essential to build a strong team for your business that connects with your idea and would work for it tirelessly with enthusiasm.
The idea must be realistic and based on actual raw data rather than assumptions and false hopes. A data-driven plan can work perfectly on the ground. Investors or any Accelerator won’t consider your idea until it is data-driven and realistic as they are the first to catch such anomaly in your business idea.
9. Products and Services
It is always better to have a blueprint or prototype of your product or service included in your business plan. That clears the doubts and gives a clear picture of how it will work to serve the purpose. Also, you could have reviews and reactions of your customer market based on MVP(Minimum Viable Product) built on the blueprint. That could let you know what improvements need to be made in product development before full-fledged launching.
Tag Line is a way to describe the theme of any company or business in short and most attractive words possible. They are like the first impression in the mind of the customer or market. So, come up with a unique and most attractive tagline that would set you apart as a brand.
Some of the examples are:
- Nike – “Just Do it”
- Apple – “Think Different”
- L’Oreal – “Because you’re worth it”
MasterCard – “There are some things money can’t buy. For everything else, there’s MasterCard”
11. Unique Essence
Your idea should have uniqueness and an out-of-the-box theme to counter the competition and create your own identity as a company. Every investor craves a unique essence in a budding business because that could bring out a shift in the market towards your brand as uniqueness sets you apart from what is there for a long time
12. Mission & Targets
A man with a mission and purpose always gets the job done no matter what it takes. Therefore you must define your mission and time-bound targets for the business. Targets and missions give a purpose to your business to push its potential more and more. It would be best if you instilled excitement in every team member with the grandeur of your mission.
13. Business Structure
The biggest hurdle in creating a business plan is making a sound structure for implementing your business idea. Therefore, it is essential to make a well-laid business structure. This section consists of an organizational layout which includes:
- Departments: There are many departments in any business for handling the different workloads. What is the expertise of each department, and how do they work in coordination?
- Key Members: Mention your critical members’ resume, achievements, and contributions with their respective roles.
- Manufacturers: Mention manufacturing units and your partners, if any, that are involved in the manufacturing process.
- Suppliers: Mention from where you will source raw material and other requirements in production.
- Sales and Delivery: Through what means you would reach the market or your customers. Mention if there are third parties involved in the process of sales and delivery.
- Infrastructure: Every business needs infrastructure like offices, production units, R&D labs, etc., which needs to be mentioned.
- Logistics & Operation: Logistics and operations are the workflows you’ll implement to make your ideas a reality. If you’re writing a business plan for your planning purposes, this is still an important section to consider, even though you might not need to include the same level of detail as if you were seeking investment.
14. Funds Usage
You must mention details about funds requirement for your business idea. How and when you would use those funds in your business should be clear. There are many aspects of implementing any business idea like manufacturing, & R&D, management, expansion, marketing, and sales that require funds. You must evaluate all of this in your business plan.
15. Future Plans & Forecast
This section of the business plan includes the forecast for monthly sales, annual turnover, production costs, future expansion, future products, and services. You need to gain a profound understanding of your market, industry trends, norms, potential investment, and future innovation to master the art of making flawless forecasts and frame plans. Forecasts and plans give you and your investors clarity about business expectations and how to anticipate and act on upcoming challenges.
16. Executive Summary
The Executive Summary is the final compiled version of your business plan. This part should leave a mark on whoever skims over it and make them believe in your idea.
There are few points you must focus on while framing the Executive Summary:
- Blueprint of products and services along with reviews.
- Customer Problems that your business can solve.
- Profit-making revenue strategy.
- Objectives and Strategies that make you stand out in the market.
- Size and potential of your niche market.
- A comprehensive assessment for the viability of a business idea (including factors like competition and your competitive advantage)
- Future expansion plans and innovations.
- Investment required in funding stages.
The business plan model for your startup idea should be optimistic, reasonable, convincing, and realistic in approach.
Many business ideas are just paper horses until we test and review them in realistic conditions and pass them through all checkpoints mentioned above. Therefore, writing a business plan is the accurate simulation test of your idea, preventing you from wasting money and time on a non-realistic and unviable idea.
The business plan is the outlook of your business on paper which is a must-do-thing to get investors, suppliers, and partners on board to work on your idea willingly with excitement and surety. The ultimate goal is to make sense of your idea and prepare an outline of how to implement and achieve the desired goal by setting everything right as it is meant to be for a successful business.