How to write a business plan in 9 steps

A business plan can help you map your future, whether you are just starting a business or already have one. A business plan can also be used to demonstrate why your business will succeed. Writing a business plan requires planning ahead, market research and financial research.

These are the sections you should include in your business planning:

1. 1.

The first page of your business plan organizes the rest of the plan and protects your business idea. The cover page contains important information about your business. An optional non-disclosure agreement (NDA), is required if someone attempts to steal your business idea, or use your plans. The table of contents organizes the entire business plan.

Cover Page

The cover page provides contact information about the owner and business. The cover page should include the business name and the person who created it. It should also contain your name, address, telephone number, and email address. You may also want to include the “company name” if your registered company name is different from the business name.

Non-disclosure agreement

confidentiality agreement is a legal document that protects business information. If you feel that someone could use your business plan to their advantage or disadvantage, then you’d want them to sign it.

 

See our services : Blockchain services, Backbase Vietnam

 

Fit Small Business provides a free non-disclosure agreement.

Table of Contents

The table of contents lists all sections and subsections in your business plan. The sections are defined as the following headers: Executive Summary, Business Objectives and Company Summary, Products and Services, and others. For additional organization, you can number the sections. For example, 1.0 refers to the executive summary, while 1.1 refers to the business objectives and 1.2 the mission statement.

2. 2. Executive Summary

An executive summary gives a brief overview of the business plan. It should not exceed one- to two pages. Investors may only request the executive summary. It should be informative, persuasive, concise, and a summary of your business plan. The executive summary should be completed last, following the completion of the other sections of the business plan. It is easier to see which sections in your business plan you should highlight by waiting to complete this section.

Consider the following in the opening paragraphs for the executive summary:

  • Description of your business: This is a similar pitch that you would give to potential clients for a 30-second description of your business and its unique characteristics.
  • Products & Services: Mention what products or services you offer customers, and the costs.
  • Competitors Briefly explain your top competitors and why you will succeed in spite of them.
  • Management and organization Talk about the background of the owners and highlight how it will benefit the business. If necessary, also discuss the management structure of the business.
  • Business location (or building): Discuss the benefits of the area and the potential impact on the success of your business.
  • Your ideal customers and target market: Identify who your ideal customers and explain why they will purchase your products and services.
  • Financial projections and data: Give brief financial information and projections that are relevant to your business. These include startup costs, profitability in the next month, and sales projections.
  • Financing required: End the first paragraph with a description of the sources of startup financing and the amount being requested.

You can combine the bullets to create several paragraphs. You can also add or delete sections depending on the needs of your business. If you don’t have an address, then remove it. However, if your business has a website, add two to three sentences to your online strategy. Keep the executive summary (including the three headers) to no more than two pages.

Business Objectives

Your business objections should be specific and achievable goals for you business. Examples of business objectives include “Attract 80 customers per day in the first year of business” and “Generate a positive revenue stream from operations with at minimum 15% net profit to sales.” At least four business goals should be organized in bullet points.

/how-to-create-custom-sales-order-grid-in-magento-2

shopify-inventory-management-app

improving-your-mobile-pos-optimization

everything-you-need-to-know-about-purchase-order-numbers

top-4-stockroom-ideas

bigcommerce-pos-invoice-management

Mission Statement

The mission statements describe the purpose, goals, and values for your business. It is usually a brief statement, usually between one and several sentences. Your mission statement may change as your business grows.

Airbnb, for example, has a mission statement that states “To live in a world where you can feel like home anywhere, not in a house, but where you belong.” Outback Steakhouse, on the other hand, says “We’re the leader in the pack by emphasizing consistent high-quality delicious food and delivering warm, welcoming environments.” We offer generous portions at moderately affordable prices. It’s almost like you’re in the Australian Outback.

Keys to Success

The key to your success is the unique advantages you have. If your business’s location is an advantage, then you need to be more specific. You should describe the key features that make your location a success factor, such as its visibility, parking spaces, drive-thru or proximity to housing. You may find similar keys to success in your competitors’ businesses.

Competitive advantages are not the same as keys to success. This is because your competition cannot duplicate your competitive advantage. It’s a unique advantage, or proprietary information such as a patent. You can add the competitive advantage as a key to your success. As bullet points, list two to three key factors to success.

3. Summary of the Company

If you are already in business, the company summary section will highlight your company’s successes or explain why you think it will succeed. The opening paragraph (or several paragraphs) should include information about your business, such as its location, owners, hours and products.

Startup Summary (or Company history)

This section will be different depending on whether you are a startup business or an established one. Startups will talk about the costs and steps required to open a business. This includes permits, build-outs and rent. A well-established business will discuss its financial performance in the last three years.

Startup Funding Table

A chart listing all items to be purchased with capital is a good idea if you are writing a business plan. If you plan to purchase equipment using additional funding, list every piece of equipment along with its associated cost. The total expenses should be shown at the bottom of your chart. This amount should correspond to the requested funding.

This startup cost table for a pizza restaurant separates startup expenses from startup assets.

Location & Facilities

Description of brick-and-mortar locations or facilities, such as warehouses, is required. Describe the location and its benefits. Write about the area, ownership and leases, as well as the square footage. Give a brief description of the local population.

Ownership of a company

Briefly describe the background of each member of the company’s ownership. The information you provide will help to show why the owners are likely be successful in running this business. This includes details such as previous employers, education and awards won. The management section and the organization section will provide more information about this owner.

Competitive Advantage

Your competitive advantage is the unique thing your company does that others cannot. This is the key to your company’s success. Investors are searching for competitive advantages such as data, patents, technology, data and industry relationships. If you don’t possess these, then describe what your business does better than its competitors. This could include quality of products or services, relationships with vendors, marketing strategies, and so on.

/advantages-of-pos-for-magento/

ecommerce-integrated-pos-omnichannel/

/ultimate-guide-retail-pos/

/facebook-marketing-tips/

/how-can-pos-system-on-shopify-support-retail-cash-management/

/4-tips-to-run-o2o-business-on-magento/

4. Products & Services

Because it is based on the products and services your business sells, the products and services section has the greatest flexibility. No matter what product or service you sell, you should include a business plan that explains how your business makes money. Include future products and services that your business might offer in the future.

Business Model

The business model describes how the business makes money. This section should be detailed if you are creating a new type or using a different method to create a product or service. If you have a pizza shop, for example, it is important to discuss how your business will make money. Customers can order from your restaurant, online, or via an app such as Uber Eats. Your homemade ranch bottles may also be available for sale.

Products

This section should be used to describe physical products that you are selling. Be sure to emphasize both the product’s features and its benefits. If you sell umbrellas, for example, you might describe them as made from nylon, metal and plastic. They are small and can keep you dry from the rain, which is a benefit.

Services

This section will discuss the services your business offers. You can have both the services and products sections if your business offers them both. Services don’t necessarily have to be purchased at a price. Your business may offer entertainment such as live music or bar games for free.

Fulfillment

It doesn’t matter if you are selling products or services. You need to explain how each one will be delivered. How will a service such as window installation be delivered? How will the window be installed, purchased, and where will it be bought? How will products be packed and shipped if you are selling products?

Future Products & Services

You can indicate if you intend to offer additional products or services after the initial launch. You don’t have to offer more of the same product. If you own a commercial photography business, you may plan to hire a graphic artist to offer a different service. You can also describe your plans to grow your business by renting the next-door unit to offer additional services or to sell additional products.

5. Market & Industry Analysis

This section analyzes your industry and potential customers. This section is where your case for why your business should succeed is made, supported by data. It’s a good idea to research your competitors and talk about their successes and challenges. This section should be persuasive and explain why your company will succeed.

Segmentation of the Market

Also known as your target market, market segmentation can be described as your business’s strategy for identifying the right customers. This is the group of customers most likely to buy your products and services. These customers can be described based on their demographic characteristics, including income, location and purchasing habits. If you plan to sell business-to-business (B2B), you can use these characteristics to describe the ideal customers.

After your target market has been segmented into groups, you can use market research data for market research to show where those customers live (or are likely do business with you online). This data can be obtained from a free source, such as the U.S. This data is available at no cost in thousands of libraries throughout the United States, including ReferenceUSA and Census. If you’re opening a daycare center, for example, you’ll need to provide data about how many families live within a radius of your business.

ReferenceUSA collects market research data from over 147 million U.S. citizens.

Target Market Segment Strategy

After you have created at least three segments, you can briefly describe the strategy that you will use in order to reach them. It will most likely be a marketing strategy. However, it could also be pricing, networking or sales strategies. Also, explain the overall thinking of the segments or inner workings of the business that would lead them to do business. If you own a restaurant near a theme park, explain how families will be drawn to your family-friendly restaurant following a tiring day at the park.

https://www.connectpos.com/choose-suitable-mpos/

https://www.connectpos.com/mobile-pos-empowers-shop-operators/

https://www.connectpos.com/mobile-pos/

https://www.connectpos.com/magento-pos-review-magestore-connectpos/

https://www.connectpos.com/magento-pos-review-xpos-connectpos/

Analyse of the Industry

Analyze the industry to determine the target segments and then explain why it is a good idea to start a company in that sector. A bank will lend more capital to a business that is in demand or has additional customers if it is in a growing sector. You can find industry statistics using a free tool such as the Bureau of Labor Statistics or a paid tool such the Hoovers Industry Research which offers professionally curated reports covering over 1,000 industries.

Competitor Research

Finish the market and industry section by analysing at least five competitors located within a radius of five miles. (If necessary, expand the radius). Make a table of the five competitors. Include their distances from your business, challenges and successes. You’ll need to present their problems as opportunities for improvement during your analysis. Your reader should believe that your company will offer superior products and services to the competition.

6. Marketing Strategy & Implementation Summary

This section outlines your marketing strategy and explains how it will be implemented. The opening paragraphs will give an overview of each subsection. This section might be longer for some businesses than others. A business that relies on ecommerce to sell its products may outline their website, social media strategy and online advertising strategy. This section will be shorter for companies that rely on government contracts to do minimal marketing.

Marketing Strategy

Discuss the overall marketing strategy of the company. Discuss any industry trends you might use, such as Facebook ads or video. Include the budget and advertising strategy, as well as specific channels, if applicable. Include who will oversee the marketing.

Traditional Marketing Plan

You might include in your marketing strategy a section that describes the traditional marketing plan of the business. Traditional marketing is anything that is not related to the internet, including flyers, business cards, local media advertising, magazine advertising, signage, and direct mail. Traditional marketing is a strong part of a retail business like a dog groomer.

Online Marketing Plan

A web plan, also known as an online marketing plan, is a plan that uses tools such as the website, email marketing, social media and video. It may take several pages. You can describe the services you are looking for, such as creating a website, managing social media, or hiring someone to do it. (You can also provide more information in the financial section).

Sales Strategy

Include a section on your sales strategy if it is an important part of your business. You should include the name of the salesperson or persons, the strategies they use to close deals with clients, follow-up procedures and the networking events they will attend. Also, talk about any training that your sales team will attend.

Sales Forecast Table

A sales forecast table is a summary of your expectations for where sales and expenses will be in the next three years of business. In the paragraph preceding the table, indicate where you expect growth and include a growth rate. Below, you will find the financial forecasts section that breaks down the annual sales forecast chart.

The annual sales forecast for this restaurant summarizes sales, cost, and profit for the first three years in business.

/magento-pos-review-ebizmarts-connectpos/

/prevent-shoplifting/

/effective-cashier-training-tips/

/speed-up-checkout-process/

/drive-customers-physical-store/

back-to-school-marketing-ideas-small-businesses/

Pricing Strategy

Discuss pricing strategies, including competitor pricing, sales promotions and discounts. This is basically all that you need to know about the pricing of your products or services. Pricing should be discussed in relation to service and product quality. You might consider including a summary of pricing for specific products (e.g., discounts on pizza prices when you order a certain number of pizzas for catering).

Milestones

A table is a common way to display milestones in a business planning document. These milestones outline the important tasks that must be completed before the business opens or expands (or if it is already in operation). Include the milestone’s name, estimated start date and completion date, cost, responsible person, and outside company responsible. At least seven milestones should be listed.

Milestones for this commercial photography business include hiring staff and completing marketing campaigns.

7. Management & Organization Summary

The management and organization summary provides an in-depth overview of the ownership and personnel plans. This section is important because investors often say that they don’t invest directly in companies but rather in individuals. This section will help you to show why your team and you have the knowledge and experience necessary to make this business succeed.

History of Ownership

Talk about the backgrounds of the owners and emphasize why they will succeed. If you are interested in opening a sports or outdoor store, talk to your retail management skills. You might consider hiring a co-owner if you have never managed a retail store. Banks won’t typically lend money to people who don’t have the experience to manage the type of business they are trying to open.

Management Team Gaps

Identify any knowledge or experience gaps in the management team. List the employees or consultants you plan to hire to fill the gaps. Investors who are familiar with your industry may be able to spot gaps in your business plan. It’s important that you list the employees or consultants you will hire to fill them in. Recognizing gaps in your industry experience will make it look like you are well-versed.

Personnel Plan

The personnel plan describes every position in your company for the next minimum of three years. The opening paragraph should discuss the company’s roles and who will be reporting to them. Include at least three years worth of salary projections for every employee in your company. At the bottom, include a total salary figure. This table can be further broken down into the salaries for each month in financial projections, or an appendix.

This commercial photography business has the CEO at the same salary every year, with their employees’ salaries increasing year over year.

8. Financial Data & Analysis

This section, which includes financial data and analysis, is the most challenging part of a business planning document. This section will require you to project income and expenses over the next three-years. It requires an understanding of the most common financial statements such as the balance sheet and profit and loss statements.

After reading the sections on financial data, you can use the free financial projections template provided by the Service Corp of Retired Executives to complete your business information. To assist you with forecasting, we recommend that you use a business plan or financial projections software like LivePlan.

Give an overview of the sections below in the opening paragraphs. The break-even point, projected profit, and the expected profits in the first, second, or third year of business are discussed. Also, state the projected assets and liabilities.

Ask your bank about the repayment terms and length of any loan you are applying for. Bankers need to know if the loan will be repaid and when it is likely to occur.

how-much-does-a-pos-system-cost/

/manage-omnichannel-inventory/

/basic-omnichannel-features/

/retail-elevate-omnichannel-strategy/

/connectpos-support-multiple-stores/

/stop-losing-online-sales/

Break-even Analysis

Break-even analysis refers to the point when revenue exceeds expenses, and profit is achieved. In the opening paragraph of this section, you should state the monthly fixed cost and the average percent variable cost. This is the cost that changes as output is produced. Variable costs in the example above increase by 8% for each additional dollar.

The break-even point for this document shredding business is $31,500 in a month.

Projected Profit & Loss

The profit and loss table shows a month-bymonth breakdown of income, expenses (including startup costs). The profit and loss table indicates the month in which the business will make a profit. Your business should be able to make a profit within the first year. This will increase in the years that follow. For the first two years of operation, be sure to track income and expenses month by month. For the first three years, create a separate chart showing income and expenses for each year.

Projection of Cash Flow

The cash flow section displays the company’s incoming and outgoing cash. This section is broken down into a month-bymonth table and should cover your first two years of business. Because it is focused on cash within the company, projected cash flow differs from the profit and loss projection. Because cash flow is essential, you need cash to pay your repayment obligations or meet unexpected cash needs.

The section’s introduction paragraph (before the projected Cash Flow Table) should describe what you intend to do with any excess cash. You might want to pay off long-term debt, increase cash contingency reserves or reinvest in U.S. Treasuries or certificates of deposit.

Projected Balance Sheet

The balance sheet displays the net worth and financial position of the company at a particular date. Because it is focused on assets and liabilities, the balance sheet differs from the profit and loss statements. The profit and loss statement is focused on income and expenses. The balance sheet should indicate that your company’s net worth has increased. For the first three years, prepare a projected year by year balance sheet.

Business Ratios

The business ratios, also known as financial ratios, are a way of evaluating the performance of your company. It is helpful to compare your projected business rates to industry standards. LivePlan offers business ratios for more than 1,000 industries through its paid plan. For the first three years, project your business ratios year by year.

You should be aware of your current ratio. This is your total current assets, cash and short-term debts, plus the current liabilities. Your current ratio is 1 if you have $2,000 of current assets and $2,000 of current liabilities.

A current ratio of 1:1 means that for every $1 in current assets, your business has 1 in current liabilities. Any ratio below 1 could signal that your business is unable to pay its debts. This would alarm investors and lenders.

things-to-think-about-if-you-own-multiple-retail-locations/

retail-marketing-trends-continue-to-thrive-in-2019-and-2020/

artificial-intelligence-marketing-retail/

what-persuades-people-to-try-a-new-retail-store/

/3-ideas-to-clear-summer-inventory/

/create-counting-procedures-for-inventory-audits/

9. Appendix

The appendix contains information about businesses that don’t fall within the categories above. The type of business that you are creating will determine what information you place here. Any visual elements should be included in the appendix. If you’re opening a restaurant or other business, add a menu and an artist rendering.

These items should be included in your business plan appendix

  • Building permits
  • Interior mockup by artist
  • Floor plan
  • Leases and agreements
  • Equipment documentation
  • Agreements with suppliers
  • Incorporation documents
  • Permits and licenses
  • Trademarks
  • Media coverage
  • Marketing materials
  • Recommendations letters

Although an appendix isn’t required in a business proposal, it is highly recommended to add some extra persuasion. Documents such as media coverage, agreements and documentation about equipment can show investors and banks that you are serious about the business. Consider creating a second table to add content to your appendix if it is longer than 10 pages.

Financial projections in detail

Financial projections for the future are typically year-by-year. Bankers and investors would prefer to see the first two year’s financial projections broken down month by month for the least the profit and losses statement, balance sheet, and cash flow. The appendix will contain more detailed projections. You can usually just print the Excel sheet in a smaller font and add it to the appendix. The appendix doesn’t require additional charts.

Commonly Asked Questions (FAQs), about How to Write a Business Plan

This section answers the most common questions regarding how to create a business plan.

What should a business plan include?

The purpose of your business plan will dictate what you should include. You will need the majority of the sections if you are seeking financing from investors or banks. If you only have the time to do one section, however, it is the financial projections. While your research and company information are important, investors and bankers will want to see your financials first. Although the research required to calculate the expected numbers can take a long time, it will be a great help in preparing for the launch of your business.

How can you create a business plan to start a company?

A business plan for a startup will look similar to one for an established company. The startup plan will include startup expenses, which will be listed per item and factored in to the financial projections. You may also need to provide additional information regarding the owner, market, industry, and business model in order to convince the reader that your business can succeed.

What is the average time it takes to create a business plan.

Simple business plans can be completed in a matter of hours. The template includes financial projections and a business plan. However, it can take more than 60 hours to find out the income and costs of running your business. You will also need to create a chart to display the costs. It is a good idea to make it easy to understand.

Is it difficult to write a business plan?

Yes, it is difficult to create a business plan that will be funded by a bank or investor. The financial projections can be difficult for most business owners, especially if you don’t have any experience in financial statements. business model canvas (BMC) is a simpler way to build a business plan. It’s more current and easier than the one shown here.

/boost-holiday-sales-with-holiday-gift-cards/

/how-different-generations-shop/

/how-to-deliver-personalization-in-retail/

/marketing-email-customers-likely-to-open/

/free-online-courses-for-smes/

/how-to-increase-your-average-order-value/

Bottom line

A business plan is essential for every type of business. Your business idea will be validated by the market segmentation and industry analysis sections. Forecasting and researching financial projections can help you to think logically about income and expenses. This will reduce the chance of your business failing. Employees and business associates should give feedback about your business plan. Before they can review the plan, sign an NDA if necessary.

Cloud Pos Software - A product of Prebidz.com

- Partners : socialblockchainnetwork.com | Fintech | cloudbasedpos.com | Blockchain solutions