Are you tired of working for a boss? Do you yearn to move away from the 9-to-5 grind and toward the self-employed lifestyle where you can set your own hours?
If so, you’re in the right place. Any budding entrepreneur needs one thing after they pick a business idea: a solid business plan.
Putting a business plan together, however, is no simple task. In this article, we’ll take a look at how to draw up a business plan. With these tips for putting a business plan together, we’ll help to ensure that your business gets the best start possible.
Pick the Right Format
The first step to developing a business plan is picking the right format that works for you. There are two principal formats that you could choose, a traditional business plan and a lean startup plan.
Both of the plans have the same elements that we’ll go over. The main difference is that while a lean startup plan only incorporates the bare bones of each component, the traditional business plan goes far more into depth for each part.
If you just want to get up and go as fast as possible, then a lean startup plan will suffice. However, if you need complicated funding and institutional investment, then your investors are going to want to see a more developed, traditional business plan.
Develop a Mission Statement
The first thing that you’re going to want to put in your business plan is your mission statement. Your mission statement should succinctly describe why your company exists. It should describe a problem that exists in your market and what your product or service does to solve it.
Make sure that your mission statement is value-focused. It shouldn’t be about your company. Rather it should be about the solution and value that your company provides to its customers.
Describe Your Company’s Product or Service
The next thing to incorporate in your business plan is a description of your actual product or service. You should thoroughly describe how the product or service works.
Make sure that you lay everything out in two ways. The first way should be a non-technical, general way that those who are unfamiliar with the industry can understand.
The second is a more technical description. This will be used for those who are industry experts who may be trying to do due diligence on your company by looking at your business plan.
Report Organization Structure
Who all is involved in the creation of your business? Who’s in charge, and what is the chain of command? What personnel will your employment structure start with?
These are all questions that should be answered by the org structure of your company. If you are going to own the company as a sole proprietorship and manage all of its operations, then there’s not a lot to do here.
But if you have several co-founders and leaders in the company right from the get-go, then it’s important to keep things clear with a concise org chart.
Complete Market Analysis
Market analysis is extremely foundational to any well-run business. The market analysis section of your business plan should include an estimate of how size-able your market is. This will give you an idea of how big your company can grow and if the market in any way will limit your growth.
Assess Your Competition
A crucial component that pairs up with market analysis is competitor assessment. You should have knowledge of all of your rivals in the space.
But you also need to take a step further to understand how your competition operates. What competitive advantages do they have that you need to neutralize? How is your product or service differentiated in the market?
Plan a Marketing Strategy
Once you know what the market looks like and what competitors you’re up against, you can plan out a marketing strategy.
Your marketing strategy is absolutely crucial to your company’s success. You could have the best product since sliced bread. But if you don’t have a market strategy, then no one will ever hear about it.
Given the size of the global digital population in 2020, much of a company’s marketing these days is digital. These marketing strategies include blogging, social media marketing, and the like.
Create Financial Projections
One of the more difficult parts of your drawing up a business plan is setting up financial projections. It’s hard to estimate how successful your company will be.
That’s why you should create several sets of projections that show what your financials will look like given varying levels of success. Be sure to include all costs that you expect to realize in the business, from the expense of your stubcreator software to that of paying your employees.
Display Funding Requirements
As any savvy business owner knows, cash flow is foundational to successful operations. As the old saying goes, you need to have money to make money.
How are you going to get your seed capital? Will the business be bootstrapped by yourself? Are you taking out a loan or opening a line of credit at a bank? Are you opening up the company to private investment?
Whatever the plan may be, be sure to document it in your business plan.
Put It Together with an Executive Summary
Last but not least, it’s time to put everything together with an executive summary. This summary should be easily digested in a couple of minutes and should highlight the especially noteworthy parts of your business plan.
This includes your financial projections, brief company description, and market analysis. The idea with the executive summary is that someone should be able to read only it and walk away with at least a cursory understanding of your business.
How to Draw Up a Business Plan, Made Simple
There you have it. Now that you know these tips for putting a business plan together, you should be far better equipped to start planning out your business.
For more info on how to draw up a business plan and run a successful company, be sure to check out the rest of the website!