How to Make a Good and Correct Business Plan
The important thing for every entrepreneur to know is how to make a business plan.
Businesses that are run without a clear business plan often end in losses.
A business plan is not easy to make, there are many factors that must be considered before making it.
Generally, a business plan contains your goals for running the business, the strategy to be executed, and various internal and external factors that need to be considered when you run a business.
So, how do you create a business plan?
The following is an explanation of what a business plan is, how to make a business plan, and important factors to consider when you make it.
Definition of Business Plan
A business plan is a printed document created by an entrepreneur describing and considering internal and external factors when starting or running a business.
In general, what must be included in the business plan are the main objectives of running the business and the strategies to be implemented.
Everything that is written in the business plan must be detailed and also realistic. This document will serve as your guide when you are running the business.
The business plan must also be clear and easily understood by others, such as employees, business partners, to other parties who may be involved, such as investors or banks.
Here are Steps to Write a Simple Business Plan
Writing the right business plan requires research into the factors for each section.
1. Executive Summary
An executive summary will always be the first section of your business plan. Answer the following questions:
- Mission and vision for business
- What are short and long term goals of your business? (nerdwallet.com)
2. Business Description
The purpose of this section is to define the domain, scope and intent of your business. For this reason, answer the following questions as clearly and concisely as possible:
- What business are you involved in?
- What does your business do?
3. Market Analysis
This section is to provide evidence that you have surveyed and understand the market today, and that your product or service fills a niche in the market.
To do so, answer these questions:
What does customer value mean?
Who's your customer?
4. Competition Analysis
In many cases, a business plan does not propose a new venture (or even disrupt a market), but a version that is more competitive, be it through price, features, integrations, than what is currently available.
In this section, answer the following questions to show that your product is superior to your competitors in the marketplace.
Who are your competitors?
What is the best that competitors do?
What's your unique value proposition?
5. Description of Organization Management
In this section, write an overview of the business team members and other key personnel who are an integral part of success. List roles and responsibilities, pay attention to the hierarchy or structure of the team.
6. Description of the Product or Service
Clearly define your product, and all the effort and resources that went into producing it. The strength of your product will largely determine the success of your business, so you should spend time testing and perfecting your product before releasing marketing, sales or funding details.
Questions to be answered are as follows:
- What are the products or services?
- How do you manufacture it?
- The resources required for production
7. Marketing Plans
Determine the marketing strategy for your product or service. Answer basic questions, such as these:
- Who is the target customer for your business?
- Which channel to use to reach your target market?
- What resources is required by your marketing strategy?
- Do you have access to your marketing strategy resources?
- Do you have a rough time and budget estimate?
- How are you going to measure success?
8. Sales Plan
Write an overview of the sales strategy, including the steps to reach those goals, and the metrics for success. For business plan purposes, this section doesn't need to be an in-depth sales plan, but rather outlines the high-level goals and strategy of your sales efforts.
Start by answering these questions:
- How the sales strategy?
- What tools and methods will you use to reach your goal?
- What are the potential barriers, and how will you overcome them?
- What is the timeline for sales and profit making?
- What is the metric of success?
9. Business Funding
This section is the most important part of your business plan, especially if you work with investors. You don't need to provide a full financial plan, but you should answer the following questions:
- How much capital do you have?
- What capital do you need?
- How will you develop the team (team structure, onboarding and training)?
- What are your requirements and physical constraints?
How a Business Plan helps Grow Your Business
A business plan can grow your business by helping you fine-tune your product, target customers, plan sales, identify opportunities, secure funding and build new partnerships.
Writing a business plan is a useful exercise as it sets you up to research the market, and encourages you to create your unique value proposition, and identify ways to beat the competition.
It will also help you build and hold you accountable to achievable financial and product milestones. And in the end, it'll serve as a welcoming guide when obstacles arise.
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