How to Write a Business Plan in 9 Simple Steps

Writing a business plan may seem like a daunting task. Where to start? What to include? That’s why we created this simple 9-step guide to help you get this done in no time.

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Knowing where to start when writing a business is where many entrepreneurs struggle. Usually, they pine and mull over what information to provide and how to format their business plan. 

It can be a lot to think about, but we want to help you achieve your goals, and that starts with really thinking about your business and how you’re going to include the most important details in your business plan. 

Only around two-thirds of businesses survive their first two years, and this alarming statistic can be associated with the lack of a coherent and decisive business plan. 

There is no particular format or rules built around a business plan, but there are essential things that it must include. Think about your business plan from an investor's perspective or a potential business partner you're trying to impress. 

What information do you feel you'd need to make an informed decision if you were going to be associated with your business? It would help if you were thinking about it as you write your business plan.

You want to capture the overall picture of your business and why it works. 

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1. Write an executive summary

The focus of an executive summary is to emphasize the critical points within your business plan and the entire document. When someone reads your executive summary, they should understand your business's full intention. 

We recommend you write your executive summary last to have a better way to summarize your document. So while it will be first on your business plan, it should be written last.

2. Describe your company

In this section of your business plan, you should ensure you answer all the important questions people may have about your business.

Your document should address the basic information such as your business's name, location, and key executives. You'll also want to include a brief history of how your company came to be and how it got to its current standing.

We think it's best to outline critical points such as your impact on the community, your work environment, and your business's values.

3. State your business goals

Stating your overall goal(s) is essential. This section will be one of the most important parts of your document to investors. Your goal statement should be clear and concise.

While it should remain as brief as possible, ensure the message gets across.  You can choose to add clarity to investors as to what you'll need to reach these goals in terms of capital and resources.

Please don't be afraid to expand upon your current standing compared to your goals. 

4. List your products and services

When writing a business plan, it's imperative to explain what you will be providing for your consumer. Your business should state all your products and services comprehensively. 

Additional information to explain your product or service may be necessary if a general audience wouldn't understand what it does. 

For example, stating a product name may be enough for you, but it's best to ensure that others are aware of the purpose of each product and service. 

Overall you may think of this checklist:

  • Product or service name
  • Price of the product
  • Target demographic interested
  • Sales strategy
  • How you distribute the product or service

While you may not necessarily have to include everything on the checklist, it'll serve as a good guideline for the information you should provide to investors and partners reading your business plan.

5. Do your market research

We suggest you address three essential factors within your market research.

  • Know your ideal customers
  • Know your competitors
  • Know your ideal locations

Sharing your market research in this section will be very important. Your business's ideal customer usually involves how much money they will spend on your products and services.

You will then note this customer research within your business plan, and you should expand on why these customers are suitable for your business.

Additional information such as how much each consumer spends and repeat customers will also prove valuable. Investors will be keenly interested in who your competitors are, and it's essential that you analyze the potential threat and how you're dealing with them.

Emphasize why these other businesses are competitors and their strengths and weaknesses.  Market analysis also involves understanding your ideal location.

Explain why the areas you've researched are the optimal places to conduct business within your business plan.

6. Define a marketing and sales plan

This part of your business plan will focus on acquiring your target demographic, and how you'll close your sales.  You should mention distribution in this section if you're thinking of discussing it.

Investors will be curious about the ins and outs of who you're working with for distribution and why.

7. List management team and organization

Partners and investors will usually turn to this section of your business plan almost immediately. The business plan section will provide information about your prominent team members and your organization's structure. 

List each member's experience and industry background. Note exceptional educational experience in this section. Expanding on each member is essential but only include relevant information. 

Address your company's structure in this section. Note if your company is an LLC, a partnership, sole proprietor, C-corp, or an S-corp. Generally, the information around your company structure isn't heavily focused on as your company structure isn't a point of interest.

If you want to expand on your company structure, cover points as to why you chose that particular structure. For example, why did you choose an LLC structure for a partnership?

Answer that question for your investors. 

8. Include a financial analysis and operation plan

Depending on your position, your financials may be lacking, but if they're not, be sure to provide the basic information about your business's financial decision.

Doing so will allow investors to see the health of your business.  Basic metrics are on your profit and loss statement, balance sheet, and cash flow statement.

Use information from these documents to produce a comprehensive financial analysis of your business's current position.  You should also provide a potential projection of where your business will be within the next year or two in terms of financials.

If you make a future projection, make sure you base it on information from the data and information you currently have.

9. Make a financial plan

Your financial plan will focus on addressing how you'll be funding your operation. This section can include the costs associated with potential new equipment and employees. 

Investors will look at your financial plan to understand how much money you will need and how you distribute that money.

Next Steps

The next step is to draft up your business plan or revise the one you're currently working on. There are numerous ways to create and draft a business plan, but this article has provided you with the fundamentals to include within your document.

You may think that a business plan is unnecessary, but it's important to remember the strategic benefits of it being well-written.

We genuinely don't want you to be another business that fails within its first two years of operation because of a less than stellar business plan.

FAQ's

What is a business plan?

We see a business plan is more than just a document that lists out the inner workings of your business. The business plan you create will remain a constant throughout the lifecycle of your business and will be continuously updated as needed. 

Your business strategy, marketing strategy, financials, and team members will evolve and change throughout your career. In essence, a business plan is the living embodiment of your organization.

What are the different types of business plans?

Numerous business plans focus on a few particular points. Business plans are then created and structured around these points. 

  • Internal business plans
  • Lean startup business plans
  • Growth business plans
  • Strategic business plans

Two other types of business plans come up. These business plans are known as operations and feasibility business plans. Still, they are very niche and aren't as prominently focused on because they typically are addressed in other business plans.

What is the purpose of a business plan?

Your business plan is vital because of all the information it can provide to anyone who reads it. The information included in a business document provides lenders, investors, and other organizations insight into your operation.

A business plan’s sole purpose isn't just to attract investors and partners. For many businesses, it is essential to see and understand their operation on a macro level.

Having that type of view and understanding of your business allows for more informed decisions.

What is the difference between a business plan and a marketing plan?

A business plan serves an entirely different purpose than a marketing plan. A marketing plan functions to create a document revolving around spreading awareness for the business or a particular product or service. 

Marketing plans go into great detail about competitor analysis, strategic advertising campaigns, and brand awareness. Market plans are heavily associated with generating sales, while business plans focus on the company's operation. 

A business plan is a document created to create an overview of how the operation functions, including the business's goals and how it plans to accomplish those goals.

A marketing plan changes a lot more than a business plan in terms of flexibility.

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Plan, fund, and grow your business. Easily write a business plan, secure funding, and get insights to help you reach your goals with LivePlan.

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