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A business plan is not just any document. Whatever business you enter, you have to be equipped, thus the need to write the best business plan.
In starting a business, this will be your map that will guide you to the success of your business.
It will have the outline of your goals and the pathway to achieve them.
A business plan is a tool that will help you make decisions based on research. It will feature how you will run your business and the plans to make it grow.
If you are planning to find investors for your business, you’ll need an effective business plan to ensure they’ll approve the fund.
In this 2021 guide, we will discuss:
- Reasons you Need to Write a Business Plan in Starting a Business
- Parts of a Business Plan
- Tips on Writing a Business Plan
- The Business Plan Starter Pack
Reasons you Need to Write the Best Business Plan in Starting a Business
There are many reasons why you need to write a business plan when starting a business. I have started businesses that didn’t have a strong business plan. It resulted to closure or it took time before it could earn some bucks. In case you’re wondering if you should allocate precious time for this, read on:
- To analyze any weaknesses and challenges your business may have that will affect your future immensely. By knowing these in advance, you can identify solutions and address the problem head-on.
- To discover any potential business opportunities you may have missed while conceptualizing.
- To get to know your market, who they are, and how your products and services can reach them.
- Determining who your competitors in the market are and knowing how you can use this to your advantage.
Whatever business you may think of starting, you must do your homework beforehand. Even people with photographic memory still need a reference, so should you! There are always things you may have overlooked but a business plan will guide you along the way.
“A goal without a plan is just a wish.”
Parts of a Business Plan
It can be overwhelming to start a business. Even if it’s only a passion side hustle and you have a full-time job going on, there are different factors you have to take into consideration. Here are the key components of a business plan:
Here’s the most important component of your business plan. One look at your executive summary and the investor can either say yes or no to the project. Although this is in the front page of your business plan, consider writing your executive summary last.
An executive summary should explain the business idea at a maximum of two pages, what your product and services are all about, the business’ goal, to whom are you going to sell it to, your advantage against the competition, management team and the financial outlook, including how much you’ll need as capital for the business.
This part will explain the basic elements of your business from the company mission statement, philosophy, vision, your company’s goals, target market, industry and legal structure.
Products and Services
Fill in as much information about your products and services, from the problem it solves to how much you will sell it for.
What is your industry about (total size, trends, size of the target market and trends in the market)? How is the competition?
This is also the part where you need to market research, introducing the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. This will show the vulnerability of your business from both inside and outside factors. Knowing these beforehand, you can prepare a backup plan on how to overcome these challenges.
What is the positioning of your business? How can you reach your customers? Will it be via online, print, radio?
How will you market your business? Will it be via a website, social media marketing and/ or word-of-mouth?
How much will be your marketing expenses?
What is your price strategy?
How will you produce the product or offer the service? In this section, you have to elaborate the production methods, what equipment is needed and the cost.
How will you maintain quality control?
Where will you operate your business? What is the size of your location, type of building, restrictions if any, utilities, and the cost of operation.
You also need to put here any type of license, copyrights, insurance, regulations and other requirements for you to operate your business.
Does your business require inventory? If yes, that what kind will you keep on hand?
Who will be your suppliers? Include their name, address and website.
Will you have any credit policies?
Management and Organization
Who are the people behind the business? What are their roles and responsibilities? Do they have any prior experience?
You must also include an organizational chart here.
Startup Expenses and Capitalization
This is the section where you need to detail all the expenses involved in opening for business. How much capital will you need? This will not inclue the ongoing expenses when your business which should be covered by the financial plan.
Here’s the most essential element of your business plan. Investors will definitely examin this section thoroughly. Having a financial plan will help you set your financial goals and assess the financing needs.
A financial plan will feature a projection of 12-month profit and loss. Optionally, you can even include a 3-year projection too.
What will be your cash flow like?
You will also need to create a projected balance sheet and a break-even calculation.
Any supporting business will go to this section.
Don’t forget to make your business plan as clear and concise. Even a person who does not have any idea about your industry must be able to understand it.
Starting a Passion Side Hustle? Then we recommend you get the Passion Hustle Workbook! This workbook is for you if you want to quit your job in a few years so you can spend more time doing things that you love, with friends and family, activities that help the community.
Tips on Writing a Business Plan
I tried to be as brief as I went through with all the key components of a business plan template. Now, all you need to do is the deep-dive and be obsessed with your business. Get to know all the ins and outs of it.
The above are all on a technical level. However, you must also not forget the following abstract components that will house your business foundation when you are starting a business.
Identify your goal in starting a business.
Sure, earning money for your business is a good thing because you can pay back expenses, investors, etc, but that’s not the only thing that’s important.
When you start a business, does it match your values? What does your business stands for? How will the people behind your business behave?
What is your vision in starting this business?
How do you see your business in five, ten or twenty years? Will you be in this business for a long haul?
How big will it grow? Where will this business go?
Think of the end-goal.
As the realities of your business unfold, think about the what-ifs. For example, what if you plan to sell the business in the future? What if the business got acquired? Are the prices you are putting in your products and services reasonable?
Identify your target market.
How well do you know your target market? Try to ask yourself this question, “Why am I uniquely placed to solve the problem?”
If you can answer this question easily, that means you’re in the right path. Otherwise, I’m afraid there’s more work to be done before you start targeting your potential customers
Test your business idea.
Speak with a potential customer and ask for honest feedback. What do they think about a particular product or service you are going to sell? Will she/ he buy it? If yes, how much will they be willing to pay for it?
The Business Plan Starter Pack
Ready to level up your game? An entrepreneur’s day can be overwhelming. You will need all the help and support you can get. Keep your day organized with this business plan starter pack!
Thank You, Customers Tape: Build relationships with customers with this Thank You, Customers Tape. It’s very easy to peel off from the packaging, has a strong adhesion allowing it to be easily and firmly attached to almost any surface.
Label Maker: This Phomemo-M200 Label Maker is a multi-purpose label machine. The Bluetooth label printer comes with various App templates, mobile phone editing, and you can choose the template according to your needs.
2 Fold Business Check Binder: It is stylish, made of thick, durable, textured and attractive PU Leather. What more can you ask for? It also features an extra business card holder case, built-in pockets for a notebook, folders, business cards, credit cards, phone, calculator, receipts and other documents.
Kate Spade Office Supplies: You can’t go any more chick than this. Give your desk a little freshening up with this acrylic tackle box from Kate Spade New York. Desktop organizer includes an eraser, notepad, magnets, sticky note tabs, a ruler, and a pencil sharpener— with all this, you’re ready for success. This desk organizer will keep your workspace lookin’ tidy and chic!
Business Card Holder: Holds up to 13 standard business cards, credit cards, ID cards or gift cards. It made of polished stainless steel coated by premium vegan leather with soft microfiber interior lining, provides a comfortable touch feeling and durable protection of your business cards from abrasion.
There you have it! A 2021 Guide on Writing the Best Business Plan for your business. Have you written a business plan before? What were the things you wish you knew?
I really regret the time when I got lazy and just went on with a business without a plan. It’s like walking blindly and hoping to find a box filled with treasures.