10 Steps to Writing a simple Business Plan7 min read
INTRO: What is a Biz Plan? Steps, Choosing.
10 STEPS: Exec Sumry, Description, Target Market, Competitors, Management, Marketing Plan, Sales Strategy, Funding Financial projections.
A business plan is the foundation of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice.
Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write. Plus, find information on how a business plan can help grow a business and expert tips on writing one. In this article
What is a Business Plan?
A business plan is a document that explains a company’s goals & vision – along with the timeline, finances, & methods needed to achieve them. Additionally, it should include a Mission Statement and details about the specific products and/or services offered. A business plan can highlight varying time periods, depending on the stage of your company and its goals. A typical business plan should include the following benchmarks:
- Product Goals & Deadlines for each mo.
- Profit & Loss statements for the first 3-5 years
- Monthly Financials for the first two years
- Balance Sheet projections for the first three to five years
Guide. Startups, entrepreneurs, & other small businesses should all create Business plans to use as a guide as their new company progresses. It should be reviewed once a month to monitor high-level goals, financials, & timelines, then modify – if needed.
Value. While you certainly need to have a formalized plan of your business’s goals & finances, creating a Business Plan can also help you determine a company’s viability, profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.
For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates. This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates.
Business Plan Steps
The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:
- 1) Executive Summary
- 2) Description of Business
- 3) Target Market analysis
- 4) Competitive analysis
- 5) Management Team background
- 6) Description of product and/or services
- 7) Marketing plan to Target
- 8) Sales Strategy plan
- 9) Funding details (or request for funding)
- 10) Financial projections
Table of Contents. Whether your plan is short or long (& probably complicated), consider adding a ToC and even an Appendix for reference – if needed. For an in-depth description of each step listed above, read “How to Write a Business Plan Step by Step” below.
Target Audience. Broadly speaking, your Target Audience includes anyone with a vested interest in your organization. They can include potential or existing investors, as well as customers, internal team members, suppliers, and vendors.
How to Choose the Right Plan.
In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow. Use the chart below as a guide for what type of business plan to create:
Is the Order of Your Business Plan Important?
There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.
The Difference Between Traditional and Lean Business Plans
A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.
In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.
How to Write a Business Plan Step by Step
Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.
Step 1: Executive Summary
The executive summary will always be the first section of your business plan. The goal is to answer the following questions:
- What is the Vision & Mission of the company?
- What are the company’s short- & long-term Goals?
See our roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.
Step 2: Description of Business
The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:
- What business are we in?
- What does our business do?
Step 3: Market Analysis
In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:
- Who is our Target Customer?
- What does that Customer value?
Step 4: Competitive Analysis
In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:
- Who is the competition?
- What do they do best?
- What is our unique value proposition?
Step 5: Management Team Background
In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.
Step 6: Description of Products or Services
In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.
Questions to answer in this section are as follows:
- What is the product or service?
- How do we produce it, and what resources are necessary for production?
Step 7: Marketing Plan
In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan, but it should answer basic questions, such as the following:
- Who is the Target Market (if different from existing customer base)?
- What Sales Channels will you use to reach your Target Market?
- What Resources does your marketing strategy require, and do you have access to them?
- If possible, do you have a rough estimate of timeline & budget?
- How will you measure success?
Step 8: Sales Strategy Plan
Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan, but can simply outline the high-level objectives and strategies of your sales efforts.
Start by answering the following questions:
- What is the Sales Strategy?
- What are the tools & tactics you will use to achieve your goals?
- What are the potential Obstacles, and how will you overcome them?
- What is the Timeline for sales & turning a profit?
- What are the Metrics of success?
Step 9: Funding Details (or Request for Funding)
This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:
- How much Capital do you currently have? How much do you need?
- How will you grow the team (on-boarding, team structure, training & development)?
- What are your physical needs and constraints (space, equipment, etc.)?
Step 10: Financial Projections
Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years.
While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:
- How & when will the company first generate a profit?
- How will the company maintain profit thereafter?
Comments: Do you have any other Steps for a simple Business Plan?
From SmartSheet 11+11=22 enhanced by Peter/CXO Wiz4.biz
For similar Info, click on Business Plan.