How to Write a Business Plan: Step-by-Step
How to write a business plan: step-by-step
if you’re just starting out in your business planning cycle, it’s important to know how to write a business plan. We explain step by step below.
Every company needs a business plan. It helps you to clarify your business idea and spot any problems that may arise. It’s a document where you can set out your goals and provide a means of measuring your progress.
A business plan is also pretty important if you want to secure a bank loan or investment from shareholders. It’s an essential way of explaining what you’re all about. So how do you go about writing one? Here’s our step-by-step guide.
Already written your business plan? It might time to reassess it.
Step-by-step: how to write a business plan
First you need to plan the plan. Think about the purpose of your business plan and what it sets out to achieve. Typically, you want to focus on your objectives for the next three years, so outline your priorities and consider how you intend to achieve them.
You may want to tailor this part of the plan for the audience. Is it for raising funds or for encouraging your employees? Maybe you want it as marketing material for potential customers or as a guide for attracting business partners and investors.
Once you’ve designed your business plan, you can get to work writing it. Keep it short and pithy, focusing on what the reader needs to know. Explain whether financial projections are based on detailed data or assumptions. Both have their place. If you’re forecasting sales or growth, be realistic. It’s better to underestimate your potential than to fall short and damage morale.
3. Outline your business
A good business plan gives an outline of your business. Where is it now and where did it come from? Explain the history, ownership and structure. Why was it started, and how has it changed?
4. Business objectives
Outline what your company is planning to do. What products or services are you providing? Don’t be too technical, but give a general outline explaining the benefits and planned developments. What are the strengths and weaknesses of your product and how are you dealing with the latter?
5. Analyse your challenges
What are the challenges facing your company? It’s not just your own actions that impact your business plan, your company may be subject to external regulation too, so explain how this affects you. Who are your customers, and how do they use your products? Who are your main competitors? All these things help to build up a picture of your business in context.
6. Marketing and sales
Outline your marketing and sales strategy. This is the most crucial area of a business plan for any investor who wants to analyse your likely performance over time. Think carefully about how you intend to position your product in the marketplace, and how much you’re charging for it. What is the unique selling point that makes your product such great value? Who is your primary customer base?
Knowing these things allows you to explain your marketing strategy fully. Where are you advertising? What other means are you using to reach your customers? Once the sale is made, is that the end of it, or do you provide aftercare or service? These things are important for assessing the potential for repeat business.
7. Consider your liabilities
We’ve looked at the important visions of what your company is and where it’s going. Aspirations are great, but your business plan should also look at current liabilities. These are known factors, so should be itemised fully.
Look at staff numbers and management structure. List employee posts and explain how staff morale is maintained. Evaluate non-staff assets too. Your premises are the big one, but there’s also the stock you currently hold, IT equipment, tools, and any other assets as well. A good business plan itemises this.
Finally, presentation is everything with a business plan. Not only should it be clear and concise with figures where necessary, but forecasts should be plausible and achievable too.
The physical appearance is important too, so print it and bind it with a cover. Edit and proofread it. If you’re making mistakes in the plan, what does it say about your running of the business? It all goes to emphasise your professionalism.
Our experts are here to help you with all aspects of business management and planning. Interested? Visit our Business Accounts section to see how you could benefit.