Do you have a business idea and don’t really know how to put it all together on paper? I’m going to guide you through writing that business plan that just compels investors to give you their money. I actually used the format I’m going to give you in this article to get almost instant funding from an investor who requested my business plan just after a few minutes of talking.
Entrepreneur defines a business plan as a “written description of your business future” and a business without a future isn’t one that investors will be willing to throw their money into. That’s a big reason why a good business plan is very important.
You must have heard the saying, “If you fail to plan, you plan to fail”. Well, beyond the meaning of the quote or the importance of planning which is very crucial in setting up a business,
- It acts as evidence that you’re knowledgeable in what you want to get into or you’ve made your research.
- Business plans show on paper how lucrative you project a business idea. That way, Investors can actually go through your proposal and decide to invest in your business or not.
- It helps you to identify weaknesses you may not have seen by just having a “picture” or a mere description of the business in your head.
In summary, a business plan is very important, as part of it involves defining the vision, mission, objectives, and goals which all extraordinary businesses have.
Tools needed for crafting your business plan.
• A Document creating app or software – Microsoft Word is a great software to use for this one.
• Internet connection – Which I guess you already have for you to be reading this right now. You may need to research the market, demand, and trend of the business, or maybe just an aspect of the business. You may need an estimated price of a commodity. The internet can be invaluable in this aspect.
Okay, let us go straight into business.
1. Cover page
With Word 2016, you don’t need to stress yourself trying to design your cover page by a professional graphic designer. As word comes with some free templates you could import and tweak to your satisfaction.
Your cover page should include;
- Company Name
- Brand Colours – If you have already got one
- CEO/Owner information
2. Table of content
This is a page outlining the summary of all topics you’ll be touching on in your business plan. It gives a clear roadmap to where various sections of your business plan fall. Starting from the Executive summary down to project costs which is the last topic we’ll be talking about in this business plan.
3. Executive Summary
It need not be too long because you’ll still be going into more details as you go into other sections. The best practice is to work on this when you’re done with other aspects of your business plan as it gives you a better picture of what you’re summarizing. Think of it as an elevator pitch as you want this one to be on point and spot on!.
It could be tough fitting this into one or two pages but an awesome summary should include:
- Project name
- A short and concise description of your business
- Your business goals and vision
- A solid description of the market
- Projected revenue from the business
- An outline of funding necessities or how much you’re asking for
- Your team
4. Business Description
Here, you give a detailed description of the business, your mission, and your vision. You want to start this one with something that captures the ‘raison d’être (purpose) of your business.
Describe the vision and also where your business is headed so that people can better understand who you are and what your business is all about. You’ll also be looking at who you’ll be selling your products to.
5. Demand
This section includes the need for the product or service you’ll be rendering. Without a demand for your product, there is no business. Investors want to know that, what you want to sell or the service(s) you want to render to your customers are very much needed by people. You could also come up with better-researched charts that better buttress’ the high demand for your product or services.
Answer questions like;
- What customers would need
- Additional advantages that set you apart from other competitors
6. Market analysis
No business can succeed without an effective marketing strategy. This should include information about your target market, competition, and the industry. You want to gather as much information as possible in the following:
- Size of your market
- Who your potential customers are
- How often they shop and where
- How much those customers are willing to pay for your product
- Who your competitors are
- What their challenges and successes have been
- How you could be better
7. Pricing
Aim to set a competitive price for your product or services. Remember to think in terms of profit as that is the main reason for your business.
You could also include what pricing strategies to employ for your business. There are various types:
- Competition-based pricing strategy – The goal is to beat the prices of what competitors set but this could be difficult for small businesses to keep up.
- High-End pricing strategy – This one targets consumers who believe that the best products are the most expensive ones.
- Penetration strategy – This pricing strategy aims at gaining a lot of consumers by setting their prices low initially and then increasing the prices when they’ve gained enough customers.
8. Site
This section covers the location of your business. A lot of experts in the field have argued for and against the importance of location in the success of a business but notwithstanding, you’d want to specify what site you’ll be using for your business. Home-based, commercial, industrial. Include possible locations and benefits too, if you’ve already got that covered.
You want a location that gives you a great competitive advantage.
9. Human Resources
You will be talking about personnel in this section.
- Individuals involved in the running of the project
- Qualifications of those individuals
- How your employees are going to be paid
- How you intend to train them to better function in their positions
- What specific tasks they’ll be undertaking
10. Customer services
This is an important aspect as you want this on point. You’ll have to put down how you intend to communicate with customers and handle their issues and work on your team. You want to plan ahead so that you’re ready when the time comes and you’re faced with customer issues.
11. Promotion
This section covers the means you’re employing to reach out to your customers. It is a very vast topic but for the sake of simplicity, we’ll be getting it down to answering two questions;
- How will you promote or advertise your service?
- How do you intend to reach your target audience?
12. License
It is really important that you get them earlier on in your business if you’re really serious about growing and going far. Business licenses give you the right after you pay, to operate a business in that city. Do your research and find out what other kinds of permits/licenses would be needed to run a business legally in your area.
13. Storing
Whether physical goods or digital (like data), you ought to have the best means that you store them and how best you intend to check up on your equipment.
14. Working Hours
You are writing your opening/closing hours and also the days of the week your business would be open. If you run a 24-hour business, you’d want to schedule shifts and distribute workers in their respective shifts.
15. Accounting
You want to put down the best system. You want to track your cash flow and those related to accounting in your project.
You would have suppliers one way or another. You want to include the best ways to make transactions with them. You’d also have to include the bank, most preferably the one nearest to you that you could open an account with for your business.
16. Project needs
This is the section where you talk about the equipment you will need to facilitate the work done in your company. Including technology and personal needs.
17. Project cost
In this section, you’re trying to estimate startup costs. I use the word ‘estimate’ because you can never get an exact figure on this one. The section would also contain ways by which you intend to cut costs in the future. Most of your expenses may be incurred by employing the services of other businesses. You may want to reduce the amount of “outside” requests in the future.
There you have it. You should have gotten the hang of writing your smashing plan. It won’t be easy getting everything together and incredibly organized but it’s really rewarding when the whole work is done. You may not have all the information regarding your plan immediately, it’s totally okay.
You may at times be forced to go out to survey a particular location, and inquire about market prices of some equipment or commodities you would want to acquire for the business but one thing is this, it gets easier by the day. It’s like a muscle that strengthens each time you use it and financially, it increases your propensity to understanding, crafting, and modifying your business plan when the need arises.
Also, plan for rejection. Most business plans may not be accepted or considered by some investors but that doesn’t mean the idea is whack. A good example would be David Balter. He had an idea for a business called Mylestoned and 200 investors turned him down. But he believed in his idea and didn’t let the words of those guys stop him. That business is up and extremely successful presently.
Don’t stop believing. Wish you luck in bringing your business idea to life.
Photo by Anastasia Shuraeva