Writing a business plan sucks! if you are an entrepreneur it’s even worse.It’s just so crystal clear to us that things will go wrong in real life, and no business plan can save us.
Have you ever heard the saying ‘’You learn to ride a takoon by riding a takoon’’? I suspect you are also in the club.
Yeah, I agree, nothing is guaranteed! I also find it hilarious any time I see “founders” document sexy road maps to their utopian projections as though they have it all figured out.
However, the necessity of a business plan cannot be overemphasized, Benjamin Franklin once said If you fail to plan, you are planning to fail. This is also true for running a business that can scale.
As a third-time entrepreneur, who previously built a 100 million naira revenue business without a business plan and currently building an ‘’investors attracting’’ five-million-dollar start-up with a business plan, I’ve learnt that business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.
Writing a business plan helps you see the world the way it is, you merge your obsession with reality. It makes you do your homework, start asking critical questions, looking at the business with an external eye, know your numbers by heart and be investor-ready.
This article is not to turn you into an overnight business development expert, rather as an eye-opener to understand the place of crafting a perfect business plan for your business and the step by step process of going about it.
In this guide, I’m breaking down step-by-step everything you need to know about creating a killer business plan.
Table of Contents
- What is a Business Plan?
- Why Need A Business Plan?
- How to write a Killer Business Plan?
What is a Business Plan?
A business plan is a 15–20 page document that describes in detail how a business — usually a startup — defines its objectives and how it is to go about achieving its goals. A business plan lays out a written roadmap for the firm from marketing, financial, and operational standpoints.
Business plans are important documents that are used for both the company’s external and internal audiences. A business plan, for example, is used to attract investment or to secure lending before a company has established a proven track record. They are also a good way for executive teams in companies to be on the same page about strategic action items and to stay on track toward the set goals.
A business plan is essential for any company, but it is especially important for new businesses. Ideally, the plan is reviewed and updated on a regular basis to determine whether goals have been met or have changed and evolved. A new business plan is sometimes created for an established business that has decided to take a new direction.
Types of Business Plans
Common types of business plans we see include, but are not limited to, the following:
Start-Up Business Plan
New businesses should detail the steps to start the new enterprise with a start-up business plan. This document typically includes sections describing the company, the product or service your business will supply, market evaluations, and your management team. Potential investors will also require financial analysis with spreadsheets describing financial areas including, but not limited to, income, profit, and cash flow projections.
Traditional Business Plan
These are the most common business plans, it covers the standard elements of a business plan and go into detail for each section. Traditional business plans take longer to write and can be dozens of pages long. Venture capitalist firms and lenders ask for this plan.
A nonprofit business plan
This is for any organization that works for the public or social good. It includes everything found in a traditional business plan, as well as a section describing the company’s intended impact. For instance, a speaker and headphone brand that aims to assist people with hearing impairments. This plan is frequently requested by donors.
Why You Need A Business Plan
Writing a business plan or putting together an investor deck allows you to think more clearly about what you’re doing and where you are going. It gives you perspective about your numbers.
2. To gain a better understanding of your competitors.
Creating a business plan requires you to conduct a competitive analysis. All businesses face competition, whether direct or indirect, and it is critical to understand your company’s competitive advantages. And, if you don’t already have a competitive advantage, figure out what you need to do to get one.
3. To raise money for your business
If you ever plan on getting external investors to fund your business, you’ll need to create a business plan. Potential investors or lenders want a written business plan before they give you money. A mere description of your business concept is not enough. Instead, ensure you have a thorough business and financial plan that demonstrates the likelihood of success and how much you will need for your business to be successful in the long term.
4. It’s a Great Way to Keep Track of Accomplishments
Often we entrepreneurs fall into the ditch of being so obsessed about the next year when the most important data is the year that just passed you by. To predict the future, you have to study history. What happened this year for you? What went right?
It’s easy to blame your lack of success on the market or other factors beyond control. One percent of the time you’re forgiven for that. But 99% of the time you need to focus on what you can control and you can control most of it.
Business plans help you keep track of all your progress and accomplishment and see how far you’ve gone and see clearly
5. It will assist you in steering your business as it begins and grows.
Consider a business plan to be a road map for getting your company up and running. A good business plan will walk you through each stage of starting and running your company. Your business plan will serve as a road map for how to structure, run, and grow your new venture. It is a method of thinking through and detailing all of the key elements of how your business will operate.
How to Write a business plan
Here’s what your standard table of contents looks like:
- Executive summary
- Market analysis
- Business Model
- Marketing Strategy
- Financial Projection
- Competitive Advantage
Elements of a Business Plan
As mentioned above, no two business plans are the same. But they all have the same elements. Below are some of the common and key parts of a business plan.
- Executive Summary: As the title implies this section usually contains a short outline of the company and includes the mission statement along with any information that sums up the business operations and more importantly how much are you raising in that round?.
- Products: Here, the company can outline the products it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology.
- Market analysis: This section describes the world as it is. Footnote if you want to, but tell us about the market you are entering, the needs that already exist, the competitors in your space, technology standards, the way others have succeeded and failed in the past. The more specific the better. The more ground knowledge the better. The more visceral the stories, the better. The point of this section is to be sure that you’re clear about the way you see the world, and that you and I agree on your assumptions. This section isn’t partisan, it takes no positions, it just states how things are.
- Business Model: The business model is at the center of the business plan. It describes how the company is positioned within its industry’s value chain, and how it organizes its relations with its suppliers, clients, and partners in order to generate profits. Examples are freemium, advertising, pay-as-you-go, subscription business plan, etc depending on what best suits your context.
- Marketing Strategy: This section is your chance to describe how you’re going to change things. We will do X, and then Y will happen. We will build Z with this much money in this much time. We will present Q to the market and the market will respond by taking this action.It will also spell out advertising and marketing campaign plans and through what types of media those campaigns will exist on.
- Team: The team section rightly highlights the key element… who is on your team, who is going to join your team. ‘Who’ doesn’t only mean their resume, who includes their attitudes and abilities and track record.
- Financial Projections: To attract the party reading the business plan, the company should include its financial planning and future projections. Financial statements, balance sheets, and other financial information may be included for already-established businesses. New businesses will instead include targets and estimates for the first few years of the business and any potential investors.
- Risks: You will make assertions that won’t pan out. You’ll miss budgets and deadlines and sales. So this alternatives section tells what you’ll do if that happens. How much flexibility does your product or team have? If your assertions don’t pan out, is it over?
- Competitive Advantage: what are the edges you have in the competing forces in the market. This can happen due to a number of factors including patents, cost advantages, key partnerships, and relationships, superior product offerings, ‘first to market ‘, access to expertise, barriers of entry, distribution rights, branding, etc.
- Budget: Any good company needs to have a budget in place. This includes costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
Hints for creating a business plan
Have a clear goal
If your goal is to secure funding for your business rather than working through a plan for yourself or your team, you will need to put in more effort and deliver a more comprehensive plan.
Keep it short and straight to the point
Your business plan should be brief and readable, no more than 15 to 20 pages in length, regardless of who you’re writing for. If you have additional documents that you believe will be useful to your audience and your goals, consider including them as appendices.
Know your audience
When you know who will be reading your plan — even if you’re just writing it for yourself to clarify your ideas — you can tailor the language and level of detail to them. This can also help you make sure you’re including the most relevant information and figure out when to omit sections that aren’t as impactful.
Spend time on research
I’m not requesting that you become a professor. Sections of your business plan will be primarily informed by your ideas and vision, but some of the most critical information will necessitate independent research. This is where you can spend time learning about who you’re selling to, whether your products are in demand, and who else is selling similar products or services, your strengths, and your weaknesses.
Your business plan should seem like a movie about the future
Show the story from multiple angles. Unfold possibilities of problems and how you are. solving them. Discuss things as a moving target, not as a guarantee that you know what the future holds.
Don’t write a boring black and white text and conclude you have written a killer business plan, expecting investors to throw a million dollars at your idea.
How you present the idea goes a long way. Remember “Design is intelligence made visible.
If you’re looking for a ready-made template to present your killer business plan, check out this pre-made Canva design template for an ecommerce business and other kinds of business start-ups.
Having an online store/ website increases your chance of getting funded by investors by 300%
Even if you never intend to pitch investors, a business plan can help you identify clear, deliberate next steps for your company — and it can help you identify gaps in your plan before they become problems.
You now have a comprehensive guide and the information you need to help you start working on the next phase of your own business, whether you’ve written a business plan for a new online business idea, a retail storefront, or growing your existing business.
What do you think is the most important part of creating a solid business plan? drop your commments below.