Are you an aspiring entrepreneur who wants to turn your idea into a business? Then you have to write a thorough business plan.
In its most basic form, a business plan is simply the act of putting one’s business idea into writing. Before you start your business, you should have at least one basic business plan ready so that you can achieve success as soon as possible.
A business plan contains a strategic overview of the company’s business concept, goals, and budget as well as a plan of how the business concept is to be implemented and developed. It is a tool that allows you to see the company’s strengths and weaknesses, both internally and externally, and, as a result, it makes it easier to put your idea into action.
Writing a business plan may sound like a big project but does not have to be so complicated. In this article, we offer a comprehensive guide for writing a thorough business plan.
Although it appears first in the business plan, the summary encapsulates the entire plan and gives the reader an overview of your entire business idea. It provides an introduction and an overview of your business at a high level, including information about which products or services you offer, your target audience, or your competition.
Since the summary is your company’s first impression, it must be outstanding, especially if you are looking for financing. For this reason, make sure to do your research and learn the best tips and tricks on how to write an executive summary for a business plan that will grab the reader’s attention and persuade them that it’s in the best interest to keep reading.
In this section, you should provide information about the company you are starting, including the type of problems your products/services solve and who would be your most likely buyers.
You can also expand this description by offering an overview of the industry that your company will be a part of, including trends, major players, and valued sales.
As you prepare to write the section on competition analysis, you will learn how successful your direct and indirect competitors are in the market. This part of your business plan includes an assessment of your competitors’ strengths and weaknesses, any benefits they may have, and the unique characteristics that make your business stand out from the competition. It also includes an analysis of how you will overcome any barriers when trying to enter your chosen market.
The primary goal here is to distinguish your company from the competition by describing your or your team’s expertise, as well as your competitive advantage. In addition, a strong competitive analysis will enable you to convince potential investors that your company can compete successfully in the market.
In the financial analysis, you break down your business idea into numbers. Here you show what assets you have, what you need to start and run your business, and what the expected profitability looks like.
Starting a business is usually about making a profit, so it’s important to show that you have a solid sense of your current finances, financing needs, as well as estimated income. In the financial section, you describe your financing needs and your detailed financial reports.
This part of the business plan is where you present the three main financial documents for your company: the balance sheet, the income statement, and the cash flow statement, or in the case of a new company, a cash flow forecast.
A SWOT analysis can be good to have as part of your business plan, especially if it is intended to be read by investors. The term SWOT stands for strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses show what opportunities and limitations you have internally in your company to be able to attract investors, the strengths must be clear and demonstrate real competitive advantages over existing companies and the weaknesses must be challenges for which there are conditions to overcome.
Opportunities and threats are external factors that are linked to your analysis of the world around you. Here you can show that your product solves a problem for your customers in a completely new way or tackle how to deal with a market where new competitors can appear out of nowhere.
A business plan is a great tool for testing whether your business idea meets the standard when you start your business. For many, it might feel completely unnecessary to write a business plan, but in the long run, this document is an important step that saves you time and money.