Starting a business is an exciting venture, but it can also be a daunting one. A lot of people don’t even know where to begin when it comes to creating a business plan. But don’t worry, it’s not as complicated as it sounds! Here are some tips on how to create a business plan that will help you get your business up and running. From doing your research to creating a financial plan, we’ve got you covered. Let’s have a look at Tips On How To Create A Business Plan. Let’s get started!
The truth is that many entrepreneurs don’t need a business plan. That said, would you build a mansion without some kind of construction plan? Of course not. Entrepreneurship is hard work enough without you putting yourself in danger of failing—or worse, failing silently, leaving others unaware of the problems brewing beneath the surface. A business plan can help you avoid this.
What is a business plan?
A business plan is a document that describes how you will run your business. It allows you to evaluate the chances of your success, manage your finances and gather support for your venture. A business plan can also help you prepare for the future and make sure that you are going in the right direction.
First step – Do your research
Think of preparing a business plan as a form of market research. You’re not creating the plan to get funding or attract investors. You’re creating it so you can figure out if your idea has any chance of working. So, wherever you can go and get information, do so. Talk to other businesses, visit suppliers, analyze industry publications and standards, and Google whatever concerns you.
You should also use your “ears and eyes” — pay attention to the general vibe around you as you prepare your plan.
Was the person you talked to at a trade show neutral or positive about your idea?
What about the people you interviewed?
What did you learn from Google?
All of this information will help you refine your idea and figure out what aspects of it to emphasize in your plan.
Here are some common tasks you should cover in your business plan:
1. Describe your expertise (or explain how you will acquire it)
2. Describe the opportunity or problem that your business aims to solve
3. Describe your target customer or client
4. Describe your competitors
5. Describe your plan’s uniqueness and how you will overcome competition and challenges
6. Outline your financing requirements (how much you’ll need and when)
7. Provide a detailed, month-by-month pro forma financial statement — do this for the first two years at least
The above is not an exhaustive list, but it should give you an idea of what to include in your plan (and how to put it together). Keep in mind that a lot of information can be presented in an executive summary (which usually comes at the beginning) and an appendix.
How to write a business plan
You need to write your business plan because all those interviews, research and analysis won’t mean anything if you don’t put them all down on paper. Your business plan is your strategy document. It’s where you describe how you’re going to launch your company, get customers and make money.
We’re going to give you a quick overview of the essential elements of a business plan, but we’d recommend getting professional help if you’re a start-up entrepreneur.
The format of your business plan doesn’t matter; it can be handwritten or typed, single or multi-page. What matters is that you clearly define your goals and spell out how you’re going to achieve them. A good plan can help you visualize what you’re doing and determine if you’re on the right track. A bad plan can waste huge amounts of time and money.
Before you start writing, make an outline. This will help to ensure that all important elements of your business are covered.
1. Executive summary
This is the first thing that potential investors or lenders will read, so it needs to be interesting and descriptive. It should capture the reader’s attention and make them want to read further. The executive summary is usually the first section of your business plan.
The purpose of the business plan is to convince investors to provide funding to your business. To achieve this, you must convince investors that your business idea has immense potential. You must therefore provide as much pertinent information about your business idea as possible.
The executive summary is the place to do this; it’s your chance to shine and impress those who will either make or break your dream
2. Business description
This is your business, describe what you do. Be as specific as possible and explain the industry in which you operate.
A well-known example of a business plan is one for a new restaurant. The entrepreneur will describe the type of restaurant, the location, the target clientele, and the menu.
Let’s say you wanted to open a gourmet pizza restaurant in London. You’d write your business plan saying exactly that: “New pizza restaurant in London” (the location).
In the next paragraph, you’d explain what type of restaurant it would be: “gourmet pizza restaurant”.
You’d then go on to explain who your target clientele would be: people in London who like eating pizza.
3. Sales forecast
Sales are one of the most important elements of any business plan. Entrepreneurs must show how many sales they think they will make and how they plan to make these sales.
The sales forecast is one of the most important parts of any business plan. In this section, the entrepreneur must show how much they think they will make. They must also explain how they plan to make these sales.
4. Financial projection
In this section, the entrepreneur will provide financial projections. They’ll do this by showing what they think their expenses and wages will be each month.
They’ll then add these figures together to give the total projected expenses for the business’s opening year.
You should also add your expected overhead expenses. These are ones that will remain the same, regardless of how much business you do.
For example, the rent on your premises is going to be the same whether you do a lot or a little business.
Another example is the cost of merchandise: It’s the same whether you sell one item or a million.
Using our previous example, let’s say you want to open a barbers shop. In the financial section of your business plan, you’d add together all of your expected monthly expenses. These would include:
The rent on your premises
Taxes on your premises (for example, property taxes)
Employee wages
Cost of merchandise (such as hair products and scissors)
The cost of supplies (things such as shampoo and paper towels)
The amount you’ll need to borrow
Also, add in any money you’ll need to borrow to get the business up and running. For example, if you’ll need to buy all new equipment for your barbershop, include this in your financial projections.
Tip: Make sure your financial projections show that you’ll make a profit!
5. Management skills and strengths
This is a short section that shows who will run the business and how they plan to run it. Make sure to list any skills or previous experience that will help you succeed.
6. Key strengths and weaknesses
This is where you’ll talk about your key strengths and weaknesses. For example, if the business is a restaurant, it might be a weakness that the location doesn’t have a drive-through window.
Tip: Be honest! Nobody will do business with you if you’re not honest and people will be able to sense when you aren’t being honest.
You should also list any challenges or threats. A challenge is a positive thing — it’s something that can lead to great growth. For example, if a new development is going up near your barbershop, it could be positive because it might mean lots of new customers. It could be a challenge because you’ll need to try to get some of those customers away from the new development.
A threat, on the other hand, is something that will definitely hurt your business. For example, if a large corporation is about to open a retail outlet nearby, that’s a threat because there’s definitely going to hurt your business.
7. Risks And Countermeasures
This is another short section where you should talk about any risks your business will take and how you’ll counter those risks. For example, if you’re opening a new restaurant, you’ll need to deal with the risk of losing food to pests and thieves. You’ll counter this by having a good security system in place and by making sure to store food properly.
8. Key Project Milestones
This is the part of the plan where you’ll detail how you’ll achieve your goals. For example, if your goal is to grow the business, you’ll need to list the steps you’ll take to grow the business.
You should also list any projects that are key to the success of the business. For example, if you want to expand into a second location, that would be a project.
9. Financial Projections
These are probably the most important parts of the business plan. In this section, you’ll have to write down financial information and projections.
You’ll have to do some research to figure out what the company’s revenue and expenses have been in the past. You can get this information from your bank statements or credit card statements.
Then, using that information, you’ll have to project how the business will do in the future. This will be new revenue and expenses. For example, if you’re going to open a new location, then you’ll need to figure out how much the rent will be and what the sales projections will be.
Tips on how to make a business plan:
You should also think about one or two “what if” scenarios. For example, what if revenue dips 15%? What if two key employees quit? You should think about as many “what if” questions as you can think of.
You’ll also have to think about the financial impact of any goals you have. For example, if your goal is to take the business internationally, how will that impact the business financially?
10. Human resources
How will you recruit and retain good employees? This is a topic that goes into greater detail in the business plan. You’ll explain how you’ll run your day-to-day operations in a way that attracts and keeps good workers.
You’ll also have to think about how the business will grow its workforce. For example, if you plan to open a second location, will you grow the workforce at both locations or will you recruit new people for the second location?
Tips on how to write a good business plan:
This is also a great time to create a job description and a list of job duties. You should also think about how you’ll screen potential employees. And you should think about what kind of training your new employees will need.
In Closing
Creating a business plan can be overwhelming but the best thing is to just start. The next best thing is to invest in yourself, the business will only be as successful as you! If you have any questions feel free to set up a Free Coaching session.