A business plan is how you put your best foot forward to potential investors, but it can be difficult to understand how to write a business plan that succeeds. We get it, we’ve been there, and sometimes putting your dream down on paper leads right writer’s block.
What Needs to Be in a Business Plan Document?
There are a lot of great resources to use when determining how to write a business plan. Read as many of them as possible. Your business is worth it.
- Executive summary: This is a short-and-sweet explanation of your company, why you’ll be successful thanks to products or services as well as leadership. Think of it as your Shark Tank pitch.
- Company description and value proposition: Give the highlights of your company, your MVP vs MLP and what makes you valuable. Explain the problems that you solve, general customer info, and
- Market analysis: Discuss your market in both long-term potential as well as your near-term customers.
- Products and/or services: Describe your specific product or service line and what it looks like for you to create and offer those. Discuss any benefits you have, such as IP, patents, copyrights, or other protections.
- Company management: How is your company structured and who will run it? Explain the legal entity of your business and the management structure.
- Partners and providers: Discuss the partnerships your business has already, note if you already have partners like manufacturers, and any resources you have related to these groups.
- Marketing and sales strategies: Describe your broad approach to marketing and sales, including customer retention. Tie it to your market analysis to discuss how you’ll reach that market, because that success will define your financial project.
- The Ask: Here’s where you make your funding request if the reader is a potential investor or lender. Outline funding requirements and needs.
- Financial projections and roadmap: Boost your ask by showing the financial projects and your product roadmap. Explain where you plan to grow over the next five years as well as where you are right now. The more detail you can provide for your first year, the better.
- Supporting documents: A business plan almost always needs an appendix, which is tailored specifically to your audience. In some cases, you’ll want credit histories and letters of reference. Usually, you’ll want product information including photos, licenses, permits, and legal documents.
Business Plan Guide: 8 Steps
When you’re thinking about how to write a business plan step-by-step, keep the goal and final document in mind. Thankfully, it’s something that you’ll be able to start pulling together when you use this and other business plan guides.
Step 1: Do Your Homework on Your Market
Define your products and services, then research everything about them. You’ll want to look at your products and if they solve the pain points you’ve addressed. Look at competitors and their market opportunity. Learn as much about your customers, competition, and market as possible. Define them as clearly as you can and rank most immediate opportunities and threats.
Step 2: Do You Homework on Your Business
After you look at the market where you can play, it’s time to do some self-reflection. How well is your business poised to enter in that market? How much of an impact can you make? What can derail the whole thing?
Step 3: Define Your Plan’s Purpose
Now that you know thy market and self, it’s time to define your document. Business plans can serve a variety of purposes depending on the audience. Do you want to use it to raise venture capital? Are you seeking a traditional business loan? Is this a part of a pitch to a local business Meetup where you want help fleshing out an idea?
Step 4: Tell Your Story
Your company’s mission and purpose are going to play a crucial role in how people perceive you. So, don’t skimp with a basic company profile that is a laundry list-style timeline of your founding. Tell a story about who you are, who the company is, and why you want to serve your specific audience.
Step 5: Turn Homework into Documents
Some steps are more time-consuming than others and this one can be a lengthy process depending on how complex your business is already.
Step 6: Build a Timeline
Put everything you have collected and understood about today and your targets together. It shows where you’re at and what you need to become to achieve your goals. Think of it as the first steps in the financial planning and projections that your business plan document will eventually need.
Step 7: Refine Your Targets
The first six steps are all about gathering your data. Now, you’re ready to move into the construction phase of this step-by-step guide for writing a business plan. Your mission is to take the homework and build your story with a specific audience in mind.
Step 8: Deliver Big with Visuals
We’ll wrap up with the decisive step of this business plan guide: reviewing everything with an eye for visuals. Listen to the wisdom of authors throughout the ages and show, don’t tell. Visual communication is essential in your business plan because readers demand speed and clarity.