Benjamin Franklin once said. “If you fail to plan, you’re planning to fail”. Regardless of whether you’re a start-up or scale-up business owner, learning how to write a good business plan is one of the most important steps you can take in creating success. With an effective plan, you’ll have a roadmap that will help guide your actions as your venture grows and evolves — plus, it’s one of the criteria investors use when evaluating potential investments.
Let’s take a look at some of the reasons why you need a business plan.
- The process of creating a business plan will force you to take a realistic and detached perspective on your business. It will identify and ascertain whether your business is profitable or if you should sell it.
- A business plan will give you a mental and visual framework for your business success. It will assist in the optimisation of your resources and time.
- A business plan gives you a trajectory pathway to your business success.
- If you want investors and financiers to invest in your business, you need a business plan as they would like to see your plan before parking their hard-earned money with you.
- A business plan helps you succeed in your business and life.
Writing your business plan doesn’t need to be intimidating; with proper preparation, research and focus, it can be easy and even fun!
Let’s go over four major steps to help make sure all aspects of writing a successful business plan are covered.
Step 1: Collate information and assess your landscape.
Gather as much information as possible about your business, services, products, market, industry, economic climate, and anything relevant for business growth.
And ask yourself.
- What is your business all about?
- What do you actually sell? – in one sentence. Is it still relevant in today’s marketplace? Or will it subside in the next few years?
- Do you have a big enough market?
- Can you command a healthy margin with what you are selling?
- Who are your top 3 competitors? And does the competitors have the ideal customers you would like to serve?
- What are your goals and objectives for achieving success?
- How will your business reach these goals and objectives and be successful?
- Your avatar – Who is your customer? What is their demographic, psycho, behavioural and geographic? (This is very important when you want to market your business on Google, Facebook, or LinkedIn).
- What is the potential sales volume?
- How many staff does your business requires to run profitably?
If it helps, you may consider checking out businesses similar to yours that are currently for sale, contact the business broker, and inquire about the company. The data would enrich your spectrum of understanding about your market and help you better understand your business, product/ services, and industry.
Step 2: Analyse the information collected
Now that you have collated all the data, now let’s analyse it in terms of:
- Sales potential.
- Gross profit potential
- Net profit
- Cash flow.
- Market analysis
- Human resources requirements.
- Development/ Service Delivery/ Logistic costs.
Again, this is where other and comparable businesses’ financial data may come in very handy. Refer to step 1.
Take all the information collected and analyse how it will affect the success of your business.
When reviewing your markets, your avatar (customers), make sure you analyse your market segments: their demographic, Psychographic, Behavioural, and Geographic.
And if you want something more comprehensive, we have tools such as a Trend map, customer needs Map, Competitive landscape, Core competency analysis, technology priorities chart, Critical success factors, and much more to help you to cost solidified the information that you’ve collected. Check out the business growth workshop or The Mastermind group for more information.
And if you want to laser drill on your Customer Interest, I would subscribe to an SEO tool that allows you to view your competitors’ prospective clients’ profiles: gender, age group, interests groups, and other information. See the diagram below.
Step 3: Develop strategic Goals
This is the fun part. You can do it yourself or with a Team, or engage a business expert to help you develop a strategy based on your goals and competitive landscape.
There are over 7 strategic categories, but here are the top 4:
- Service-delivery strategy: how will your business function: what is the % of face-to-face contact/ delivery? What is the % of online or onsite sales? Can the product be digitised? Can chat support suffice as the primary customer support component? Or should customer support park under the Knowledge Base?
- Marketing strategy: how will your product or services being marketed, including developing a lead generation system, driving traffic to your website, Paid Ads and promotion, selling and closing, and email marketing, which forms your marketing plan.
- Sales & Finance strategy. How will your finances be arranged, including sales forecasts, budgets, cash flow forecasts, and profit and loss statements, which form your financial plan?
- Operation strategy. How will your business be operated? Can it be done remotely, or has to be office base? Can you digitise your business framework, workflows, service delivery pathway, customer journey, and product distribution channels? Do you have experts to implement software (SaaS) you need to support your business?
Step 4: Prepare the plan.
Pull all the information together into one consolidated business plan.
Remember, there are two trains of thought: write it as if you are the only one who looks at it, or develop it to showcase to the banks, investors, or financiers.
If your business plan is your highly classified master plan, it can be as freestyle as you want.
But if you seek financial support from 3rd parties financiers, then follow the recommendations below: –
The plan itself should be:
- Straightforward – use simple language and short sentences, use tables and diagrams where possible, and do not use too many adjectives.
- Brief – only use essential and valuable information (e.g., if asking for finance, tailor the plan to the request – do not produce a comprehensive plan to ask for a small loan.
- Truthful – the business plan should not exaggerate – an outside person will probably see through the exaggeration and react unfavourably. The business person must have a realistic idea of the state of their business.
- Logical – the tone in the business plan will indicate to outsiders how the business will be run and reflect the businessperson’s realistic idea of the state of their business. Therefore, get it proofread before showcasing it to your financiers
To sum it all up, writing or developing a business plan can be broken down into four simple steps. Start by collating the information needed, then proceed to analyse what has been gathered and develop a strategy based on your findings. Finally, you’ll need to prepare the plan into a professional format. These are easy steps which don’t take a lot of time and can be rewarding in more ways than one. It’s incredible how far you can go with just having the right direction.
If you want to further explore this topic, and get more deeper strategies on business expansion, feel free to join our upcoming workshop, where we’ll break down each step even further with some tactical advice that can really help to guide your company’s success story. Don’t wait any longer; see us at the event and start setting yourself up for success!
If you need help with your business planning process on a one-on-one level, book a free strategy call, visit Quantum Growth Program
If you find this article helpful, please share it by clicking on the floating icons on the left: Facebook, Twitter, LinkedIn, eMail.