Comprehensive Business Plan Writing In Eight Steps
Updated: Dec 12, 2019
“Someone’s sitting in the shade today because someone planted a tree a long time ago.” — Warren Buffett, investor
If you’re launching a new business or greatly expanding an existing one, it’s essential that you put together a thorough business plan.
Bank loan officers and investors will require one before they’ll consider funding your business growth endeavours. But even if you aren’t seeking outside investment, developing a rigorous plan is a crucial process. It will help ensure that you understand what your new business is going to require financially, and the operational efforts needed from your leadership and team members.
Here are eight steps you can follow to develop an excellent business plan.
Describe Your Company
You can think of this first section as a snapshot of your business, both as it is and as you envision it to be. It doesn’t need to be overly long as you’ll be going into more depth later. Provide your readers with a quality summary and a top-level understanding.
Start with what your company does. Provide surface level descriptions of your products and services, and who your target market is. Consider including your mission statement and value proposition. Demonstrate to your readers why you think your business is essential.
You also want to discuss your company in the context of the industry it serves. Talk about what distinguishes you from your competition and where you fit into the greater narrative of the marketplace.
Perform Market Research Analysis
In this section, you’re going to drill down into some of the details you briefly mentioned in the last part. You want this section to be rigorous, well-researched, and data-driven. It’s not enough to talk about where you fit into the competitive landscape. You need to support your statements with accurate, timely information.
As you flesh this section out, you want to touch on your industry, including information on its current state, its rates of growth, and where you see it in the future. You want to discuss the specific slice of the industry that you focus on, developing a view of your target market.
It would help if you also mentioned your competition, your pricing relative to the market, and any barriers to growth that exist and your plans to surmount them.
Define Your Organisation and Management Structure
Here you’ll delve into the composition of your business. You’ll want to mention the legal structure of your organisation, how company ownership is shared (if relevant), and your general management philosophy.
It’s good to include detailed organisational charts so that readers can see how your departments are broken out and how company management is structured. You’ll also want to focus on the backgrounds and experience of your executive management team so that your readers are satisfied that your staff is capable of delivering the results you’re promising.
Describe Your Service or Product
Now you’ll dig into the details of your company’s offerings. You’ll want to include a detailed description of the products or services you offer, how they satisfy market demand, what differentiates them from the competition, and how you see them developing in the future.
When focusing on the future value of your products and services, discuss your research and development efforts, where you’re going to focus investments, and critical technologies, knowledge areas, or human resources that will be needed to effectively realise your vision.
Detail Your Marketing and Sales Strategy
In this section discuss branding strategies, marketing plans, and the specific messaging you’re targeting to your audience. You need to show how you’re positioning your offerings relative to your competition, and describe how you’ll distinguish yourself in the marketplace.
On the sales side, you’ll want to introduce your sales team, its management, and discuss specific initiatives and strategies they’ll be using to sell to the end customer. It’s a good idea to describe your entire sales funnel and detail how prospects will translate to leads and then nurtured at each touchpoint.
Outline Your Funding Request
It’s crucial that any potential investors reading your business plan understand what your financial needs are, and exactly how you’ll use invested funds to pursue your growth strategies.
Make sure you specify the exact amounts you’re requesting for your current business needs as well as any funding amounts you’ll need in the future. Break out how these funds are earmarked, per department, and specific business objectives.
Bank loan officers and other investors will want to know how the funds they make available to you will impact your business plan, and they certainly want to see that you have realistic steps in place to help ensure that repayments plans are achievable and that they realise a profit on their investment.
Identify any “soft loans” (family, friends) or contingencies (savings) that you will utilise to support your expenditure requirements.
Make Financial Projections
Now that potential investors understand the financing you’re looking for, you need to place it into the context of your current finances, and then project how your financial position will evolve in the coming years.
A critical section of your plan requiring rigour and explicit assumptions, you’ll want to include a full suite of projected financial statements, including your balance sheet, income and cash flow statements, and relevant accounts receivable and accounts payable information. You’ll also need to make forecasts regarding future income and cash flow levels, as well as the general financial picture for your developing business organisation, as you scale up your operations and service offerings.
Establish Key Milestones
This final step establishes realistic, achievable milestones that will be used to gauge your progress in achieving the overall business objectives detailed in your business plan.
It’s vital that these milestones are measurable, and that you define the metrics you’ll be evaluating them against to be able to articulate your success criteria.
You want to avoid vaguely, improperly defined, or overly ambitious milestones because investors will use these as an indicator of how their investment is progressing. If they can’t understand them, or if they’re too risky and by default, have the potential to miss critical projections, investors may get nervous or may choose not to get involved with you in the first place.
Noirwolf Can Help
Noirwolf Consulting is a global business consulting firm in Leeds, West Yorkshire. We work with clients in the UK and international markets to develop their comprehensive strategic plans and provide consulting support to help scale up business operations. We help entrepreneurs, small to mid-size and multinational global businesses create business plans, optimise operations performance and productivity to grow their businesses.
To learn more about Noirwolf Consulting team can help you grow your business, contact us today.