November 22, 2019

How To Develop A Business Plan In 10 Steps

What should be in your business plan?

How you should develop your business plan can vary depending on who you ask. Some entrepreneurs may encourage you to seek the advice or help of a contractor to write your business plan as professionally as possible, while others will insist that you write it yourself as an intimate and personal document.

To assist you, we have put together a list of the top 10 steps to help you develop your business plan in a way that will suit your unique business idea.
How To Develop A Business Plan In 10 Steps, business plan images
How To Develop A Business Plan In 10 Steps

Understanding your business plan

Before you develop any business plan there will be some preparation you should do first. You will want to establish your purpose and the purpose of your business plan. Who is your audience? What problem will your business solve? What are the risks and rewards? These are just some of the questions you will need to ask yourself at the commencement of your business plan or idea.

Ensuring that you set yourself up with a good team will be paramount to the success of your business plan. As one Forbes contributor notes, 60 percent of new ventures fail because of problems found within the team framework.

Knowing when to write your business plan will also be imperative. Harvard Business Review (HBR) states that the most successful entrepreneurs wrote their business plans between 6-12 months after deciding to start a business.

It is also important to bear in mind that your business plan should be a living, breathing document, subject to change and flexibility as your business develops. As HBR has previously said, “the real key to succeeding in business is being flexible and responsive to opportunities.”

Executive Summary

The executive summary will be crucial for your business plan. In fact, some entrepreneurs remain steadfast that the success of your business plan could turn on the executive summary alone.

The executive summary is a brief, 1-3 page document which explains to any potential investor or interested party what your company does and how it will become profitable. The document will include your mission statement, a description of your product or service, introduce your team, and outline some of the key financial information.

Company Description

Further to step one above, you will need to describe in some detail your company, who the founders are, the age and stage of the business, your target audience and the main objectives of the business. Be clear about whether your business is one that serves other businesses (B2B) or one that serves consumers only (B2C). It would also benefit you to document any noteworthy accomplishments that your company has attained so far.

Market Analysis

Completing a realistic assessment of the market in the area you are targeting will be integral to developing your business plan. Important factors to include in your research are an analysis of the current competition; an analysis of the strengths, weaknesses, opportunities, and threats; target market research; results of any testing done so far; as well as understanding your marketing budget going forward.

This is a good opportunity to demonstrate how you will firstly attract customers and secondly, how you will retain them. Not only will this information be important to you as the project lead, but this will be some of the key data that any financier or investor will want to see from the outset. 

Product Or Service

It might go without saying, but your business plan should outline the product and/or service that your company will be providing to the market. This is where understanding the problem your business solves and the target audience you propose to serve is crucial. 

In this stage, you will want to also include the stage that your company is at, and past results, anticipated future products and services, any copyright or patents you hold, and the cost considerations. 

Organisational Structure

You must not undermine the importance of this step when developing your business plan. This step will help financiers understand why you are the company best suited to implement this project. To demonstrate your experience in the industry, including who the founders of your team are, the shareholders and directors, consultants and advisors, as well as any other key team members or leaders within the framework. Provide bios where appropriate and explain the value each team member adds in their own unique way.

Funding Requirements

This step is essentially what your business plan has been slowly building up to thus far. This is where you will make the request for financing to various investors, and you will want to ensure that your projections at this stage are accurate to enable you to get through the most crucial phase: the startup. Make sure you build in enough cushion to weather the various storms you can expect to encounter on your journey.

You will need to be as honest as you can at this stage, outlining where you are currently and where you want to be. In this step, you should include a balance sheet, the previous financials of the company, the projections for the next 12 months as well as the next 5 years, income and expenses and an analysis of what it will take to break even.

Revenue Projections

When developing and formulating a watertight business plan, this step naturally follows on from the previous step. You will want to shore up your request for funding with projections that demonstrate you can pay back loans at interest. In this section it may pay for you to include a repayment schedule as well as the milestones you expect to have accomplished within that time frame.

Addendum

Developing your business plan will involve bits and pieces of leftover information, references and documentation that have not been covered in steps 1 to 8 above, including articles of incorporation, resumes/CVs, licenses, trademarks, and sales contracts.

You may also have charts, graphs and product images that you are wanting to show potential investors and other interested parties. You can include these here. 

Ask For Help

Last but certainly not least, if you are unsure about any of the documentation you should include in your business plan or any of the finer detail to consider when developing your business plan in accordance with the steps above, then ask. 

Techno-PM is a leading project management advisor, offering templates, starter kits, advice, and much more project management-related products and services. If you want to learn more, visit our website now and contact us for more information. 



No comments:

Post a Comment