How to Create a Winning Business Plan
Looking to write a winning business plan to help your venture start or grow? This guide tells you everything you need to know.
What is a business plan?
A business plan is a document used to help guide your business through its next stage. For start-ups and new businesses, it serves as a blueprint for how to get to market. For existing businesses, it may be an annual process to address key objectives for the coming year.
A business plan can be informal and used internally to help your business grow. Alternatively, you can use it to apply for grants, seek finance or appeal to investors. In this scenario, your business plan needs to be a lot more formal.
The benefits of having a business plan
There are several reasons to have a business plan, but three reasons stand out above all else:
Understanding your market: The market research part of a business plan paints a clear picture of the profitability of your products and services, who needs them, how you should price and position yourself, and also identify opportunities.
Forcing you to look inward: When creating a business plan, all the facts and figures are there in stark reality. So, it’s an opportunity to be objective about your business and see past your hopes and dreams of success. By being objective, you get a clear picture of what you need to work on most, and what needs to change in order for you to be successful.
A business plan helps with finance: No matter where you look for money to fund your business, you’ll always need a business plan. If you apply for grants, look for business bank loans, or make a pitch to investors, you need a business plan. In that sense, it becomes a valuable sales tool
Components of a business plan
All business plans look a little different, with some being more involved than others. Here are some of the common items you’d find in a business plan.
Title page: While you may not need it for internal business plans, when you seek finance, your plan needs to be professional. This means including a title page including your logo, business name, ABN and the business owners’ details.
Executive summary: The executive summary is an overview of everything contained in the business plan. Here you would include details of what the business does, the market research results, and also a financial overview.
Business description: This section can include some company history, type of business, any domains, permits or licenses registered and also some location information. You’ll also want to include a brief vision or mission statement.
Products and Services: This looks at what your business intends to sell. You’ll include details about how you’re different to other similar products or services, how much it costs to deliver your products and services, and what sort of demand you anticipate based on market research.
Market analysis: This is the part of the business plan where you need to get really honest. You provide detail about the industry and where your business fits within it. It’s common to use a SWOT (strengths, weaknesses, opportunities, threats) analysis here to confirm the viability of your products and services.
Marketing plan: The marketing plan should be quite detailed, including how you intend to market the business, your pricing and positioning strategy, a marketing budget, timelines and key marketing strategies.
Management team: Here you can list all of the business owners and what they’ll be contributing, but you can also mention key team members such as managers and other experts. It will also give you an idea of the positions you still need to fill.
Operations: This section should be very detailed about how you expect the business to run day to day. Look at everything here, such as your suppliers, operating hours, communications, payment systems, software and technology, even quality control.
Diversity plan: Business owners can encourage gender equality and other diversity measures within their company. Here, you can list your standards and vision or all things related to diversity and inclusion.
Financial plan: The financial plan should be quite detailed. It’s hard work, but very beneficial as you flesh out how the business will become profitable. Take into account all known and expected incomings and outgoings, including a cash flow projection.
How to write a business plan
A lot goes into writing a business plan, and much of the work should be done before you even start. Here are some tips for writing a great business plan.
Determine the business plan’s purpose
Firstly, it’s important to understand why you’re using a business plan. Are you planning a new business and want to see if it’s viable? Are you an existing business looking to sell, or perhaps seeking finance through lenders or investors? Some business plans are very formal documents, especially when seeking finance or investors. However, many small businesses do a business plan solely for internal use, to help guide them through the early stages.
Set some goals
You may not have a section in the business plan dedicated to goals and objectives, however these goals are exactly what your business plan should support. If you need a certain amount of capital investment, be clear on that before you begin. If you want your business plan to guide you towards a certain amount of business growth, then write it down.
Goals and objectives are important in all aspects of business planning. The goals give you something to work towards, and the objectives are the steps you need to take to reach those goals.
Assess your weaknesses and consider threats
We mentioned a SWOT analysis earlier, and it’s an important process to go through, even before you start your business plan. Analysing strengths will show you the areas you already know you can succeed. Weaknesses tell you what needs to be improved. The opportunities are a list of potential ways you can improve, and the threats are any potential things that could derail your business. This might include competitors, regulatory requirements, increased costs of production and much more.
This process should always form part of your research into the viability of any proposed business.
Using a business plan template
Once you’ve considered your goals and completed your research, it’s time to put it all into a proper business plan. You can find templates to do this, but it’s important to use templates relevant to your industry. If you’re unfamiliar with business plans, perhaps look at a few templates, find one that suits you, and make minor adjustments if necessary.
Include facts and figures
Regardless of whether your business plan is a formal document or something for your own benefit, make sure facts and figures are included. This is especially important in the financial and market research sections. Remember, your business plan most likely makes claims about the potential success of your products and services, so you need to back these claims up.
In addition, people love seeing facts and figures, because it makes a business seem much more tangible than just an idea. For example, if you’ve found that you can capture a 50% market share instantly in a particular region, make that information clearly available.
Use visual representations
Especially in a formal business plan, visuals are invaluable. Graphs and other visual representations of your key points tend to stand out more than pages full of words. If you want to catch investors’ attention, you can get your message across much more clearly with images.
You can use images to emphasise positive market research statistics, or even show how your product works.
Write the summary last
You may not use a summary if your business is plan is very informal. However, for formal applications, you should include a concise summary of the key points. In a way, trying to get finance or encourage investors is all about how you sell yourself and the business plan. The summary is your chance to do that.
Finally, if you’re unsure about how to put your business plan together, always seek help. There are professionals out there who can help with the whole plan or just certain aspects of it. Make sure your business plan is a valuable tool that you can review regularly and update as your business grows and your goals change