How to Create a Winning Business Plan    

Looking to write an effective business plan to help your venture start or grow?

This guide will answer your key questions about how to create a business development plan, what is a business plan, who needs a business plan, why your business needs a business plan, and what needs to be included in a business plan.

What is a business plan?

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 companies, creating a business plan 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 like a traditional business plan.

Why do you need a solid business plan?

There are several reasons to have a good 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 your ideal customer is, how you should price and position yourself, and also helps you identify opportunities within the market. 

Challenges 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 becomes a valuable sales tool: 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.

Who needs a business plan?

Every business would benefit from a business plan, including small businesses in the initial start-up phase or established businesses looking to increase their customer base, define their business structure, or grow their business.

Components of a business plan

All business plans look a little different, with some being more involved than others. Here are some of the key questions and points you should address 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. 

Company description: This section can include some company history, type of business, any domains, permits or licences 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 your new product is different from other similar products or services, if you have a competitive advantage, 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 analysis (strengths, weaknesses, opportunities, threats) here to confirm the viability of your products and services for your target market and potential customers.

Marketing plan: The marketing strategy 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 for attracting customers.

Management team: Here you can list all of the business owners (or if it’s a sole proprietorship) and what each business owner will be contributing. You can also mention key team members such as managers, customer service representatives 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, customer service, 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. Financial forecasts are vital for your business plan, whether it’s a formal plan to attract potential investors or a simple business plan for internal use among the management team. 

How to create 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 how to create a business plan.

Determine the business objectives

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? What do you want to achieve with your business plan?

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 tangible 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 in which you already know your new product or business 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 the planning process and 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 free business plan 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 forecasts 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 the attention of potential investors, 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 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 your business plan. The summary is your chance to do that.

Get Help

Finally, if you’re unsure about how to put together a great business plan, 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.

Leadership and management courses online can help business owners learn the tools for how to create a business plan and run a successful business.

Common mistakes when creating a business plan

Unfortunately, not all business plans will be successful. As well as how to create a business plan, you have to know what not to do when writing a business plan.

Neglecting financial projections

It can feel scary to put your financial forecasts down on paper. But you need to ensure you include your financial statements including cash flow statement, balance sheet, income statements and break-even analysis. Potential investors want to see the numbers before they will consider investing in your business.

Grammatical errors

Having spelling or grammatical errors in your business plan looks unprofessional and makes your business plan look rushed. Take the extra time (and expense) to have a professional editing eye go over your plan.

Be sure of your new product

You might think you’re onto a real winner – but the reality is, not every business idea is going to be a success. Make sure you have the market research to back you up, ensure you understand your target audience, and be sure that your good idea for a business isn’t going to be too expensive with little reward.

An effective business plan is essential for all businesses. As well as knowing your target customer, ensuring there is a market for your product, and defining your business goals, a business plan can be an excellent tool to help you on your way to running a successful business. These tips for how to create a business plan are a great place to get started, but don’t be afraid to reach out for professional help if you need it.