If your goal is to run a successful business, a business plan is the document you need to go from wishful thinking to a thriving enterprise.
A business plan is one of the building blocks of all companies – whether you’re starting up, scaling up, or taking an established company to the next level you need one.
This helpful guide walks through all the key details about how to make a business plan to keep your enterprise moving in the right direction.
What is a business plan?
A considered and dynamic business plan is an essential document for all businesses. Start-ups tend to need a viable business plan to access funds or attract investors – and established companies use business plans as a way of thinking through, setting out and communicating goals and milestones.
A good business plan walks through the environment in which your enterprise will operate, the goals, milestones and long term plans of the company, the people which make it work, and practical details such as marketing and sales strategy, product innovation and financial forecasts.
There are many advantages to creating a business plan. By thinking through these broad business concepts in advance of founding your firm, you can assess and mitigate risks, and spot opportunities. A business plan is a solid marker of your credibility as an entrepreneur. And through your business plan you can communicate your vision to investors, partners, colleagues and suppliers.
Each company will have its own unique business plan – but there are usually similarities in the topics covered which means that business plan templates can be used to create the perfect plan for your company. More on that, later.
How to make a business plan
You can create a business plan yourself by working through the key information required by your potential investors. The easiest way may be to choose and adapt a business plan template. While templates – and the finished plans used by businesses of different types – will vary, every business plan tends to cover the following key points:
Although this is the first section in almost any business plan, you’ll want to write this last. Providing an executive summary is the best way to entice readers in, and encourage them to read your plans. Use this as an opportunity to summarize the headlines of your detailed plan, and talk through your company’s mission and vision. Inspire the reader to continue by showing how you – and your business – can stand out from the crowd.
Don’t forget that investors invest in people as much as they do companies and ideas. Showcase your team and how they’ll bring a strong range of talents to your business.
What your business will do
Set out the unmet need you’ve identified, which your business will help with. What problem are you going to solve for your customers?
Here you can also talk about who your target market is, and why they’ll love your proposition. If you’re selling products, you can work through your manufacturing or sourcing processes, and any relevant research or development of unique new products you’re working on. Don’t forget to explain your pricing strategy, and why you believe your customers will be willing to buy from you at that price point.
What market your business will operate in
Help the reader understand the niche you’ve chosen to enter – who the competitors are, likely trends in customer behaviour, any legal or environmental factors which may impact your sales, and how you can build a credible market share.
Show you understand some of the strengths and weaknesses of the competitors you’ll be up against, and explain how your proposition is different – and more attractive.
How you’ll connect with customers
Your next priority is to explain how you’ll find and connect with customers. What is your marketing strategy, and how do you plan to build a committed customer base, who will come back time and time again.
You can go into detail about the channels you intend to use to talk to customers, including social media, paid advertising or direct selling for example.
Your anticipated expenses and profit potential
The final point to cover will include your actual or predicted financial statements, budgets and forecasts. If you have live data you can include this – but if you’re creating a plan for a startup, you may need to rely on projections. In this case, make sure you explain the assumptions behind the forecasts, so the reader can see where the numbers have come from.
Types of business plans
The type of business plan which suits your company will depend on the circumstances, as well as your personal preference. There are two broad approaches to creating a business plan – the lean business plan, and the more traditional business plan. Let’s take a look at both:
Lean business plan
A lean business plan is a short document – possibly as little as a single page – covering only the most critical information. Lean business plans tend to follow a structure but may be written in the form of bullet points, so a reader can glance over the document and digest the content easily.
Lean business plans are useful as an internal reference for established businesses, or as a smart summary of broader ideas for a new business. However, if you’re looking for investors, the chances are you’ll need to also create the more traditional – and longer – business plan as well.
Traditional business plan
A traditional business plan is the most popular type of business plan, and is a more thorough document covering all the key information which could be required by investors and potential partners.
Traditional business plans will run to several pages, and can be most easily created by using a template.
Business plan template
You’ll be able to find a free business plan template to suit your needs online. There are a range of different options, including Word templates which you simply download and adjust to suit the needs of your business.
Try a simple Google search, or check out the business plan templates available from Wise.
How much does a business plan cost?
Small businesses and startups can usually write a business plan without external support. However, if you don’t want to create your own business plan, you can access services and consultants who can help, for a fee.
The costs involved can vary widely. You’ll be able to connect with someone on a service like Fiverr.com – likely to come with a reasonable price tag – or you can find a consultant who may charge thousands of dollars for the work. If you choose to go this route, do make sure you know what you’re paying for – and check out reviews and customer testimonials to make sure you’re working with an experienced and credible partner.
Before you decide to pay for support with writing a business plan, check out the free resources available online including templates, and support from organisations like the Small Business Association in the US. You may find you qualify for free business counselling or coaching which can give you everything you need without the hefty bill.
Each business plan is as unique as the business it’s written for. Take the ideas from this guide – and invest some time looking at templates and online resources – to make sure your plan gives your business the best chance of success.