8 easy steps to create your business plan
A well-structured business plan is key to convincing investors and partners that your project is viable. Here’s an overview of the important information you’ll need to include to promote your vision, strategy and goals.
Before you start drafting your business plan, you should take a step back and think more broadly about the strategy you want to adopt to ensure the success of your business. You can use the Business Model Canvas (BMC) to help you. It’s only a one-page template, but it might just be your best friend! It will help you see the big picture and reflect on the key elements involved in structuring your business:
- What do you want to offer your clients (Value Propositions)?
- Which clients do you want to target (Client Segments)?
- How will you reach your clients (Channels)?
- How will you interact with your clients (Customer Relationships)?
- How will you create value (Key Activities)?
- What resources do you need to operate (Key Resources)?
- Which partners will you team up with (Key Partners)?
- How will you generate revenue (Revenue Streams) and what operational costs will you incur (Cost Structure)?
Once you’ve answered all these questions and everything looks consistent, you’re ready to start drafting your business plan.
1- Summarize the project
This is the first component of a good business plan. However, you should leave it for the very end. This section is very important, because investors who are interested in your project will read it first. Start by introducing the founders and describing your company’s mission. Next, present the highlights for each of the following sections to describe your main activities. Use a tone that will encourage your audience to keep reading to the end.
2- Summarize the activities
What is your starting point? What have you accomplished since you started your business? What are the next steps? Then, follow up with details of your growth strategy. Often, a numbered list of goals and a timeline can help readers understand them at a glance. Two pages should do the trick!
3- Describe the marketing strategy you’ll be using
In-depth market research is the cornerstone of an effective marketing strategy. You need to address the size of the target market, industry trends and distribution issues. You should obviously make your project front and centre in this section. Describe it by highlighting its features. What is your action plan to promote your project effectively? Use statistics to demonstrate that your project meets your target clients’ needs and that your price positioning is appropriate. In this step, you also need to disclose how much you’re planning to allocate for this budget.
4- Draw up an operational plan
Your action plan shouldn’t be just in your head. It needs to laid out clearly so that potential investors can assess the next steps. Describe your company’s day-to-day (business hours, delivery agreements with suppliers, etc.). You should also describe your facilities. For example, the size of the space you're interested in, and any adjustments that will need to be made. You also need to justify your company’s geographic location.
5- Write a competitive analysis
Your company’s prospects might look good, but there’s still no telling how it will fare in the long term. A competitive analysis will help you accurately evaluate your competitors. It may be an essential tool down the road.
6- Make room for human resources
Potential investors will want to know that your team has the required skills and experience to make the project a success. To prove this to them, add your company’s org chart, a description of the key employees’ tasks and information about the employee training program. If you’re having recruitment issues, mention it and describe the solutions you’ll implement to resolve them.
7- Describe your e-business strategy
Information technology remains key for reducing your operational costs and driving up profitability. Include details about your upcoming website launch or the rollout of an e-commerce platform. Lastly, indicate the management information systems that you plan to use for managing your inventory, doing bookkeeping and ensuring quality client service.
8- Share your financial forecasts
A financial appendix helps you easily find investors and business partners. A well-organized financial plan must include your project costs and demonstrate that it is profitable. You should provide your company's financial forecasts for the next three to five years. Pay special attention to expected revenues and estimated costs for the first year of operation.
Your banker might also want to know details like how much financing you’re aiming for, the collateral you’ll provide to the lender and your preferred loan repayment terms. If this section is more difficult for you, feel free to ask for help from an accountant or other specialist.