How to Write a Good Business Plan

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Like the popular adage which says “he who fails to plan, plans to fail”, this is also related to business. Without a plan, a business is essentially without guidance and the day-to-day activities are likely to be haphazard. A business plan gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you manage possible bumps in the road.

There are so many people out there with brilliant business ideas but no capital to finance the business ideas; putting your business ideas on paper, in form of a plan, helps to attract investors to finance your business idea. For example, if you want to apply  for a loan in a bank to finance your business, the first thing the bank will need to see is your business plan.

A business plan is not just required to secure funding at the start-up phase, but is a vital aid to help you manage your business more effectively. By committing your thoughts to paper, you can understand your business better and also chart specific courses of action that need to be taken to improve your business.

Writing a business plan is easy and doesn’t always require the services of an expert, as long as you know what your business is all about. A business plan is like a roadmap for business success. In this article, I’m going to make writing a business plan as easy and simple as possible.

Before going into writing that wonderful business plan, let’s take a look at the seven important components you must include in your business plan.

  1. Executive Summary
  2. Business/Company Description
  3. Market Analysis
  4. Organization Management
  5. Service or Product Line
  6. Marketing & Sales
  7. Financial Projection

Having known these components, let’s go into details on how to integrate them into your business plan.

  1. Executive Summary

This is considered the most important section of every business plan. This is so because it’s usually the first thing the reader or investor will see when reading your business plan and its content can either make or mar you. This component briefly discloses to your reader where your company is situated, where you want to take it and why your business idea will be successful. This section exposes your overall strength and if you’re seeking for financial support, the executive summary is the place to grab a potential investor’s interest.

For an established business, be sure to include the following information;

  • The mission statement
  • Company information
  • Growth highlight
  • Your product/service
  • Financial information
  • Summarize future plans

For a startup or new business, you won’t have much information as an established enterprise. All you need to do is focus on your experiences and the decision that lead to the establishment of that business venture.

  1. Business/Company Description

This is easy to handle provided you know the goals and objectives of your business and its unique proposition. When writing in this section, be wise to make the investor understand what the company is all about, and its goals.

What to include in your Company Description

  • Describe the nature of your business and list down your targeted audience or the marketplace that you aim to satisfy.
  • Give a detailed explanation on how your products and services meet these needs.
  • Which consumers, organisation or business does your business serve or will serve? Don’t forget to include them.
  • Make known an advantage you have which you think will be an edge in making the business a success.
  1. Market Analysis

The market analysis section is where you illustrate your enterprise and market knowledge. It should contain your industry description and outlook, information about your target market, distinguishing characteristics, size of the primary target, pricing and gross margin target, competitive analysis etc. This section should be well detailed as possible for the reader to really understand your vision about the business.

  1. Organisation & Management

This section is what exposes the overall structure of your enterprise. It includes your company’s organisational structure, details of company owners, profiles of your management team and the qualifications of your directors.

This section also delves deeper into making known all the chains of authority, functions and backgrounds of those in the board of directors or employees. You will have to convince your reader that your staffs are more than just names on a letterhead.

  1. Service or Product Line

This is usually the main purpose why businesses exist. What are your services and products like? This is the section where you explain the benefits of such products or services to potential customers.

What to include in your service or product line section

  • A description of your product/service
  • Details about your product life cycle
  • Intellectual property
  • Research and development (R&D) Activities

With all these settled, you can then move over to the marketing & sales section.

  1. Marketing & Sale

This section deals hugely on your marketing strategy. How do you drive sales? What strategy do you or will you use to compel customers into buying your products? This strategy should be part of an ongoing business evaluation process and unique to your company.

An overall marketing strategy should include four different strategies

  • A market penetration strategy
  • A growth strategy
  • Channels of distribution strategy
  • Communication strategy

After you’ve defined your marketing strategy, the next job will be your sales strategy.

Your overall sales strategy should include two primary elements:

  • A sales force strategy – What kind of people are you going to recruit in your sales unit? How would they be trained? How would their compensation be? These are the questions that will be contained in this element.
  • Your sales activities – It’s important you break down your sales strategy to activities. For example, you need to identify your prospects and make a detailed list of them. Analyse intensively all the various needs and the leads with the highest potential to buy first.
  1. Financial Projection

For an established enterprise, you’ll be requested to supply historical data, at least; for the past three to four years in other to evaluate the company’s performance.

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For a new enterprise, you ought to have analysed the market and set clear objectives. If perhaps, funds are needed, you will then need to include another component to your business plan, FUNDING REQUEST and in details, seek for financial help with a detailed outline on what they will be used for.

Most business plans usually contain an APPENDIX, which provides the reader with such information as credit history, resumes, product pictures etc.. It is totally up to you, whether to include it or not.

Your business plan should be more than one copy for future uses and updates. You don’t need to pass through the stress of writing another business plan in the future, all you need is to update it, unless it’s an entirely different business.

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