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TEMPO.CO, Jakarta - Before starting a business, it is essential to have well-defined visions and goals. This is where a business plan comes in to enable you to map out your company’s financial goals and the strategies to achieve them.
While many business players often find value in the go, creating a business plan can guide your business from the start and keep it on track as it grows. Citing Forbes, NerdWallet, and Shopify, let's learn how to write a business plan in the following article.
What is a Business Plan?
A business plan refers to a formal document that outlines a company's goals, strategies, target market, and financial projections. It comes in as a detailed guide for how the business will operate and achieve success over a specific period.
Business plans serve two functions. Internally, these documents help clarify the vision and organize your business operation. Externally, business plans are often used to attract investors or potential leaders.
Moreover, business plans are subject to change. This may occur as businesses identify their target customer base and determine the optimal product and service that align with their needs.
How to Write a Business Plan
A business plan comprises nine key components, including an executive summary, company description, market analysis, organization and management, products or services, customer segmentation, marketing and sales plan, logistics and operations, and financial plan.
For more, below is a step-by-step guide on how to create a comprehensive business plan:
1. Draft an Executive Summary
The executive summary is a brief overview of your entire business plan. It should highlight the most important points, including
- Business concept,
- Business goals and vision,
- Product description and differentiation,
- Target market
- Marketing strategy,
- Current financial state,
- Projected financial state,
- The amount of money you ask for, and
- The team involved in your business.
Although it appears first, the executive summary is often written last, as it summarizes the content of the full plan.
2. Create a Business Description
This section explains what your business does, the products or services you offer, and why it’s unique from other companies. The description should also include other crucial information, such as your business’s registered name, address, and names of key people in the business.
Your business’s legal structure (e.g., sole proprietorship) and a brief history can also be incorporated in the business description, if applicable.
3. Perform Market Research
Market research provides an analysis of your industry, target market, and competitors. You can utilize the SWOT analysis when writing the information in your business plan.
4. Outline the Organization and Management
This section outlines your business structure and details the roles and responsibilities of your management team. You can add an organizational chart to better display your business’s internal structure.
5. Describe Your Products or Services
Describe the products or services your business offers in detail, highlighting what makes them different from competitors. In your business plan, explain the following about your products and services:
- An explanation of how your products or services work
- Details of the pricing model for your product or service
- A description of the typical customers you serve
- An explanation of your supply chain and order fulfillment strategy
6. Run a Customer Segmentation
Another thing you should include in your business plan is the customer segmentation. In this section, you provide a detailed breakdown of how you divide your target market into several groups and specific characteristics, such as demographics, behavior, or geography.
7. Define Your Marketing and Sales Strategy
In this section, outline how you plan to attract and retain customers. Describe your marketing channels, like social media, email marketing, traditional advertising, and the sales process. Be specific about how you’ll generate leads and convert them into paying customers.
To help you figure out what information should be put in your business plan, try to answer the following questions:
- How much do your services or products cost?
- What are you selling, and how do you differentiate it in the market?
- How will you get your services or products in front of your customers?
- In which markets or through what channels will you sell your services or products?
8. Provide a Logistics and Operations Plan
A logistics and operations plan tells about your business’s daily activities and the workflows of how it manages resources. In this section, you should cover information about the following:
- Explain where you produce your products and where you get the raw materials from.
- Describe the whole process of production. Signify whether you will manufacture or dropship the products.
- A description of the facilities and equipment your team members use to produce your goods.
- A breakdown of the shipping, fulfillment, and inventory of your business.
9. Make a Financial Plan
Financial plans are crucial for showing investors or lenders that your business is financially viable. This section includes detailed information on sales, revenue, profit, expenses, and other financial metrics relevant to your business.
In case you have other additional information, consider creating an appendix. It is an optional section to include supporting documents or materials that add value to your business plan.
Lastly, to give you a depiction of how a business plan looks, the University of Vermont provided a perfect sample of a business plan for small food businesses. Click the link for more details.
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